Retailer DTV Converter Confusion Reported

Consumer electronics retail clerks don’t have the skinny on DTV converter boxes, according to a survey from the federation of state Public Interest Research Groups.

Members of U.S. PIRG in 10 states sent “secret shoppers” to 132 outlets belonging to Best Buy, Circuit City, RadioShack, Target and Wal-Mart. According to the survey:

  • 81 percent of the sales staff didn’t know about converter boxes or gave out inaccurate information.
  • 27 percent provided incorrect information about the federal coupon program to subsidize the converters.
  • 42 percent had the DTV transition date wrong.
  • 20 percent tried to up-sell people to digital TVs or fancy converter boxes.

Stores in Arizona, California, Colorado, Illinois, Maryland, Massachusetts, North Carolina, Texas, Wisconsin and Virginia were surveyed.

“In Fort Collins, Colorado, a Target employee ‘almost sold’ one secret shopper an amplifying antenna, mistaking it for a converter box. This antenna would have been useless after the transition,” the PIRG survey stated. “In a Chicago RadioShack, a sales clerk claimed that converter boxes would run $300, but that one can receive a $125 voucher… A Boston RadioShack sales clerk went so far as to inform our shopper that there would be no coupon program.”

PIRG also checked to see if stores still stocked analog TVs, which by law must be labeled for the transition. Thirty-six percent of the stores had analog sets; 69 percent of them were “mislabeled or [had] hard to read tags,” PIRG said.

“To consumers, it does not matter whether sales clerks were intentionally misleading our secret shoppers to sell more expensive items, or if they were simply misinformed,” said U.S. PIRG staff attorney John Krieger. “The result is the same: consumers will pay too much for unneeded equipment or services.”

The U.S. PIRG survey was released Feb. 13 but carried out last fall before the converter box coupon program was activated. RadioShack followed release of the PIRG study with an item of its own saying 5,000 stores would have two types of converter boxes by next week, and be ready to accept coupons.

“We understand consumers often turn to the knowledgeable sales associates at their neighborhood RadioShack first to help them understand such technical issues and assist them in obtaining the best solutions for their individual needs,” stated Peter Whitsett, executive vice president and general merchandising manager for the RadioShack Corp. which had “devoted a tremendous amount of resources to training store employees.”

The RadioShack counterattack also noted that people could avoid the loss of TV signals by subscribing to cable or satellite or buying a digital set, rather than buying a converter box.

The boxes are designed to decode digital broadcast TV signals for analog-only TV sets, so they continue to function after analog transmissions end Feb. 17, 2009. The federal government funded a subsidy program for the converters when it set the analog deadline two years ago. The subsidy program allows households to request up to two $40 coupons good toward qualifying converters, of which there are 37 so far.

The program opened for requests Jan. 2. So far, 2.3 million households have requested 4.7 million coupons worth $189 million. The program is funded for up to $1.5 billion, including education and administration. The National Telecommunications and Information Administration, the agency in charge of the program, reports that the requests are coming in at a rate of around 21,000 a day, most for two coupons.

Texas leads in terms of states with the most applications—Texans have requested more than 406,000 coupons. Californians are next with more than 403,000; followed by Illinois, Michigan, Pennsylvania, Florida and Ohio, all with 220,000 to 230,000.

Among the 50 states (not counting U.S. territories), Wyoming had fewest, with requests for only 2,422 coupons. Washington, D.C., where the entire plot was hatched, had 7,250 requests.

The $1.5 billion in funding is divided into two disbursements. The first totaling $990 million will cover coupon requests on a first-come, first-serve basis. If those funds are exhausted before people stop requesting coupons, another $510 million will become available to subsidize only those households that rely exclusively on over-the-air television.

Estimates of such households vary substantially. The Consumer Electronics Association has pegged the number at 11 million. The Government Accountability Office says 20 million. The NAB’s DTV awareness posse recently said “more than 34 million households that rely on over-the-air television signals will be affected by the transition.”

Centris, a New York research firm that says over-the-air DTV coverage is patchy, recently said, “there are more than 40 million households currently receiving over-the-air analog signals.” (See MSTV Returns Fire Over Coverage Gap Claim.)