smart spending

5 things your junk mail says about you

If your junk mail could talk ...
If your junk mail could talk ...

If horoscopes and tea leaves aren't doing the trick, try reading your junk mail. Yes, that daily stack of coupons and catalogs says a lot about where you've been and where advertisers think you're going.

Credit card offers tend to find their way to people who are good at paying bills, for example. Dog owners see lots of pet store catalogs. And if you like to shop, there's a good chance your favorite merchants (and their affiliates) have sent you their latest offers.

All of that targeted mail comes from a mammoth market-by-mail industry that generated almost $2 trillion in sales in 2011, according to its trade group, the Direct Marketing Association. The industry, which employs 1.3 million people, specializes in putting merchants in front of their target audience.

Direct mail profiles certainly aren't perfect, especially when it comes to assessing your financial situation, says Bill Hauser, a marketing professor at the University of Akron in Ohio. But it still pays to know how they're created.

Understanding your junk mail can make you a smarter consumer. It can help you shop, protect your credit history and keep some of those letters from reaching your mailbox.

Here are five things your mail could be saying.

You like shopping at home
You like shopping at home

If your mailbox is stuffed with catalogs, chances are you've recently purchased a few things from home.

And you're not alone.

Online shopping has blossomed over the past decade, with e-commerce making up a steadily increasing proportion of overall retail sales, according to the U.S. Census. And every time you buy at home -- whether you're shopping online, buying from catalogs or purchasing something after a particularly convincing TV spot -- you can bet that the retailer has added you to its mailing list.

That contact information can get passed around to other marketers. "(They won't) know exactly what you bought, but they know what category" it falls into, such as shoes or women's clothing, says Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association.

They may even have a general idea of how much you spent, Cerasale says.

You have good credit (or at least you seem like you do)
You have good credit (or at least you seem like you do)

If you're viewed as a reliable borrower, you'll know it. Credit card companies frequently send offers to people who appear to have good credit.

Those "pre-qualified" and "preapproval" letters will make you feel like they've pulled back the velvet rope just for you, even though you're not really in an exclusive club. You'll still need to apply like everyone else. Those letters just mean there's a marketer out there who thinks you have a good enough credit score to qualify.

The sender doesn't know the real you, Hauser says. "There are thousands of different databases out there, not just one." You may look like a decent credit risk, Hauser says, whether you actually are or not.

And issuers aren't examining individual histories, Hauser says. More likely, they are buying lists of consumers who meet certain criteria.

It's also possible you're getting an offer because a marketer estimated your income based on other factors, such as your address, favorite stores or affinity cards, Cerasale says.

You're piling on debt
You're piling on debt

If you consistently get offers for debt relief, debt consolidation, debt reorganization and bankruptcy services, you're probably on a "bad credit" list, Hauser says.

And the information may not be a true reflection of your finances.

While some data miners get information from property records and public archives, others might simply use your debt levels or card balances (whether you're paying them off or not), as a screening tool, Hauser says.

"And this doesn't mean you have bad credit," he says. "They could be assuming that if you owe this much on your car and have this much on your cards, you need help."

But if you keep receiving mailings aimed at customers with bad credit, it might be a signal that it's time to pull your credit report and make sure everything is OK.

"There are still many, many people out there who have no idea what their credit scores are or who don't know they can check to see if there are any problems with them," Hauser says.

You have a life beyond the 9-to-5
You have a life beyond the 9-to-5

Taken up crocheting? Building model trains? Painting miniature pet portraits on old bread bags? That little pastime of yours may not be so secret after all.

Marketers are always looking for details about consumers, and at one point or another, you may have told them. For example, you may have signed up for a magazine that caters to a particular interest. That type of target marketing -- based on subscriptions -- has "been around for a long, long time," Cerasale says.

Here are a few ways to cut down on direct mail.

  • When you buy something online, select the option to limit the retailer's ability to share your information.
  • Cancel catalogs you don't want, and use DMAChoice.org to remove your name from many commercial mailing lists.
  • Opt out of allowing vendors (such as banks, card issuers or utilities) to share your information.
  • Eliminate prescreened credit offers by registering at OptOutPrescreen.com or at (888) 567-8688.
You live in a certain kind of neighborhood
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Are you receiving fliers for investment or retirement advice? How about invitations to seminars?

It's likely marketers think you're old enough to be concerned about retirement. Or they believe you may have accumulated a bit of money.

"Length of credit history is one of the elements that goes into your credit score," says Ron Jacobs, president of communications firm Jacobs & Clevenger. "So if you have a 30-year credit history, you're probably getting close to retirement age."

In some cases, the type of junk mail you get "tends to be geographic," Cerasale says. "A lot of it has to do with where you live, as to whether they think you have some assets."

Those catalogs for luxury goods, for example, could be a commentary on your neighbors' finances rather than your own bank account.

Your address, "based on census track data, gives some idea of the socioeconomic background of the neighborhood," says Cerasale. "Some of the advertisements and offers you receive are based on where you live."

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What your mail says about you.

Forget about horoscopes and tea leaves, if you really want to get an accurate reading of yourself, check out your mail. The industry calls it direct mail, most of the rest of us call it junk mail.

If you get plenty of catalogs in the mail, it is likely because you have made purchases from home, including online. And if you're regarded as a reliable borrower at some level, the offers coming to you include those from credit card companies. Don't be fooled by the words pre-qualified, or pre-approved ... you'll still have to apply, just like everyone else.

Getting offers for debt relief, or reorganization? Then you might be on a list somewhere as having bad credit. Might be time to check your credit report. Too much junk mail? Look for the variety of means you can opt out, such as at DMA-choice-dot-org and OptOut-prescreen-dot-com.

 

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