(MONEY Magazine) – DoIhavenewsforYOUI'vegotthese wrencheshereTWOof'emTWO greatwrenchesanywhereelse youbuy'emthey'regonnachargeyou sixDOLLARSandthat'llbea VALUEaREALVALUEbutif you'reamongthenextONE THOUSANDcallersI'mgonna sellTWOofthesewrenchesfor TWONINETYNINE!!!! -- Shoppers Club of Virginia Welcome to the brash new world of armchair shopping. To be a part of it, assume a comfortable position in front of your TV and stay close to your telephone until an irresistible item appears on the screen. When it does, pick up the phone -- don't waste a moment -- dial the toll-free number and give the operator your Visa or MasterCard number. Now you can relax. In a week or so United Parcel Service will deliver your $271.25 amethyst ring, $239 remote- control video cassette recorder or $89 inflatable kayak. But while you are waiting, don't touch that dial. You could miss the $19.95 ceramic Noah's Ark that plays Talk to the Animals. Or the five-piece kitchen-cleaning set for $6.95. Or the 16-inch Tulane cheerleader doll in a regulation Green Wave uniform for $14.50. Millions of Americans are putting their money where their eyes are -- throwing hundreds of millions of dollars at the electromagnetic impulse of home shopping services. No fewer than seven TV sellathons, carried mostly on cable systems, are currently in production either nationally or locally, and media industry observers expect that at least three more will be pitching the programs' standard stock of jewelry, toys, clothing, electronics and household items by year-end.

The goods range from useful to useless, from truly tempting to totally tacky. Most of the products come from inventory liquidations or from unpopular or discontinued lines, occasionally making them difficult to service. Some are low priced, some high ticket -- but almost all, or so the TV salespeople say, are selling at huge discounts. But, cautions Candace Von Salzen, vice president for standards and practices at the national Council of Better Business Bureaus in Arlington, Va.: ''Either do some comparison shopping on things you know you want, or forgo something on the screen until you have had a chance to check the price.'' One reason: the bargains are sometimes illusory. What is not illusory is the shows' broad appeal, especially to impulse shoppers and, lately, to fad-following stock investors (see the box on page 82). The programs, led by the year-old Clearwater, Fla.-based Home Shopping Club, reach an estimated 10 million cable-TV households nationwide. And estimates are that buyers in roughly 5% of homes reached by the shoparamas make at least one purchase a year. Few stop at that, however: industry leader Home Shopping Club (estimated 1986 sales: $140 million) reports its average customer makes 18 purchases a year. Average price per item: $31.98. Average annual expenditure per customer: $563.36. For the most part, the fans of Home Shopping Club and the other warehouses of the air are price-conscious homemakers, retirees and anyone else who has time to spend in front of the tube. In general, they are satisfied customers. They pay willingly for merchandise that is normally of acceptable quality, is covered by the maker's warranty, if any, and, perhaps most important, satisfies the buyers' desire to acquire. Ordering from your easy chair is unquestionably convenient, delivery is reasonably reliable, and the shows themselves are nothing if not clubby and friendly. Of course, when you buy on impulse by phone after, say, a 30-second televised sales pitch whose tone can make those old wee-hours commercials for K-Tel Records, Pocket Fisherman and Veg-o-Matic seem mellow, you essentially forfeit your opportunity to make careful comparisons on price or quality. What's more, you can get hooked on the habit. Laments Suzanne Graves of Kansas City, Kans., who says she watches Home Shopping Club up to four hours a day and has spent more than $3,000 on HSC merchandise since November: ''It's like gambling; it's hard to keep it under control.'' Bicycle horns and cubic zircons Wednesday, 5:19 p.m.: Ahonka! Ahonka! All's definitely not quiet on the Home Shopping Club set, as the piercing bleat of a bicycle horn signals the arrival of new merchandise, a pair of pear-shaped cubic zirconium earrings weighing in at a total of one carat. The retail price, which appears on the left of the screen: $49.95. But, claims announcer Carmella Richards, ''These are worth at least $50 -- and we're not even talking about the setting! The retail prices we're giving you reflect a discount already. But our price: just $14.75!'' A woman who identifies herself only as Grandma Rae phones from somewhere in Florida. She giggles nervously as her call is carried over the air. ''That's the problem with saving,'' she says. ''You spend more.'' Ahonka! Ahonka! ''Call soon,'' cries Carmella. ''You won't see earrings this beautiful again for a long, long time.'' Sure enough, as a plastic implement nudges the synthetic-stone jewelry so the studio lights glint off what Carmella calls the ''58 beautiful facets,'' the earrings, which on TV resemble sequin-coated cockroaches, sell faster than Roach Motels during a garbage collectors' strike. In the right-hand corner of the screen is a running tally of sales: 115 pairs sold, 119, 122, 124. The sales mount with alarming speed -- indicating that you had better take Carmella's advice and call now. The fast-moving sales pitch seems paced to match the flash and glitz of the cubic zirconia, gold herringbone chains and other jewelry that make up 20% to 25% of the company's sales. Price range: $10 to $5,000. But between the on- screen gems, you could slip into catatonia as you stare at a static shot of up to 45 minutes of, say, a $19.75 ultrasonic pest repeller against a background slide that shows rats and roaches. Still, the merchandise moves. ''I'm sorry, folks,'' says Carmella. ''The earrings are all gone.'' Time elapsed: 11 minutes. ''But look at this gorgeous men's Sergio Valente leather travel case for only $15.50 . . .'' Sales of $400,000 a day Although Home Shopping Club has been widely carried on cable only since July 1985, the program was founded in 1977 by Florida merchandising entrepreneurs Lowell ''Bud'' Paxson, now 52, and Roy Speer, 53. It aired first as The Bargaineers, a 24-hour-a-day radio call-in show on WWQT, a now-defunct station in Clearwater. In 1981 the show began appearing on a local cable-TV channel. Today, beamed up to a satellite from an unprepossessing shopping center in Clearwater, it is seen 24 hours a day, seven days a week, in all 50 states. HSC reaches 7 million TV households and has 1,200 employees, 530 toll- free telephone lines and four warehouses totaling 100,000 square feet of space -- not to mention sales of close to $400,000 a day. None of the other TV shopping shows even come close to matching HSC's size. Indeed, the upstart's $140 million projected annual sales already exceed those of such better-established direct-mail competitors as the Sharper Image catalogue (roughly $100 million) and are gaining on mail-order giant L.L. Bean ($300 million). But if HSC's on-cable competitors cannot yet match its numbers, they can imitate its selling techniques. Key elements: telephones and major credit cards -- though some firms, including HSC, will accept personal checks. No matter the seller, most purchases are shipped by UPS at rates that vary by the item's weight and bulk. Goods usually arrive within 10 days. As a rule, the shopping shows are as good as their word about paying refunds unconditionally for merchandise that is returned undamaged. HSC's Paxson goes one better. Says he: ''Even if you beat on it with a hammer, we'll take it back.'' Hyperbole? Perhaps. But retail and consumer affairs consultants canvassed by Money say the TV shopping shows have an adequate customer satisfaction record. Says Thomas Rauh, a retail consultant for the New York City-based accounting firm Touche Ross: ''There is a lot of repeat usage of these shows. The buyers seem very satisfied with the merchandise and the shopping experience.'' In the two years through March 1986, the Consumer Affairs Department of Pinellas County, Fla., where HSC is based, logged only 23 complaints against the firm. More than half have been resolved to the customers' satisfaction. Says William Richards, the consumer department's director: ''With those few com- plaints, HSC seems to be doing well.'' HSC's putative rival Cut to the Twin Cities, home of Cable Value Network. You probably have not heard of it. Unless you own a satellite dish or subscribe to one of roughly 200 selected cable systems used since May to test the show, you almost surely have not seen it. But Wall Street analysts say CVN is HSC's most formidable potential opponent. Reason: its financial backers include founder and merchandise supplier, Minneapolis-based COMB -- for closeout merchandise buyers, one of the nation's leading direct marketers (1985 sales: $115 million) -- plus cable-TV giants American Television & Communications (ATC), Tele-Communications, United Cable Television and Warner Communications. (ATC is wholly owned by Time Inc., which publishes Money.) Next month the co- investors plan a full-scale national rollout of CVN, with 24-hour-a-day shopping seven days a week. CVN is produced on location at COMB's 92,000-square-foot warehouse in Plymouth, Minn. The smell on the set is not of greasepaint but of sawdust. The props? Forklifts, crates and cranes. Items for sale: the usual TV-shopping fare, though CVN prides itself on offering more upscale, brand-name merchandise than its competitors. Maybe so. But so far the staples -- even among brand-name products -- have been closeouts and slow-moving or discontinued items. There's nothing slow moving, however, about CVN's principal co-hosts Mike Sullivan and Leesa Cherry, who banter back and forth like a Middle American Stiller and Meara. Still, hard-core salesmanship is at the heart of the act. Recently, Cherry offered turn-of-the-century Swedish Army bayonettes -- no family should be without one -- at no extra charge to viewers who called in orders for a $39 knife set. And a sample of her sidekick's spiel: ''Mike Sullivan on the air. For those who call in the next 10 minutes, you get two sets of $50 scissors for the price of one. And our price? Just $19!'' The price is right -- sometimes But what of that price, and what of all the other prices for all the goods on TV shopping shows? Some careful comparison shopping, along with interviews of manufacturers, wholesalers and retailers, show that there unquestionably are bargains. Take the Bell & Howell TV/VCR unit that HSC sold recently for $562.50. Audio Visual Workshop in New York City offers the discontinued item for $1,280, which it calls a $300 discount. At Midwest Visual Equipment in Lincolnwood, Ill., the machine was recently available for a stiff $1,450. Or consider the now-discontinued Kodak 8000 disk camera from CVN. It recently sold for $49 on the show. At Dayton's department store in Minneapolis, however, this camera is still available -- for $84.95. In truth, significant bargains appear regularly but randomly. And although comparison shopping among discontinued merchandise is extremely tricky, some bargains are not all they are cracked up to be. One common tactic, not limited to TV retailers, is to quote an unrealistically high suggested retail or manufacturer's list price -- a notoriously blurry figure anyway. Strictly speaking, the price may not be inaccurate. But it may represent the highest price the manufacturer cited when the item first came out, or the price you might see in such super-markup outlets as airport gift shops or deluxe hotel boutiques. Recently, HSC pitched a Seiko T102 pocket color TV, citing a suggested retail price of $514 and offering it to HSC buyers for $185. HSC's $514 retail price is, in fact, close to Seiko's original 1984 suggested retail of $550. But the company quickly reduced that price to $399 when the sets did not sell. Still, HSC's price was attractive, says Michael Karmazin, national sales manager for Seiko's consumer electronics division. Bargains that aren't In other instances, prices offered by the TV shopping shows are no better, and in a few cases are perhaps even worse, than those a savvy buyer could find by comparison shopping. Perhaps the most perilous category of goods is jewelry, which generally carries no specific model number and can vary significantly in quality, workmanship and price markup. True to their word, the TV retailers do sell at a discount. They just do not always sell at America's best price. Last July 3, for instance, HSC put on sale Regency's 20-channel police- and fire-band radio scanner, model MX 4000, for $286.25, a discount of roughly $350 off manufacturer's suggested list. The same day, Scanner World, an Albany, N.Y. mail-order house, was selling the MX 4000 for $179.99. Marconi Radio in Beverly, Mass. sold it recently for $199.95. Despite the honking and hype, however, the TV shopping show pitchmen almost always refrain from claiming their firms are offering the nation's best price on any item. Do they boast of a good price? Sure. A very good price? Probably. But the world's best price? Certainly no more often than hundreds of discount retailers in scores of cities nationwide. Says Roy Speer, co-founder of HSC: ''It would be impossible for us to claim that we are offering the lowest price on anything. Some guy in San Diego could be giving the item away! We do not claim to be infallible on pricing.'' On balance, says Howard Davidowitz, chairman of the New York City retail consulting firm bearing his name: ''I think the discount pricing on the TV shopping shows is really nothing extraordinary. It's on a par with discount pricing all over the country.'' For a box on shopping stocks, see page 82