As Seen on TV advertisements almost always end with the familiar spiel at the end: Buy one, get one free – just pay additional processing and handling. It’s standard practice for marketing As Seen on TV products, and for good reason: it virtually guarantees they won’t lose money.
If you purchase an As Seen on TV product – and decide to keep it – the company profits from selling the product and the extra money they charge for “processing and handling” above the actual shipping costs. If you decide to return the product, however, they’ll still profit. This is because the total cost of shipping, marketing, materials of these products is often equal to or less than the shipping and handling (or processing) charges of a single unit. And, unlike the product itself, the “processing and handling” is non-refundable.
The True Cost
In our research, we’ve found that the total cost of most As Seen on TV products – including production, marketing, packaging, and shipping – tends to be approximately the amount they charge for “processing and handling” for one item. Sometimes less. This means that the cost they charge you for the item itself is all profit, so even products with extremely high return rates are still profitable.
When they throw in the “get a second one for separate processing and handling,” they’ve simply increased their bottom line with very little extra cost to them.
The most common complaint among dissatisfied customers who have purchased As Seen on TV products is that they are cheaply-made. One would presume that this is because the weight and materials must be kept to an absolute minimum in order to keep shipping costs as low as possible. A $19.95 product sold on television might only cost the company a dollar or two in bulk from a Chinese factory.
If you pay $19.95 for a gizmo, then tack on $7.95 P&H and then another $7.95 for your second “free” product, you’ve just paid a total $35.85 for something that may have cost them $4 to produce, plus a couple more bucks to package and ship. Your second “free” item is usually boxed up with the first one, so additional costs for shipping and packaging is minimal. Even if you decide to return the items, they’ve still profited $10-$14 for the “processing and handling” you paid them.
Money Back Guarantee
The money-back guarantee exists to try to “prove” to you that the company believes in their product. It’s an influential marketing technique, and advertisers know that many people – even those dissatisfied with the product – won’t bother with the hassle of using it.
Should you decide to take advantage of the money back guarantee, it can be a frustrating due to low-end customer service farmed out to the lowest bidder.
Offering a “lifetime warranty” is yet another ploy to “prove” that a company believes in its product. Most of these products – and the companies that sell them – aren’t around for a lifetime. Even if parent companies still exist, finding anyone to honor its lifetime warranty is almost impossible once a product is retired.
Most As Seen on TV products require an inordinate amount of time to be delivered. This allows them to use the cheapest method of shipping available to them. It also allows them to charge extra to “expedite” shipping, which is also inflated to earn them additional profits. Many of our readers have complained that “expedited” shipping seemed to take just as long as regular shipping.
An added benefit of the “get a second one free” pitch is that they can advertise a lower price than they’re actually charging you. You’ll often see, “You get it all for just $19.95.” But $19.95 ends up being closer to $36 when 2x shipping is included. Or more.
Shipping and Handling vs Processing and Handling
In recent years there has been a transition from the phrase “shipping and handling” to the more vague “processing and handling.” Neither is really defined, and they are used interchangeably. One could argue that, in a $7.95 shipping/processing fee, it may cost $3 to ship, and nearly $5 for someone to put it in a box and attach a label.
There are times, however, that an As Seen on TV product ends up actually garnering positive reviews. In those cases, it’s often best to wait until it arrives on store shelves, then purchase it locally to avoid the hassle of shipping costs and delays.
It could be argued that the true product some As Seen on TV marketers are trying to sell is actually the non-refundable “processing and handling.” And as an extra bonus, you’ll even get a cheaply-made, over-hyped product thrown in for good measure.
Updated January 21, 2016
Originally published July 2013