Kardashian Kard Debacle: Exhibit A for Why You Should Be Wary of Celeb-Endorsed Products

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The fee-laden prepaid debit card endorsed by the Kardashian sisters was universally panned as a ripoff and a joke when it came out in November. A consumer would have been hit with well over $100 in fees if using the card for a year. Now that the “Kard” has been killed off and the inevitable lawsuits have been filed, the situation is only getting uglier.

The Fresno Bee reported last week that the company that created the Kardashian Kard is suing the reality TV sisters for $75 million.

The COO of the debit-card company, Revenue Resource Group, explains why it went into business with Kim, Khloe, and Kourtney in the first place:

“The reason you go to a celebrity is to gain the greatest amount of exposure for your product”

And, despite that personal finance writers were outraged by the card’s fine print and fees, and despite that the Connecticut District Attorney threatened legal action due to the product’s predatory terms, the company’s COO defended the card thusly:

“The fees are not egregious … They were average to low.”

Meanwhile, CNNMoney talked to Nathan Miller, a lawyer representing the debit card company suing the Kardashians, who said:

“With the Kardashians’ star power, the amount of cards they would have sold would have been off the chart.”

In addition to the substantial loss in expected revenues that disappeared when the Kardashians bailed, these details have emerged regarding the card’s glitzy launch party in New York City:

For the launch party, Miller said Revenue Resource Group paid more than $5,000 for Khloe to fly first-class to the party and $7,000 for someone to do the sisters’ hair and makeup — negotiated down after Kim originally asked her hair stylist to be flown to the party for a total price tag of $12,000.

The company also paid $1,900 for an Escalade to drive them around, $6,360 for bottle service at the launch party, and covered the cost of their hotel rooms. The total cost of the party added up to more than $65,000, Miller said.

These two entities seem like a match made in heaven (or at least California): My guess is that the Kardashians would likewise defend these expenses as “not egregious.”

To recap, what have we learned from this sordid affair? Lessons that consumers should have learned long ago:

*Celebrity endorsements bring attention to products.

*Celebrity endorsements help sell products.

*Celebrity endorsements have no bearing whatsoever on whether a product is good or worthwhile.

I’d argue that consumers should actually view a product endorsed by a celebrity with an above-average dose of skepticism—especially when the celeb in question has no credibility in the product’s field. Or are you, in fact, eager to listen to the personal finance insights of someone requesting $12K to get her hair done?

As Cheapskate Next Door author Jeff Yeager explained in a Q&A, the savviest and most frugal consumers aren’t impressed by popular brand names, and they’re especially wary of products with expensive marketing pushes behind them:

In fact, they’re often suspicious of heavily advertised products. They recognize that the cost of all that advertising is ultimately built into the price paid by consumers. They also reason – and I think they’re on to something – that, if a product is so good, so necessary, such a good value, why does a company need to spend so much time and money telling people to buy it?

By extension, why would a company need to spend so much time and money entering into a business arrangement with celebs along the lines of the Kardashian sisters?

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