Reader Ace commented in my previous post The Need for a Consumer Financial Protection Agency:
"I’m afraid that we have to live with the fact that people have been buying snake oil for centuries, and will certainly continue to do so."
That got me thinking. Why do people buy snake oil? I can understand why people sell snake oil but why do people buy it? The immediate answer would be lack of education. Obviously if people know it’s snake oil, they wouldn’t buy it. But I keep thinking there’s got to be more to it. After witnessing one such purchase first-hand, I developed a hypothesis: people buy snake oil because they expect magic.
I was at a running event recently. This event required that all participants go to an Expo to pick up the required bib on the day before the race. They do that instead of mailing the bibs because the Expo is an opportunity for exhibitors to sell stuff.
A booth at the Expo was selling a balance bracelet. This bracelet supposedly improves one’s balance. It does that instantly. They did live demos with real prospective customers. The demos are similar to what’s shown in this video:
The salesperson had the prospect extend her arms and stand on one foot. Then the salesperson pressed down on her extended arm. The prospect couldn’t hold the balance and the lifted foot had to touch the floor. After the salesperson gave the prospect a balance bracelet and repeated the test, the prospect could hold longer and against stronger force this time. The convinced customer bought the bracelet on the spot.
You can improve your balance by wearing a bracelet. As simple as that. That’s magic, isn’t it?
I propose an alternate test. Give the test subject the bracelet first without saying anything. Do the test. Remove the bracelet and test again. I bet the test subject will perform better the second time because she’s more prepared. Does that show having the bracelet hurts her balance?
If people expect magic, they will buy snake oil. I can think of another example: buy CDs issued by a bank in Antigua paying high interest. I’m sure you can think of other examples too.
The simplest way to guard against buying snake oil: don’t expect magic; take the slow road.
For more debunking of the balance bracelet magic, watch this video: