The money will go toward the legal costs accumulated during the course of Washington state attorney general Robert Ferguson’s investigation of Julep. The brand also has arranged to donate products worth $250,000 at wholesale to women’s organizations and homeless shelters, and had previously decided to compensate consumers impacted by cancelation impediments a total of $1.5 million.
According to a statement from the attorney general, his office caught wind of issues with Julep’s Maven program, which is priced at $24.99 monthly for deliveries of full-size nail lacquer items and other beauty merchandise, upon a number of subscribers lodging complaints that they were billed after they ended subscriptions. The attorney general reports the exact number of consumers affected is unclear.
Of particular concern to the attorney general’s office were so-called Welcome Boxes marketed as free. It found Julep didn’t properly divulge to consumers signing up for the Welcome Boxes that they were enrolling in subscription plans. The consumers supplied credit card or debit card information for shipping and taxes. Subscription and cancellation terms were available in web checkout pages, but the attorney general argued they were placed online in such a way that made them unlikely to be viewed.
You May Also Like
Julep attributes the cancellation problems to growing pains. The brand detailed it experienced unprecedented call volumes in the summer of 2014 and didn’t have the customer-service capacity to answer all the calls. At the same time, it was coping with a change in fulfillment practices that led to shipping delays. Combined, the operational challenges may have left some customers dissatisfied with their Julep experiences.
In response to the operational hiccups during the period of heavy call volume, Julep asserts it refunded consumers who suffered from cancellation troubles, although a spokesman for the attorney general said, “It’s not clear to us when those refunds were made.” In addition, the brand disclosed it increased its customer service team by 50 percent, implemented extended call hours and hired skilled employees to improve processing.
“We took immediate action to solve these operational challenges because I am absolutely dedicated to delighting our customers,” said Jane Park, chief executive officer and founder of Julep, continuing, “I am so proud of our amazing and passionate customer service team — those of you who have called us have probably experienced firsthand their exceptional commitment to helping our Mavens resolve their questions and concerns.”
Ferguson labeled Julep’s handling of subscription cancelations “deceptive business practices,” a characterization Julep strongly contests. In his statement, Ferguson said, “It is maddening for consumers to receive products they don’t want but are charged for. That’s a deceptive way to run a business, and I won’t allow a company to get away with it.”
Julep emphasized it has admitted to no wrongdoing. “Julep has never engaged in deceptive marketing,” stressed Park. “We have always been clear about the terms and benefits of our Maven subscription program, which is beloved by thousands of women across the country. Unlike passive subscriptions, at Julep we actively invite our Mavens to engage with us monthly, sending multiple communications prior to any charge.”
On top of covering the legal costs, the settlement between Julep and the attorney general ensures Maven subscribers will be well-informed about what they are getting themselves into. The consent decree, for example, stipulates Julep must include billing summaries at the conclusion of orders itemizing each product ordered and its price, publish and honor refund policies, send consumers e-mail invoices for the goods they buy, and cancel a consumer’s purchases within one business day of receiving a consumer’s cancellation. If Julep fails to adhere to the consent decree in the future, it will be subject to a $250,000 penalty.
Julep is not the only beauty company that has been under the legal microscope for cancellation complications. A class-action lawsuit filed in 2014 accused infomercial giant Guthy-Renker of ignoring cancellation requests and persistently billing customers’ credit cards despite those requests.
Kate Murphy, director of public relations and communications for Julep, underscored Maven subscriptions were easy to terminate via phone and e-mail before the settlement. She said, “The settlement does not require any changes to Julep’s already clear and customer friendly communications. We settled this case in good faith, and as an effort to move on with releasing the most innovative products in beauty.”