What's up with those "Act Now!" gadget commercials on TV?
I’ve been around for not quite 26 years, so my experience may be limited, but for as long as I can remember, daytime commercials have been trying to sell me junk I don’t want/need for only $19.95. But wait! There’s more! Act now, and we’ll throw in a second set of automatic squash racket slicers and disposable freezer basters absolutely free – a $50 value, all yours for only $19.95. So my question: How exactly is it that they can afford to sell all these expensive things for so cheap, or can they even? Is someone lying here, and it’s not really a $50 value? Why does the stuff always cost $19.95? Why can’t I find these things on store shelves? Can you please help me unravel the mystery of these commercials?
Ryan, you’re in luck, as this is a subject that's much on my mind. I’m in between jobs right now, so I’ve got lots of time during the day to watch TV. I’m not sure which is worse – the commercials or the programs in between. I will say that Billy Mays’s voice haunts my dreams, and if I hear one more bad joke from the ShamWow guy, I’ll shoot my TV screen. Now I know what set Elvis off.
The commercials of which you speak are the brainchild of one Ron Popeil, the guy who gave us the Pocket Fisherman and the Veg-O-Matic. Back in 1964 when he started, Popeil couldn’t afford to buy 15 minutes of airtime, which was then the standard for a full-length infomercial. Instead, he produced 30- and 60-second commercials in which he manically demonstrated the value of his products; by taking advantage of cheap ad rates, was able to plaster the broadcast landscape with his message. Telebrands, one of the country’s largest direct-marketing firms – among other things, they sell the PedEgg foot file and AmberVision sunglasses – follows the same basic model, although they do run full-length infomercials as well.
In fact, thanks to plummeting advertising rates, Telebrands is now able to air commercials in prime time, thus bringing its products to an even wider audience. In a January article in the Newark Star-Ledger, Telebrands president A.K. Khubani says tough economic times create an ideal environment for his company's MO: not only are ad rates down, more people are staying home and watching TV. Superstar TV pitchman Billy Mays suggests that many direct-marketed products sell well in a bad economy because they help (or at least promise to help) buyers save money somewhere else. The problem of wasted food is solved with this miracle bag-sealer system! Don’t throw away those torn pants – save them with this mending kit! Even the clothes-storage products, which have been around a while, seem particularly appropriate in a time when some people are downsizing to less roomy, more affordable housing.
If you think about it a bit, the phrase "a $50 value" isn't really too meaningful. The seller can always claim that the retail value of its electric staple remover might be $50 – who's going to prove that it mightn't? One can safely assume that if it's selling for only $19.95, its cost to the seller is at least somewhat less than that. Why $19.95? Come on, Ryan – this is elementary psychology. By positioning the item's price just below $20, the seller is allowing viewers to just go ahead and buy the damn thing while telling themselves they haven't spent any real money. The Star-Ledger article quotes Princeton professor Daniel Nosenchuck to this effect: "People like that instantaneous feeling. The $19.95 price point product is totally an impulse buy. Here's the product, now pull out your credit card, get up off the sofa and dial the number. It's immediate closure." Even the larger products, like exercise equipment, will sell if the cost is split into smaller “easy” payments.
And if selling stuff for $19.95 doesn't always lend itself to big profit margins, some mail-order houses make extra money in two ways. One: they'll tell you they're throwing in that second set of whatever it is absolutely free, but then they'll charge you extra shipping and handling fees on the free second set, meaning you pay for it anyway. A variation on this trick is the offer of a “free” lifetime supply of some consumable product; again, you’ll be hit with shipping and handling costs, so you’re still paying for it. Two: they’ll compile mailing lists of their customers' addresses and sell or rent them to other companies. A fun and easy way to see who's doing this is to order something and have it sent to a fictitious person at your address, then see how much junk mail you get with that name on it. (The Direct Mail Association does offer an opt-out service that will supposedly reduce the amount of junk mail sent to you by its members; information is available at dmachoice.org.)
As you can imagine, the quality of these products varies. Some are pretty good and work as advertised. (My mother has two of those sleeved blankets, and she loves them; she also uses skin-care products she first ordered from an infomercial years ago.) Some are fairly chintzy but still serviceable. And some are just junk: they don’t work, or they break easily. Quality control, such as it is, is the responsibility of the direct-marketing company or the pitchman who sells the items. In the Star-Ledger article, Mays said he’ll pass up a lot of products before he gets to one he’ll endorse, as his own credibility is on the line.
And often you can find these items on store shelves. Telebrands’ Web site says they ship to Wal-Mart, Target, Walgreens, Bed Bath and Beyond, and other retailers. There are also “as seen on TV” stores, both in the brick-and-mortar world and online. Happy shopping.