Home Shopping Channel: Recipe for Financial Disaster

Andover, Massachusetts December 1st, 2010 – If you are like most Americans, you have at one time or another flipped through the channels and ended up on one of the two most common home shopping networks, QVC or HSN. Both have the same general format where vendors use the channel to present their goods to you and thus are able to reach hundreds of thousands of dollars at a relatively cheap price point. It is certainly less expensive to sell a good on QVC than it is to open a physical store, hire staff, and run the daily operations of a retail location. These are all pros for why the home shopping network is great for business owners, but what has it done for the average consumer? For most, home shopping has become a convenient way to purchase goods that they would otherwise have to drive around all day to find. But, much like most new convenient inventions, home shopping also makes it much easier for consumers to purchase items that they do not need on credit and thus placing them deeper and deeper into debt.



There are countless cases where consumers became "addicted" to the home shopping experience and thus end up in huge amounts of debt. Since the purchase can be finalized without ever even leaving the couch, home shopping is particularly dangerous to consumers who already have personal finance issues and debt problems. It takes a lot more effort to go to the bank, get cash, and then drive to the store and find the item you want to buy than it is to pick up the phone and call in an order after seeing the item on TV. These home shopping networks have also created products and services that have made it even easier, and more costly, for consumers to indulge in this shopping experience.



1.Paying through installments. Ever notice how the price of a product is typically given in a monthly payment? This is because these vendors know that a consumer is more likely to purchase a good if they know they can afford the monthly payment. It is a much easier sell to say a monthly payment of $50 than it is to say a lump sum payment of $500.



2.Costly Credit Cards. Like almost every other industry, the home shopping industry has created its own credit cards, which typically give some sort of perk to shoppers. While that is great, the cards are typically not the best with average interest rates much higher than bank issued cards. Remember, every time you open a new line of credit, your credit score takes a small dip.



3.Auto-Delivery. This is the one feature of certain home shopping products that I find to be the most damaging to consumers. Many of the products you can buy on television have this auto-delivery feature built in. It automatically ships more of the item to the consumer each month and charges their credit card automatically. By doing this, the vendor builds a continuous stream of income which is a huge boost to their bottom line. For consumers however it is much too easy to forget to cancel the offer and thus many end up paying for goods or services that they no longer need. Be extremely wary of any auto-delivery feature and find out how to cancel the product while initially purchasing it.



4.Remote Control Purchasing. The natural extension of shopping over the phone, new inventions in the TV industry now allow consumers to purchase an item on TV by just clicking a few buttons on the TV controller. Consumers need to be wary of using this service, as the easier it becomes to shop, the more likely it is that Americans will spend money on items that they don’t need and can’t afford.

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