Secrets that the As Seen On TV Industry Doesn’t Want You to Know About

As a HighYa reader, you know that we talk a whole lot about As Seen on TV products. In fact, it would probably be fair to call us a little obsessed with the ASOTV industry, which includes not only their products, but their core business model as well.

Because of this, you’ll find an extensive amount of information about these products here on HighYa, including articles that focus on how their commercials are designed to make you buy, how to purchase one if you decide to take the plunge, and how to deal with customer service to get results. Not to mention the more than 700 ASOTV product reviews we’ve written, which feature thousands of comments and shared experiences from consumers just like you.

But why are we so focused on keeping you informed about As Seen on TV products in the first place? Because, although they technically don’t meet the definition of a scam, HighYa readers tend to use this word frequently when describing their ASOTV experiences, as do thousands of other consumers all across the internet, since they feel duped out of their hard-earned money.

“Telebrands cannot be trusted to do right by its customers or to even honor its own 2001 pledge to follow our consumer protection laws.” —John Hoffman, Attorney General

This is because ASOTV manufacturers have their entire process down to a science; from ideation and manufacturing, to distribution and customer service, these guys know exactly what they’re doing—squeezing every last penny out of the products they sell. Granted, this is the backbone of a free market economy, but if they knew all the details, it’s likely that most consumers would feel that ASOTV manufacturers have taken it too far.

How? Let’s find out.

Common Complaints Against Telebrands

If you’re even remotely familiar with As Seen on TV products, you’ve almost certainly heard of Telebrands, which is the oldest ASOTV company in existence, who makes a slew of popular products such as Amish Secret, Ankle Genie, Copper Hands, Grassology, Trusty Cane, Pocket Hose Ultra, and many more.

But other than the manufacturer, what do these products have in common? For the most part, consumers were displeased with their purchases. In fact, if you read through HighYa Reader reviews for these (as well as many of Telebrands’ other products), you’ll find that the average rating is just 1.5 stars, primarily due to complaints of:

  • Poor quality
  • Products that don’t work as advertised
  • Extremely high, non-refundable S&H charges
  • Orders placed without the customer’s consent
  • Poor customer service (long hold times, frequent disconnections, difficulty processing returns, etc.)
  • Frequent upsells, whether on the phone with customer service, checking out online, or through spam or unwanted sales calls. Saying “no” is difficult, and in some instances, impossible. We’ll talk more about this later.

In other words, many of these customers might say that Telebrands sells cheap products that break easily, makes them difficult to return, and upsells you throughout the process. And while we’ve been warning our readers about this for a long time, it appears that governmental authorities are now beginning to take notice as well, and are exposing some of the company’s less-than-stellar business practices.

The State of NJ Takes on Telebrands

According to an August 2014 action filed by the NJ Attorney General and Department of Law & Public Safety Division of Consumer Affairs, “The state alleges that Telebrands violated the Consumer Fraud Act through its practice of aggressively upselling products through its automated phone system and websites, failing to provide means for consumers to opt out of the ordering process, shipping and billing for products not ordered by consumers, and using misleading advertisements, among other violations.”

In addition, the state of NJ alleges that Telebrands violated a 2001 Final Consent Judgment and Order requiring the company to comply with the Consumer Fraud Act. To this end, Acting Attorney General John J. Hoffman was quoted as saying, “As demonstrated by its alleged actions, Telebrands cannot be trusted to do right by its customers or to even honor its own 2001 pledge to follow our consumer protection laws. We are bringing this action to end the abusive business practices that Telebrands allegedly is inflicting upon consumers.”

While the investigation is only 3 months old as of this writing, and the Consumer Fraud Act allows for up to $10K fines per violation, the state of NJ feels that Telebrands’ business practices are so egregious that they’re seeking to enhance the fines to $20K per violation. In other words, this could end up costing the company dearly.

The Story Behind NJ’s Action Against Telebrands

The complaint against Telebrands claims that, “From 2012 through July 2014, the Division has received, either directly or indirectly, 340 consumer complaints regarding Telebrands' business practices.”

In order to investigate the company, the state of NJ ordered Instabulbs, Olde Brooklyn Lantern, and Pocket Hose from Telebrands, and found that:

  1. Customers were connected to an automated phone ordering system instead of a representative, which didn’t provide the option to speak with a live person.

  2. Using this system, customers were subjected to “a lengthy ordering process, sometimes lasting over half an hour.”

  3. During the call, customers were offered numerous additional products (in fact, the investigators were upsold 7 different products when ordering Instabulb), although the phone system didn’t provide a way to decline.

  4. Even if they were able to decline, Telebrands still charged and shipped this additional merchandise to the consumer anyway. Then, the company made them pay return S&H charges for refunds on products they never ordered in the first place.

  5. The company didn’t let customers know about their purchase, cancellation, and return policies.

  6. Telebrands didn’t provide consumers with an order total prior to authorizing charges.

Another big problem that the state of NJ found during their investigation, and something we’ve talked about extensively, is that Telebrands “failed to inform consumers when they are completing their merchandise order and authorizing charges.” In other words, if a customer entered their credit card information into the ordering field on the product’s website, but never actually finalized their order (e.g. pressing the “Order” button), their credit card was charged anyway.

Granted, many of these tactics are used by other ASOTV companies as well, in addition to a wide variety of nutritional supplements and anti-aging products manufacturers, so it’s not solely confined to Telebrands.

With this said, let’s dive into the As Seen on TV business model, and get a better idea of how the system works.

How the As Seen on TV Business Model Works

Part I: The Right Product

Although ASOTV products make up a $150 billion industry, the truth is that very few of them end up being runaway successes. As such, the industry is always looking for new inventions that can be sold under the ASOTV umbrella, most of which come from independent inventors, making the product cycle look something like this:

Inventors/Entrepreneurs → Direct Marketing/Response Companies (Telebrands, Tristar, etc..) → As Seen on TV Brand → Consumer

To this end, Telebrands’ founder Ajit J. Khubani has been quoted as saying, “The [products] that are successful in test marketing are fairly few, because the odds of coming up with a success are pretty slim, which is just the nature of the business.”

And this Yahoo Finance article quoted Thomas Haire, editor-in-chief of Response Magazine, putting an even finer point on it: “For every Snuggie, there are 19 products that didn’t make it.”

With this in mind, Entrepreneur writes that there are 3 primary factors that go into deciding whether or not to market a potential product:

  1. Can its benefits be demonstrated?
  2. Does it have mass appeal?
  3. Is it unique or novel?

But once a potentially viable product has been identified, what happens next?

Part II: The Right Pitch

Now it’s time to start marketing this product, and there’s perhaps no better industry at making cheaply-made, ho-hum products appear revolutionary than ASOTV companies. In fact, they’ve essentially turned selling into a science, and know exactly how to push consumers’ buttons.

According to a 2010 Consumer Reports article, “Infomercials take viewers on a psychological roller-coaster ride. The fun starts with dramatizations of a problem you didn't know you had, followed by the incredible solution, then a series of ever more amazing product benefits, bonuses, and giveaways, all leading to the final thrilling plunge of an unbelievably low price. After the ride, Lindstrom says, dopamine levels drop in 5 or 6 minutes. That's why infomercials ask you to buy in the next 3 minutes.”

For an in-depth look at precisely how infomercials prime you to buy, and how you can avoid falling under their spell, be sure to read through HighYa’s How Infomercials Convince You to Buy article.

Part III: Making the Sale

Now, all that’s left is for you to make your purchase. Because your dopamine levels are running high and you’re excited to hand over your money, you’ll be much less likely to read the fine print, which can cost you dearly.

As an example, let’s say you’re interested in purchasing Widget X, which is offered at an “amazingly low price” of $10 and comes with a $6.99 S&H charge. However, ASOTV products are legendary for “doubling your offer,” just pay an additional S&H charge (in this case another $6.99). Ultimately, this means you’ll be paying almost 40% more in S&H charges than you will for the product itself.

Another sneaky method many ASOTV companies use to hang on to more of your money is through automatic enrollment in an autoship program, which means that you’ll continue receiving a regular supply of the product and your credit card will be charged accordingly each time.

While many manufacturers claim to do this in order to ensure you’ll never run out, or that it provides some kind of convenience, the reality is that many consumers have cited difficulty cancelling their ASOTV autoship programs. In fact, many claimed to have been forced to cancel their credit cards in order to put a stop to the recurring charges.

Part IV: Discouraging Returns

Again, referencing the 2010 Consumer Reports article from above, it’s fairly clear that, based on hundreds of HighYa reader reviews, at best, most ASOTV products fail to perform as advertised, and at worst they’re complete junk. Because of this, most ASOTV manufacturers understand that there’s a high probability customers will be dissatisfied and will attempt to obtain a refund.

But just like the other parts of their business model, ASOTV manufacturers have rigged the refund process to act as a strong deterrent against processing refunds. How?

  • Remember those high S&H charges we talked about earlier? They’re non-refundable. Returning to our Widget X example, this means that you’d be losing more money in S&H charges than you’ll receive as a refund, even before including the S&H fees you’ll incur by shipping the product back to the manufacturer. As such, many customers would rather hang on to the product than repackage everything, visit the post office, pay to send the product back, and constantly follow up with customer service. Ultimately, their throw their hands up in frustration and chalk it up to a lesson learned.
  • Even if you’re resolved to losing a ton of money on S&H charges, you’ve just taken one step on a potentially long journey. Going back to the State’s action against Telebrands, this is because customer service personnel are often specifically trained to make the refund process as difficult as possible, including multiple transfers to different representatives, long hold times, and frequent disconnections. As the NJ Consumer Affairs article notes, “when consumers attempted to return unwanted products and obtain refunds, they allegedly couldn't reach actual customer service representatives and were subjected to return policies that differed from what was represented in ads and on the company's web site."
  • Upsells. If you successfully dodged all the upsells during the ordering process, be prepared to experience them again when attempting to request a refund. Often times, service personnel will offer you some sort of consolation in lieu of a refund, such as half off the product’s price or enrollment in “everyday savings plans.” In some instances, customers have reported that representatives wouldn’t take “no” for an answer, or that they were simply duped out of more money due to additional recurring monthly charges.
  • After everything is said and done and your tracking number shows that the package was delivered to the company, you may encounter additional stall tactics, such as claiming the product was never received, or that it didn’t meet some kind of requirement (e.g. was packaged incorrectly, didn’t have an RMA number written on the outside, etc.).

So, with the deck stacked against you, what can you do to avoid regretting your ASOTV purchase?

How Can You Avoid Regretting Your As Seen on TV Purchase?

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First, resolve yourself to the fact that you have about a 50/50 chance of being pleased with your ASOTV purchase and being dissatisfied. Once again referencing the Consumer Reports article noted above, this is because, “The magic of TV and film editing and shooting can make anything look good, [but only] about half of infomercial products deliver on their promise, [while] 30 percent do what they say but are a bit expensive, and the rest are junk.”

Second, keep in mind that the product may be available through a local retailer, since reaching store shelves is the ultimate goal for most ASOTV products. Even if it’s not, there may be similar versions of the product manufactured by mainstream companies, often for less money. And while the quality of the product itself may not differ, at least you’ll be able to avoid losing S&H costs and experiencing poor customer service if you’re dissatisfied and decide to pursue a return.

Third, do your research. Consumer advocacy and customer review websites like HighYa exist solely to help you avoid scams and become a more informed consumer, so if you’re thinking about purchasing an ASOTV product, check here first to see what other customers are saying about it before you process your order.

Finally, if you’ve already fallen victim to some of these less-than-stellar ASOTV products, don’t be too hard on yourself. This is because you still have a wide variety of available options if a company has scammed you, including filing a complaint with the FTC and the state in which the company does business, disputing credit card charges, and even becoming part of a class action lawsuit.

HighYa Research Team

The HighYa Research Team is passionate about helping you save money and make smarter purchasing decisions about everything the internet has to offer.