Final answer:
Customer loyalty is the tendency of customers to return to a product or organization regularly due to satisfaction received, it is important for businesses because it affects their reputation. In the goods market, a money-back guarantee can encourage people to buy even if they are uncertain about the product.
Step-by-step explanation:
Customer loyalty is the term used to describe the tendency of customers to return to a product or organization regularly because of the service and satisfaction they receive. This is an important concept for businesses because repeat customers are more likely to recommend the business to others, which helps establish a good reputation. For example, a well-established grocery store with a good reputation can charge a higher price than a temporary stand at a local farmer's market.
In the goods market, a seller might offer a money-back guarantee as a promise of quality. This can be especially important for companies that sell goods through mail-order catalogs or online, where customers cannot see the actual products. The money-back guarantee encourages people to buy even if they are uncertain if they want to keep the item.