Miah wants to buy a new games console from a retail store. She will need credit to buy this consumer durable.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [1] Goods that last a long time / have a long lifespan.
2. [1] May increase sales / cashflow
3. [1] especially if competitors are not offering credit / gain competitive edge
4. [1] Attracts people into the store / likely to tell their friends
5. [1] To encourage impulse buying / shoppers without cash
6. [1] Will clear stocks more quickly / reducing risk of loss from out-of-date goods / before it loses its value / allow example
7. [1] Easier to sell larger items / consumer durables / which have higher mark-ups
8. [1] Needs to compete / to gain greater market share
9. [1] Customers can afford them to pay with credit / may not be able to afford the goods / so able to spread repayments / pay later
10. [1] Increased customer loyalty / well-known customers / repeat sales / keep purchasing from the same retailer
11. [1] Earn interest / increases income / profit
12. [1] Has excess goods / needs to restock.
13. [1] Development of games consoles would be an example of a PEST technological factor. (TRUE)
14. [1] Excessive packaging of goods by retailers benefits the environment. (FALSE)
15. [1] Ethically produced goods are produced in dangerous environments. (FALSE)
16. [Credit card point 1] Provides instant credit, up to a limit
17. [Credit card point 2] Free credit allowed for up to a month so can use games console without paying immediately
18. [Credit card point 3] Can be used in a wide range of outlets / shops
19. [Credit card point 4] Can help with cash flow
20. [Credit card point 5] Receive monthly statements to see what is owed
21. [Credit card point 6] Temptation to overspend encouraging debt
22. [Credit card point 7] Interest is charged if amount owed on statement is not paid off which can make it expensive
23. [Credit card point 8] Risk of becoming a bad debtor / being taken to court if credit card bill not paid off.
24. [Store card point 1] Often receive a discount on goods
25. [Store card point 2] May earn reward points which can be used to obtain free gifts / special offers / free delivery
26. [Store card point 3] Provides interest-free credit if paid off each month so helping cash flow
27. [Store card point 4] High interest rates can make it more difficult to pay off, if not paid on time
28. [Store card point 5] Temptation to overspend encouraging debt
29. [Store card point 6] Can only use the store card in one store.
30. [Evaluation point 1] A store card will offer a discount / reward so is more attractive but an inexperienced borrower may not repay the debt in time so it will cost a lot more when interest is added – to either type of card.
31. [Evaluation point 2] The most important thing is that Miah is able to repay to avoid interest.
32. [Level 3, 7-8 marks] The candidate is able to offer a recommendation with a thorough evaluation of buying a games console with either a credit card and a store card
33. [Level 2, 5-6 marks] Candidate offers a satisfactory analysis of the use of buying a games console with a credit or store card
34. [Level 1, 1-4 marks] Candidate demonstrates some knowledge and understanding of credit and store cards with application to games console