As a kid, I grew up reading classified ads in the back of old science and mechanics magazines. One of the most prevalent ads promised untold wealth by simply addressing and stuffing envelopes.

So what's the deal? Does anyone really get rich? Is it worth the $49.95 to get more information? Actually, the ads said the info was free. After a few letters to try and hook me, they started to reel me in by asking for fifty bucks, "in order to keep the information out of the hands of the merely curious." (Yeah, right!)

Unless you're a consumer watchdog, a TV reporter, the author of a book on scams, or other person who is willing to pay $50 to find out about the details of the scam (so that you can warn others about it), don't fall for this dodge. Did you ever stop to think why a business that is willing to pay $5000 per month to an unknown envelope stuffer doesn't just go out and hire their own helper at minimum wage and keep the difference? Or hire a person working on a straight commission basis to handle the envelope stuffing and addressing and receive a percentage of the proceeds?

In a sense, the latter is what happens. The victim buys a mail order plan, perhaps complete with camera-ready ad copy and brochures, to mail back to other people that express interest in a certain product. The plan states that the victim will make money if only 10% of the people who see the ad reply back. True, that kind of a return would generate a nice cash flow. But a ten percent response rate on a classified ad? Dream on! A half of one percent response rate is considered excellent for a general purpose direct mail ad. A ten percent response is unheard of. If the victim doesn't know or care enough to think about the numbers involved, he pays $50 for the complete plan and eagerly watches the mailbox until it arrives. He opens the package only to discover that the product being sold is ...

... a plan on how to make money stuffing envelopes! But the $50 plan fee is not the end of his expenses. He must also place and pay for the very classified ad that he responded to in the first place. He's also responsible for the cost of postage and envelopes. Sometimes he even has to buy the special advertising circulars from the supplier! Not to mention the time involved in addressing and stuffing envelopes. Even affixing postage stamps to thousands of envelopes gets old quickly.

The potential new victim who sees the original victim's ad in the newspaper responds back. He/she is asked to remit a stamp, a dollar, or some other amount to defray postage expenses. (Actually, the publisher of the plan recommends that the victim -- who paid $50 for the course and now wants to recoup his/her investment -- pay for all costs of answering requests by mail.) The circular that is stuffed into the envelope by the original victim is one that has the publisher's name and address on it. It is an ad sheet for the $50 money-making course -- the same one the victim purchased! The victim puts his code number (so that the publisher knows who to send the $2 commission to) on the circular, and:

• If the new victim sends in $50 to the publisher; and

• If the publisher sees the code number and remembers (or is honest enough) to send the original victim his/her $2 commission; and

• If the original victim has folded, stuffed, stamped, addressed, and mailed 100,000 envelopes that week (at current postage rates, that's $33,000!); and

• If 499 other people (half of one one percent, about an average response for a direct mail campaign) that week decide to send in $50 to the publisher;

• Then the original victim will have grossed $1000 that week. Unfortunately, the original victim is out $32,500 in postage costs and his/her labor. (The amount lost would be lesser if the original victim had a bulk mailing permit from the post office, but it would still result in a loss.)

Catch the drift? The only one who gets rich in this plan is the publisher of the course on how to make money stuffing envelopes. The person who just paid $50 is eager to get back some of his/her investment, so he/she may actually try placing an ad or two. After stuffing several hundred envelopes and not getting back the promised thousands of dollars, he or she will no doubt get discouraged and quit the program.

Is it legal? The U.S. Postal Service says no. I agree. The original publisher must have known the percentages and designed the program to make money for him and no one else. The suckers do all the work. The publisher merely has to send out the actual report, pay a commission or rebate back to the salesman (first victim) and keep the rest of the proceeds.

There is obviously no shortage of unsuspecting participants, since this scam has been around for years. My advice: put that $50 in the bank where it will earn interest for you. At least you'll be making money with your investment!

Additional resources:

• Don't Pay Money To Work At Home (Better Business Bureau)
• Internet Fraud Complaint Center (FBI)
• Administrative Law Judge Rules Against Envelope Stuffing Scheme (U.S. Postal Service)

Brett McCarron is an avid consumer protection advocate. He has studied the methods of con artists and rip-offs and has included some of this research in the book The Gambling Magician, published in 1976 by D. Robbins & Co., New York, NY. McCarron has authored several books, and dozens of magazine articles on the subjects of magic, gambling, music, and computers.