Advertising Scams
(Part 6 – Deception Through Inflation)
Investor’s World defines “inflation” as “The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. Over time, as the cost of goods and services increase, the value of a dollar is going to fall because a person won't be able to purchase as much with that dollar as he/she previously could. While the annual rate of inflation has fluctuated greatly over the last half century, ranging from nearly zero inflation to 23% inflation, the Fed actively tries to maintain a specific rate of inflation, which is usually 2-3% but can vary depending on circumstances.”
Even with that definition, and the many others available to us, economists argue over what it really means, what causes it, and how to fix it (assuming there is a need to).
In An Analysis and History of Inflation, Don Paarlberg states, “Consumers blame food processors and distributors for price increases that result from inflation. Likewise, increases in rent are attributed to greedy landlords. Manufacturers who raise prices are accused of profiteering, even when they may be losing money.”
He goes on to explain that inflation is actually caused by the government’s continuous increase in the amount of money available – the more money, the less it is worth, and the more (in terms of the American dollar) things will cost.
Many consumer advocates, though, including myself, feel that in some cases manufacturers and merchants do artificially cause price inflation in order to increase profit. The case for this was made by WalMart’s demand this past winter that its suppliers lower wholesale prices or they would switch to less expensive brands, including their own house label. If the rapid rise in food and household good costs was out of the control of the manufacturers, shippers, and others involved in the production end, WalMart, the leading brand in price management, would not have made the demand. To back up that possibility, it was reported that within a few weeks more than half the suppliers did roll back prices, some considerably.
Others blame the theory of Supply and Demand as the cause of inflation – not only is the population increasing, thus causing more demand, nations that previously had little need for luxury products are now clamoring for them. Opposing that is the ever-increasing efficiency of manufacturing and production. Increases in demand are frequently offset by greater production per acre (which is offset by fewer acres being dedicated to production). Increases in demand are offset by more efficient production methods and the use of new material (which is offset by a decline in availability of raw material).
Mr. Paarlberg also comments, “The logical way to deal with the problem of inflation is to stabilize the value of money, in which case both inflation and deflation would disappear, and their inequities with them. It is understood that the way of doing this is to limit the issue of money. But such a course would require more discipline than the public and public officials worldwide have been able to muster. There are those who have vested interests in inflation, and others who gain by deflation, so none of the various proposals for stabilizing the value of money has been found acceptable.”
This, though, does not take into account the growing desire by managers and stockholders for greater salaries, dividends and benefits.
There is one pressure that consumers can bring forth to fight artificially induced inflation – stop purchasing those products whose prices have artificially increased. Look for sales, purchase store brands, compare prices from store to store.
There are nine supermarkets within 12 miles of my house. This week one is selling green seedless grapes for 89-cents, one has 99-cents, and another $1.29. The remaining are all charging $1.99 to $2.99 a pound. One has the audacity to advertise their $2.49 price as a “sale.” If you purchase grapes at any of the higher-priced stores you are fostering artificial inflation.
During any week, anywhere in the country, you will find similar discrepancies. Until the consumers of this country become better education and act with knowledge, deception through inflation will remain with us.
Monday, August 24, 2009
Monday, August 17, 2009
Consumer Safety & Awareness Part 31
Advertising Scams
(Part 5 – Deception Through Omission)
In a previous blog, we mentioned that advertisements are usually not long enough to include all aspects of a product. They certainly have no opportunity, even if they were foolish enough to want to, to include significant facts about similar competing items, except in a negative way.
Infomercials, though, many of which run 30 or 60 minutes in length, have sufficient time to provide such detail, yet somehow neglect to do so. In a half-hour commercial for an exercise machine, you may see 20 minutes of some healthy, robust individual using the product, always smiling, youthful, and sweat-free. The “host” continues to repeat the same fantastic reasons why this is the best toning, weight-loss, and muscle-building product on the market.
At no time are they any cautionary statements, except perhaps to check with your doctor to make sure you are healthy enough to use the machine. They do not expect anyone to do so, but their insurance carrier demands that such statement be included. Consider the disaster when someone is injured (and there always are injuries on any type of exercise equipment), and there had been no disclaimer. And what is not included in the ad is placed in the instruction book, with bright red stop signs and “caution” and other such labels.
Once you have purchased the product there is little chance of you returning it, and perhaps little opportunity to do so. Now that you have it you can be told of all the dangers to pets, children, and even healthy people cause by moving parts, heavy weights, sneezing while in motion, and… well any possible potential dangers.
Here are some warnings we found – try to discover what type of product they were on.
1. Remove wrapper, open mouth, insert muffin, eat. (OK, that one was obvious)
2. Use like regular soap, (See below, yes- you can peek)
3. This product is not to be used in bathrooms.
4. Do not climb over fence.
5. Please do not eat.
6. Do not use while sleeping.
7. Keep out of children.
8. May irritate eyes.
9. Do not use as earplugs.
Everyone always does ten of these. I decided to do nine just to be different.
Products that may really need to include precautions never put them in either their advertisements nor on the outside of the container. Probably the most famous warning is on computer software where the box has a warning not to open the package until you agree to the license for use agreement. The license can be found inside the box.
Also left off commercials is a list of other similar products that may perform better, be less expensive, more reliable, or healthier. It’s obvious why. Try to imagine a Pepsi commercial that states, “Store brand colas may be produced in our factory, have exactly the same ingredients and taste, yet cost half of what we charge.” Or perhaps this imaginary statement from a fast food restaurant, “Our ¼ pound hamburger averages 800 calories. It contains fillers, preservatives, and potentially other unhealthy ingredients. Eating this may lead to heart attacks, cancer, or allergic reactions.”
One can only wonder what an honest cigarette commercial might include. Now that the FDA can regulate contents, additives, and cigarette advertising, perhaps some honesty may appear. “If you smoke this product you have an 80% chance of becoming addicted. Continued use may lead to all sorts of unhealthy side effects. Breaking the smoking habit may be impossible. Since they cost so much you may land up a pauper, but your habit will still have you scrounging for something to smoke. But you’ll look cool.”
Answers:
1. Yes, a muffin
2. A bar of soap. Seriously.
3. A “Portable Bathroom Heater.”
4. Lion cage in a zoo,
5. A package of “Odor Eaters”
6. On a hair dryer.
7. Adhesive warning on a kitchen knife
8. On pepper spray
9. On a package of “Silly Putty”
(Part 5 – Deception Through Omission)
In a previous blog, we mentioned that advertisements are usually not long enough to include all aspects of a product. They certainly have no opportunity, even if they were foolish enough to want to, to include significant facts about similar competing items, except in a negative way.
Infomercials, though, many of which run 30 or 60 minutes in length, have sufficient time to provide such detail, yet somehow neglect to do so. In a half-hour commercial for an exercise machine, you may see 20 minutes of some healthy, robust individual using the product, always smiling, youthful, and sweat-free. The “host” continues to repeat the same fantastic reasons why this is the best toning, weight-loss, and muscle-building product on the market.
At no time are they any cautionary statements, except perhaps to check with your doctor to make sure you are healthy enough to use the machine. They do not expect anyone to do so, but their insurance carrier demands that such statement be included. Consider the disaster when someone is injured (and there always are injuries on any type of exercise equipment), and there had been no disclaimer. And what is not included in the ad is placed in the instruction book, with bright red stop signs and “caution” and other such labels.
Once you have purchased the product there is little chance of you returning it, and perhaps little opportunity to do so. Now that you have it you can be told of all the dangers to pets, children, and even healthy people cause by moving parts, heavy weights, sneezing while in motion, and… well any possible potential dangers.
Here are some warnings we found – try to discover what type of product they were on.
1. Remove wrapper, open mouth, insert muffin, eat. (OK, that one was obvious)
2. Use like regular soap, (See below, yes- you can peek)
3. This product is not to be used in bathrooms.
4. Do not climb over fence.
5. Please do not eat.
6. Do not use while sleeping.
7. Keep out of children.
8. May irritate eyes.
9. Do not use as earplugs.
Everyone always does ten of these. I decided to do nine just to be different.
Products that may really need to include precautions never put them in either their advertisements nor on the outside of the container. Probably the most famous warning is on computer software where the box has a warning not to open the package until you agree to the license for use agreement. The license can be found inside the box.
Also left off commercials is a list of other similar products that may perform better, be less expensive, more reliable, or healthier. It’s obvious why. Try to imagine a Pepsi commercial that states, “Store brand colas may be produced in our factory, have exactly the same ingredients and taste, yet cost half of what we charge.” Or perhaps this imaginary statement from a fast food restaurant, “Our ¼ pound hamburger averages 800 calories. It contains fillers, preservatives, and potentially other unhealthy ingredients. Eating this may lead to heart attacks, cancer, or allergic reactions.”
One can only wonder what an honest cigarette commercial might include. Now that the FDA can regulate contents, additives, and cigarette advertising, perhaps some honesty may appear. “If you smoke this product you have an 80% chance of becoming addicted. Continued use may lead to all sorts of unhealthy side effects. Breaking the smoking habit may be impossible. Since they cost so much you may land up a pauper, but your habit will still have you scrounging for something to smoke. But you’ll look cool.”
Answers:
1. Yes, a muffin
2. A bar of soap. Seriously.
3. A “Portable Bathroom Heater.”
4. Lion cage in a zoo,
5. A package of “Odor Eaters”
6. On a hair dryer.
7. Adhesive warning on a kitchen knife
8. On pepper spray
9. On a package of “Silly Putty”
Tuesday, August 11, 2009
Consumer Safety & Awareness Part 30
Advertising Scams
(Part 4 – Deception Through Comparison)
My dog’s better than your dog. (Taken from a pet food commercial in the 1970s.) That can be extended to any topic – my car, my home alarm company, my clothing line, my anything you want to buy. Comparing one item with another, whether similar or totally different, is an advertising gimmick that has been around for ages.
No matter what you compare, unless it’s an item to itself, any such action is deceitful and unfair. By law (copywrite and patent) no two products can be alike. Fords and Toyoda, Sealy and Perfect Sleeper, Coke and Pepsi. The best thing about having different products that fill in a similar nitch is that every person is unique, and our interests and likes differ.
When an advertisement uses taste tastes, or softness tests, or whatever comparison they use, you can bet the people they select for their poll are very carefully chosen. One of the criticisms placed on President Bush was that he stacked his community meetings with loyal Republicans and anyone who showed disagreement was removed from the hall. Can you imagine partisan political polls where the Republican tally only fanatical religious conservatives and the Democrats select gay-rights, pro-choice atheists? The results will be rather skewed.
So when a medicine is selected by 9 out of ten doctors, one must question whether those physicians (we assume in such cases that “doctor” = medical practitioner and not someone with a Doctorate in Engineering) have received massive amounts of that product as free samples, or whether they work for the company in question.
No poll, no sample, will ever ask all the qualified people. Political polls question perhaps a few thousand and extrapolate the results based on scientific and statistical principles. An advertising company has no such requirement. They can place their sample in tiny print somewhere in the ad, and keep it on the screen for five seconds. If they even do that much.
Nine out of ten cans prefer Friskies? Perhaps that was the only food they have been fed for the last three months and what they are used to.
Nine out of ten people prefer Blue Bonnet? Perhaps their only other choice was a product that had been specifically chosen for its poor quality.
Even worse are commercials that compare parts of their product to parts of others. I have no idea how many types of cars are available in the United States (and am too lazy to research that at the moment). When a vehicle commercial says their model gets better mileage than Car B as well as a better ride than Car C, and costs less than Car D, my first thought is that Cars B, C, and D must then have dozens of aspects better than the advertised vehicle.
Obviously no ad can compare the top 50 or so most important facets of an automobile (and even that would vary depending on who you talk to). That is why Consumer Reports has an annual car issue – so we can compare such things, and get our information from a mostly reliable independent source. That is why Motor Trends, Car & Driver, and dozens of other automotive magazines also provide such information.
So let’s use those magazines – “Our car was chosen best in its class by Motor Trend.” Isn’t that also using a comparison? Perhaps Car & Driver selected another vehicle. Perhaps Motor Trend select it, yet had many things to criticize. No comparison commercial will ever give you a negative report on the item being sold.
(At this point I went out to do some shopping. I passed an ad for a law firm voted “The Best in the Hudson Valley.” The best what? Voted by whom? Compared to what other law firms?)
Advertisements must remain within the bounds of the law. Even the worst product can compare itself to something else and claim to be better, stronger, healthier, tastier, or less fattening. Comparisons are simply deceptive advertising.
(Part 4 – Deception Through Comparison)
My dog’s better than your dog. (Taken from a pet food commercial in the 1970s.) That can be extended to any topic – my car, my home alarm company, my clothing line, my anything you want to buy. Comparing one item with another, whether similar or totally different, is an advertising gimmick that has been around for ages.
No matter what you compare, unless it’s an item to itself, any such action is deceitful and unfair. By law (copywrite and patent) no two products can be alike. Fords and Toyoda, Sealy and Perfect Sleeper, Coke and Pepsi. The best thing about having different products that fill in a similar nitch is that every person is unique, and our interests and likes differ.
When an advertisement uses taste tastes, or softness tests, or whatever comparison they use, you can bet the people they select for their poll are very carefully chosen. One of the criticisms placed on President Bush was that he stacked his community meetings with loyal Republicans and anyone who showed disagreement was removed from the hall. Can you imagine partisan political polls where the Republican tally only fanatical religious conservatives and the Democrats select gay-rights, pro-choice atheists? The results will be rather skewed.
So when a medicine is selected by 9 out of ten doctors, one must question whether those physicians (we assume in such cases that “doctor” = medical practitioner and not someone with a Doctorate in Engineering) have received massive amounts of that product as free samples, or whether they work for the company in question.
No poll, no sample, will ever ask all the qualified people. Political polls question perhaps a few thousand and extrapolate the results based on scientific and statistical principles. An advertising company has no such requirement. They can place their sample in tiny print somewhere in the ad, and keep it on the screen for five seconds. If they even do that much.
Nine out of ten cans prefer Friskies? Perhaps that was the only food they have been fed for the last three months and what they are used to.
Nine out of ten people prefer Blue Bonnet? Perhaps their only other choice was a product that had been specifically chosen for its poor quality.
Even worse are commercials that compare parts of their product to parts of others. I have no idea how many types of cars are available in the United States (and am too lazy to research that at the moment). When a vehicle commercial says their model gets better mileage than Car B as well as a better ride than Car C, and costs less than Car D, my first thought is that Cars B, C, and D must then have dozens of aspects better than the advertised vehicle.
Obviously no ad can compare the top 50 or so most important facets of an automobile (and even that would vary depending on who you talk to). That is why Consumer Reports has an annual car issue – so we can compare such things, and get our information from a mostly reliable independent source. That is why Motor Trends, Car & Driver, and dozens of other automotive magazines also provide such information.
So let’s use those magazines – “Our car was chosen best in its class by Motor Trend.” Isn’t that also using a comparison? Perhaps Car & Driver selected another vehicle. Perhaps Motor Trend select it, yet had many things to criticize. No comparison commercial will ever give you a negative report on the item being sold.
(At this point I went out to do some shopping. I passed an ad for a law firm voted “The Best in the Hudson Valley.” The best what? Voted by whom? Compared to what other law firms?)
Advertisements must remain within the bounds of the law. Even the worst product can compare itself to something else and claim to be better, stronger, healthier, tastier, or less fattening. Comparisons are simply deceptive advertising.
Monday, August 3, 2009
Consumer Safety & Awareness Part 29
Advertising Scams
(Part 3 – Deception Through Exaggeration)
Before you read this Blog, take a look at Fast Food: Ads vs. Reality, which shows pictures of fast food items as they were advertised along side of actual photographs. McDonald's Sausage McMuffin ad photo looks like it was before it was cooked (the English muffin is not toasted). The KFC Famous Bowl “actual” shot makes it look like something I would not feed my pets.
Before you purchase a product for the first time, any product, research reviews of it on the Internet. While it’s true that disgrumpled consumers write many reviews, and as many are actually written by the company that made the product, by reading between the lines you can get a feel for the quality, the reliability, and the cost-worthiness of the item.
Computer games are a good example. The advertising hype for the item may begin two to three years before the game is available. The reviewers are showing best-case possibilities. They are informed of what the finished product will be like. It is doubtful if the programmers are going to say that it’s a dud – they have invested millions of dollars into production. Always wait a few months before buying the game. You may land up getting version 2.5 with many of the bugs worked out. If the price falls from $49.95 to $19.95 in ten weeks, you know it’s a disaster.
Along the same lines, movie and television shows are hyped with grandiose terms: the show of the season, the best police drama on television, and this year’s huge hit. Quite a few of these absolutely perfect entertainment showpieces are off the air within four or six episodes. Sixteen million people may have tuned into the pilot show, 12 million the second week, 3 million remained around by the sixth week, and even the sponsors stopped watching soon after,
Who writes the reviews shown in the advertisements? Quite frequently it is truly the words of the reviewers. Yet there are three things you must consider:
1. Not all reviewers are sane. Quite a few liked “My Mother the Car.”
2. Some reviewers work for the television station. Do you think a reporter working for CBS is going to say a new CBS show stinks?
3. Advertisements are permitted to paraphrase or truncate a review. Consider: “This is the worst television show to come along in 20 years.” This may appear in the ad as, “The reviewer has not seen a show of this quality in 20 years.
Advertisers love superlatives: Best!!! Greatest. Sure to win awards (as the bomb of the year?). The best cereal for your heart, the best and fastest Internet connection, the best service. How about some honesty: “The biggest and most blatant exaggeration in advertising.
(Part 3 – Deception Through Exaggeration)
Before you read this Blog, take a look at Fast Food: Ads vs. Reality, which shows pictures of fast food items as they were advertised along side of actual photographs. McDonald's Sausage McMuffin ad photo looks like it was before it was cooked (the English muffin is not toasted). The KFC Famous Bowl “actual” shot makes it look like something I would not feed my pets.
Before you purchase a product for the first time, any product, research reviews of it on the Internet. While it’s true that disgrumpled consumers write many reviews, and as many are actually written by the company that made the product, by reading between the lines you can get a feel for the quality, the reliability, and the cost-worthiness of the item.
Computer games are a good example. The advertising hype for the item may begin two to three years before the game is available. The reviewers are showing best-case possibilities. They are informed of what the finished product will be like. It is doubtful if the programmers are going to say that it’s a dud – they have invested millions of dollars into production. Always wait a few months before buying the game. You may land up getting version 2.5 with many of the bugs worked out. If the price falls from $49.95 to $19.95 in ten weeks, you know it’s a disaster.
Along the same lines, movie and television shows are hyped with grandiose terms: the show of the season, the best police drama on television, and this year’s huge hit. Quite a few of these absolutely perfect entertainment showpieces are off the air within four or six episodes. Sixteen million people may have tuned into the pilot show, 12 million the second week, 3 million remained around by the sixth week, and even the sponsors stopped watching soon after,
Who writes the reviews shown in the advertisements? Quite frequently it is truly the words of the reviewers. Yet there are three things you must consider:
1. Not all reviewers are sane. Quite a few liked “My Mother the Car.”
2. Some reviewers work for the television station. Do you think a reporter working for CBS is going to say a new CBS show stinks?
3. Advertisements are permitted to paraphrase or truncate a review. Consider: “This is the worst television show to come along in 20 years.” This may appear in the ad as, “The reviewer has not seen a show of this quality in 20 years.
Advertisers love superlatives: Best!!! Greatest. Sure to win awards (as the bomb of the year?). The best cereal for your heart, the best and fastest Internet connection, the best service. How about some honesty: “The biggest and most blatant exaggeration in advertising.
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