Hell hath no fury like a woman scorned.
Perhaps LuLaRoe, denizen of the legging industry and reigning queen of the multi-level-marketing craze, should have remembered this.
The retailer, which sells its leggings and assorted clothing to millions of women via authorized consultants in members-only Facebook groups, suddenly eliminated its popular 100 percent buy-back guarantee policy, AlltheMoms.com has learned.
LuLaRoe abruptly reverted to its original buy-back program, seemingly overnight. That now-in-effect policy places strict stipulations on returning merchandise.
And thousands of women, who signed up to be consultants under the 100 percent return guarantee, are taking to the Internet, claiming the company scammed them out of tens of thousands of dollars.
The 100 percent buy-back policy worked like this:
Anyone who signed up to be a LuLaRoe consultant was able to end their business, return all their inventory, and receive 100 percent of their outstanding investment back in the form of a refund check.
But no more. And many consultants claim they had already started the process of cancelling when LuLaRoe pulled the rug out from underneath them.
The new policy (which is actually the original policy) leaves consultants on the hook in five key areas:
- The company says it will only reimburse consultants for 90 percent of their outstanding inventory (not 100 percent, as previously stated in communications from the company.)
- Returned merchandise has to be in “original packaging” and “resaleable” condition. Consultants remove the clothes from the bags they came in to display them for sale, and claim this leaves them at the mercy of LuLaRoe.
- Consultants can only return clothing they bought directly from LuLaRoe. Many consultants buy clothing from each other to round out their inventory.
- Consultants must pay for shipping and handling of all merchandise they are returning back to the parent company.
- Only merchandise purchased in the last 12 months is eligible for return.
LuLaRoe rose to fame by promising millions of GenX and Millennial women — many of whom are busy moms — that they could earn extra money for their household, while maintaining a flexible enough schedule to participate in their children’s activities.
Their marketing pushes touchy-feely, “we are a team” mantras, encouraging women to support and help one another.
Now, consultants say they’ve been deliberately misled. And that LuLaRoe is essentially bankrupting them.
In sent a statement to AlltheMoms.com, the company said:
“LuLaRoe provides a fair and generous path to Independent Fashion Retailers who want to exit the business. We are simply reiterating a long-term written policy that each Retailer agrees to when he or she signs up.
“The only change is that the company is ending a temporary waiver offered to Independent Fashion Retailers leaving the business since April.”
The company also said it accounted for Independent Fashion retailers exiting the business who received email confirmations of a refund approval or valid return shipping labels from LuLaRoe. “These retailers will not be impacted by this announcement,” the statement said.
However, the company apparently held a call with its “mentors” (or top team leaders) Wednesday night, and notes from that call were leaked, and are currently circulating on Facebook.
Among other things, the company allegedly said that revising its return policy was necessary because some consultants were sending unused inventory back in horrible shape, including covered in “rat feces,” or smelling of cigarette smoke.
They also noted that too many consultants were returning clothes for other consultants and having aggressive “Going out of business sales” that were flooding the market with discounted merchandise.
This is not the first time LuLaRoes’ business practices have been called into question. A lawsuit alleges improper taxation practices, complaints about shoddy workmanship and defective leggings are rampant, and there are ongoing complaints from consultants who said the company misled them about how much money they could make.
In fact, last month Scary Mommy published an in-depth article that cited a recent Federal Trade Commission report that indicated that 99 percent of women who sign up to be a multi-level-marketing consultant actually LOSE money.
And that’s why LuLaRoe’s latest business policy has many consultants so infuriated.
One former consultant, who asked not to be identified because she’s waiting for her refund check from LuLaRoe, said the company is holding more than $13,000 in her inventory. She hopes she will get the full 100 percent buy-back as originally promised, but isn’t sure.
“We were encouraged to keep buying fresh inventory because it would help our sales,” she told AlltheMoms.com. “There was no risk because we’d get 100 percent back.
“Everything I made I put right back into my inventory.”
Now, she said, “we’re all terrified they are going to file bankruptcy or something.”
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