Home Shopping Services

  
     
“Home shopping,” also known as “televending,” “electronic merchandising” or “video shopping,” is the latest in direct marketing. There are many television shows on the air that present products that consumers can order over the telephone. Some of the shows even air twenty-four hours, making for what the companies might call “ultimate convenience.”

Most of the shows have similar formats. A show host presents a particular item, gives the claimed regular or “retail” price followed by the lower price at which the show offers the product. Consumers place their orders via a toll-free phone number, giving either their credit card number or the promise of a check. Companies generally hold products for one week contingent upon the arrival of a check. Orders are automatically canceled if the company does not receive the check. 

There is, however, more than a cold sales pitch coming through the TV screen. Aside from the purchasing that goes on, viewers can play trivia games, chat with the hosts on the air, participate in ticket drawings, “shopping sprees” and watch celebrities enumerate the qualities of a product. Hosts draw audiences into the programs, making them active, rather than passive viewers.


Products
The products offered on these programs vary tremendously. Some sell food, and others sell anything from computers to rowing machines to tanning machines to clothing.

Name brand goods are often featured. Some items are discontinued models, meaning a manufacturer has ceased production of the item to produce a newer version. Programs may have an “exclusive line” of merchandise.

One company will even start selling financial services such as mutual fund accounts and insurance. There is no limit to what the companies sell. Some prefer to sell more name brand merchandise than close-outs, believing that consumers prefer recognizable over unknown brand names.

Companies have also considered the idea of targeting specific audiences during a particular time slot; an hour of electronic equipment followed by an hour of camping gear, for instance. Companies have even reached agreements with large, established retailers to sell their products via the television screen. But, whatever is sold, it is up to the consumer to decide if the ease of home shopping makes it worth buying something he/she cannot carefully scrutinize prior to purchase.

Each company is trying to develop a characteristic that will separate it from the competitors and ensure the customer satisfaction and confidence. The shows also want to be entertaining in order to get the customer to keep turning them on. The promotion of name brand products may lead to more selective, targeted purchasing and move the industry away from simple impulse buying.


Order Fulfillment
Telephone operators type orders into a large computer system, which sends the orders directly to a warehouse, also called the fulfillment center. The large home shopping companies maintain their own staff of telephone operators and own their own fulfillment centers. According to some home shopping services, the fulfillment of orders is the most important aspect of their business.

The services sell thousands of items a day. At that kind of volume, managing the processing of data and shipment of orders must be a priority. It needs to be efficiently run so that customers can get their merchandise as soon as possible. People have called and ordered a product in a matter of a few seconds. They do not then want to have to wait more than a few days to receive the parcel.


Customer Experience
Better Business Bureaus have received complaints against shopping services generally alleging low quality merchandise, inability to locate manufacturers for repairs and slow refunds.

Many shopping services have exchange or refund policies. Most allow consumers to return any merchandise within 30 days for a refund or an exchange. One company has even initiated a policy of enclosing a return shipping label and form with every purchase mailed out to consumers. It is important to verify a company’s return or exchange policy before you buy.


Pricing Policy
Home shopping programs generally use comparative pricing as a way to show how much money consumers save by using the service. They usually broadcast a “retail” or regular price followed by their actual selling price. The BBB has found that the amount of savings claimed may not always be a true reflection of the marketplace.

The BBB concluded that while bargains may sometimes be available on these shows, claimed savings are frequently exaggerated. Also troublesome is the practice of using comparative prices on “exclusive” merchandise offered only through the shopping service with no true marketplace counterpart.


Tips for Consumers

  • Since home shopping companies, like mail order companies, are national, they may sell products to consumers who live in an area where the product’s manufacturer does not distribute that particular item. In this case, consumers may encounter difficulty getting parts and service on a local level.
  • The price quoted for a product does not include the shipping and handling charge, which will be added onto the bill. Should you return the merchandise, you may pay shipping costs twice. Ask the company what kind of policy it offers for reimbursement of shipping charges for returned items.
  • For extra protection, use your credit card instead of a check or cash when making a purchase. If there is a problem with the merchandise, contact your credit card issuer immediately. You generally have 30 to 60 days to dispute a charge with the issuer.

Infomercials
This form of advertising consists of half hour to hour-long commercials aimed at trying to sell you a particular product. Many of these shows disguise themselves as actual television talk shows or consumer news programs, making it difficult to discern between real television programs and paid programming. The products sold on these shows run the gamut from fitness products, which have proven to be extremely popular, to cooking devices, and even beauty products. In order to draw attention to their product, advertisers often use celebrities and so-called “experts” to promote what they claim to be a “revolutionary” product. Many also use testimonials from ordinary looking consumers to prove how well their product works. Viewers, however, should keep in mind that these people are often being paid to promote these products. Although infomercials might look similar to television programs, it is important to realize that they are simply commercials with a different format.

Consumers should be aware of the following when viewing infomercials:

  • Most infomercials are very similar in content. They usually begin by discussing common annoyances such as household chores or losing weight and later attempt to solve the problem by introducing their product during commercial breaks.
  • Be skeptical of claims that seem exaggerated or too good to be true.
  • Ask for all claims that the company makes in writing. This will make it easier to dispute the effectiveness of a product if you are later unsatisfied with it.
  • Be wary of high-pressure sales tactics. Take time to think about whether you can find the same product at a lower price somewhere else.
  • Check out the company with your local Better Business Bureau.