Why TV Shopping Can Wreck Your Personal Finances

By Dawn Handschuh, Personal Finance Writer Archive

"Ladies, this shimmering ruby necklace is an important investment in your jewelry wardrobe. I just love, love, love this piece. Only 1,600 remain. Oh, they just sold out!
If you were lucky enough to grab one, congratulations."

If this sounds familiar, you're probably a TV shopping network customer. (After all, when was the last time you were congratulated as you checked out at The Home Depot?) Networks like QVC and HSN broadcast live 24 hours a day, 364 days a year, and liken themselves to full-scale department stores, hawking everything from exercise equipment, garden tools, and cosmetics to jewelry, housewares, food, and clothing.

For viewers, shows like these occupy a kind of alternate universe, where words like "recession" are never uttered. The on-air approach, which strives for a sense of neighborly community, is as much chatty-girl talk as it is a sales pitch, and the salespeople — known as "hosts" — have legions of adoring viewer-fans who fawn over them like celebrities.

"You're my favorite, Lisa — I just love watching you. And I was so excited
about the 2-carat diamond butterfly pendant that I had to buy one for my sister."

What may seem like harmless entertainment for the millions of middle-aged women who represent these shows' core audience is actually a multi-billion-dollar-a-year business reaching into the homes of nearly 100 million families.1 In 2007, QVC's sales grew 5% to $7.4 billion.2

Is there a disconnect here? Americans are struggling with a slumping economy, slowing job growth, soaring food costs, and record-setting gas prices. Household money management has become a bigger challenge than ever.

For those who are trying to limit spending on baubles — jewelry has historically been a top seller3 — in favor of basics like gas and groceries, tuning in to a home shopping channel can be risky business.

According to Debtors Anonymous, one sign of out-of-control debt is compulsive shopping, "being unable to pass up a good deal, making impulsive purchases, leaving price tags on clothes so they can be returned, and not using items you've purchased."

April Lane Benson, Ph.D., a New York psychologist who specializes in treating compulsive buying disorders, says TV shopping channels — what blogger Marie Phillips described as "the Pringles of television" — can be seductive for overshoppers. (Benson's book, To Buy or Not to Buy: Why We Overshop and How to Stop, is being released this year by Trumpeter Books.)

"The psychological pressure to buy can become nearly unbearable," says Benson. "These channels rely on the emotional connection that you begin to make with the pitch people on the screen and that intensifies as you watch, a psychological bond carefully forged of three elements. First, there's the intimacy of television, in which sellers seem right here with us in our living room or bedroom. Next, there's the presentation style, which magnifies that intimacy; sellers talk directly and warmly to us. They become, in effect, earnest and attractive friends. Finally, there's the accumulated impact of repetition; as offer follows offer, we lose the power of resistance."

Benson described one patient who wracked up $25,000 in credit card debt buying jewelry on QVC. "She was an insomniac, and she loved jewelry, so when she couldn't sleep, that's what she did."

Other experts say that TV shopaholics may not only hide their purchases (like an alcoholic who hides the booze), they often have secret credit card accounts they hide from spouses. Not surprisingly, relationships suffer when debt is covered up with deception.

Benson advises those not immune to high-pressure sales tactics to have their cable TV company disconnect the shopping channels. If you must watch, she says, recognize that the ticking clock and the "one-time-only special price" are gimmicks designed to excite by "professional pitch people who bring shopping evangelism to their craft," compelling viewers to buy what they don't need.

"Don't for a moment suppose that the sellers are meaningfully connected to you. Paid salespeople aren't your friends," she warns.

Footnotes
1 "Big Break," Entrepreneur Magazine, May 2008
2 "QVC Shoppers Prop Up Liberty Media," Fortune, February 28, 2008
3 "Attention Shoppers!" Broadcasting & Cable, November 28, 2005