So, what was the scam here? Obviously it didn't work. It says send no money, just the coupon, and if it doesn't work (which it won't) then you don't pay for it. How did they make any money off it? Was there a "processing fee" or something. Be nice to see the whole ad.
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Just like with any "or your money back" scams, the devil is in the details. Specifically the details of the promotion.
Usually there will be a lengthy contract to confuse and overload the victim, a perfectly legal and binding one, just so verbose that you look at it and mentally already signed it. Like ToS today.
Hidden within that contract is that you only get your money back if you do precisely what they say to prove the thing didn't work. For this hair growth hat I guess it would be something like "shave your head before first usage, then take daily photos with the date clearly visible on e.g. newspaper, do this for 30/60/90 days, mail us the images, let our experts verify no growth has taken place, and then you'll get your money back".
Basically enforcing a ridiculous, but perfectly legal requirement framework where they can fail you if you miss a step and claim that as per the contract you can't get your money back. Even with perfect following, their "expert opinion" verifying your claims that it didn't work (by e.g. pointing out that there was like two strands of hair that did grow).
Point is that the "or your money back" clause is essentially impossible to reach because of the requirements set in a contact that most won't read.
while the device didn't totally work, scenarios like this were common at the time where a hip new device just send us valid info and we'll send you the device easy! well, to actually return the devicez once receieved, was a hassle to most folks, so even if it didn't work when they sent it, they still kept it which meant they had to pay.
back to this device itself - I found it to be intriguing tech that merke patented in the 1920s that featured blue light and infrared to stimulate follicle growth. it may not work but that's an interesting approach that feels genuine. maybe it has an effect on some? almost feels worth exploring further than abandoning as just another device scam of the mail-in catalog era.
Light therapy can stimulate hair growth, but only for certain conditions and you need very bright light of one wavelength in the far red.
Or, go outside in the sun.
It's called the placebo effect. Remember Bob and Enzyte? Tell someone a pill will give them a boner and many will get a boner. By the time the FBI shut them down, they made $55M.

Waste a couple weeks to recognize it’s junk, then mail bulky item back at your own expense which must be received in 30 days with all original packaging, or send 3 payments of $…
Why would I want my hat to grow hair?
Hairy hats are in.
Here's a neat trick: since the shaved look down below is also in, you can:
- shave your pubes
- take some glue to your hat
- sprinkle shaven pubes into the glue
- ???
- Enjoy your newly stylish hat AND crotch