(NEWS CENTER) - NOW’s email accounts and Facebook pages have been blowing up - with hundreds of messages about a story that clearly struck a nerve. And had a bigger impact than even we were expecting.
LuLaRoe is a women's clothing company that relies on people -- mostly women -- to buy their merchandise, and sell it out of their own homes.
The company is known for its so-called "buttery soft" vibrant, printed leggings.
It's become a solution for many parents who need to make money, but also want to stay home with their kids.
But since September 13th - the company has come under fire, for abruptly changing a policy many of their consultants say left them in the dust - and in debt.
Here's what happened: the company's original policy was this – should you chose to resign, you could send back any unsold merchandise purchased from LuLaRoe for a 90% refund.
Then - in April 2017 - LuLaRoe announced a new waiver - a full, 100% refund for anyone resigning, and free shipping. They even told consultants that this new policy had "no expiration date."
In response - countless consultants handed in their resignation letters.
Then, on September 13 - the company abruptly canceled this new policy, and went back to the old 90% return.
The exact number affected is unknown, but judging from all the emails and social media posts, at the very least, this left hundreds of resigning consultants in limbo during the return process, unable to get the 100% refund they were promised.
NOW wants to be clear – there are also consultants speaking out in defense of LuLaRoe. They say the company doesn't owe anything to consultants walking away from the business.
This all started with a story about one of those consultants who is leaving this business without a profit, and instead with thousands in debt. That story was spread nationwide and triggered the massive response and spectrum of opinions.
Here are just some of your stories.
“Policies and contracts can change but those of us who entered with the 100 100 contract should have that honored.” -Lisa Newberry
“LuLaRoe has been a blessing for my family and hundreds of other families that I personally know. It has brought Women out of depression and given them a reason to get up in the morning. LuLaRoe has given my husband and I the opportunity to donate thousands and thousands of dollars to causes and families locally and has given us the opportunity to donate over $150k this summer to the National Down Syndrome Society. Watching Women walk out of a dressing room crying because they feel beautiful for the first time in years is why we sell LuLaRoe.” -Tiffany Ivanovsky: Magnolia, TX
“When the company announced their 100% buy back policy, we discussed leaving as we were expecting a 3rd child and didn't think we'd have the time or space to continue to work the business. We started the process of going out of business in July, so that we'd done and have the money from returning our inventory in time for my maternity leave. We're due any day- literally any day, and haven't heard a word from the company since receiving our inventory on 9/5. I know there are others in way worse positions than ourselves- we made substantial profit and sold down our inventory before sending back what wouldn't sell. However, $5k is still a lot of money any way you slice it and it sure would be helpful to have before this baby came and all the company says is ‘be patient.’” -Carly McWhirter: Nashville, TN
“It’s not easy money like so many think it will be, but with a good business plan it can be successful and you get out what you put into your business. If the people signing up were willing to put the work in they wouldn’t have the complaints they do, but they thought the clothes would sell themselves and that is not true of anything.” -Nic Parker
“Many of the reps who sign up for these companies are not properly trained, although they are led to believe, through all the hype, that they will make a lot of money. Those reps, who don't already possess some sort of understanding of how to be successful at an MLM business, end up floundering and never really get past the struggle phase that exists with most businesses, MLM or not. Although I feel for the LLR reps, LLR has been a good source of income for some of those ladies. But what I see happening with that company and others like it is that it's become saturated and there is a lot of competition with thousands of reps offering the same products.” -Dawn Campbell: Maryland
“At one point many consultants were leaving the business and marking down prices which in our contracts we aren't really supposed to do! So with that the owners choose to offer a waiver and were paying the shipping and giving 100% refund hoping to get the people to stop from selling cheap and hurting others sales. It was then realized that no one was sending it back right away they were still discounting items and then sending items back covered in rat feces or smelling of cigarette smoke. They had paid millions back and choose to end the waiver. Something they have a full right to do. The waiver was there in place out of the kindness of their hearts.” -Mindy Eckert
“In opening training we were told the company was now risk free as they were doing 100% refunds so if after that training or the first 90 days we felt it wasn't for us there was no risk in trying because we could turn around and return everything for 100% refund. I processed my refund and may have been one of the last people to receive prepaid shipping labels as I was emailed them in a manner of days before the change. Now I sit in anticipation to find out if I'll receive a 100% refund or 90%. I am so disappointed in the company and that they told the 75 of us in that training that I was risk free now with the new return policy. It was never stated anywhere that the policy was temporary. Thank you for writing your article. It makes me feel less alone.” -Hannah Henry
“Much like the article stated, the beginning was awesome. We were booking pop ups left and right and making great money for both working other jobs full time. Slowly sales started to slow down. With some life changes occurring, we both decided that we would walk away while things were some what good. I mean come on, we can get 100% back and they would pay for return labels. I sent them the required documents on Sunday September 10 and received no response. Sure enough Tuesday September 12, they revoked that policy and now would only be giving 90% back of what was spent in the lat year. Not per piece.” -Jenny Porisch
“This company has been nothing but a blessing for my family. We are a military family, and I have been very thankful to have a business that I can move with to each new place I live. What other job does that? The lady you interviewed complained about fighting for online sales, but that's one aspect of our business. A lot of retailers host pop-ups, do open houses, and even go to vendor events to connect with a local customer base. My sales are mostly online, and I don't feel I'm fighting for sales. Now that all the consultants that are going out of business are breaking policy and procedure and selling their products discounted it has slowed my sales, but I'm still making a decent income. They, not LuLaRoe, are hurting my business.” -Ashley Drysdale
“Lularoe DOES NOT CARE about all the consultants just the ones who make them a crap ton of money and those that can cruise qualify. I work a full time job, have a family and was doing lularoe on the side. This was the worst decision i have ever made, and i do hope they decide to give the old consultants that have put their paper work in before sept 13 their full refund, otherwise they will be hearing from quite a few lawyers. And again this is one of the worst companies ever.” -Jessica Luttrell
NOW reached out to LuLaRoe for answers. First, we called, but were sent to an email.
We received the exact same statement from the company for the second day in a row.
LuLaRoe provides a fair and generous path to Independent Fashion Retailers who want to exit the business. Last week, we simply reiterated a long-term written policy that each Retailer agreed to when he or she signed up. We had temporarily provided a waiver on some of the policy requirements between April and September 2017.
In addition, the company sent us some background info – but no direct answers to our questions.
- More than 80,000 Independent Fashion Retailers sell LuLaRoe. The vast majority are running great businesses and are happy with their experience -- as evidenced by the 20,000 Independent Fashion Retailers who attended our annual conference last summer. Those exiting the business is a very small percentage.
- LuLaRoe is not changing its written policy. The only change is that the company is ending a temporary waiver offered to Independent Fashion Retailers leaving the business since April. LuLaRoe is making this change now because it has addressed issues that led to the waiver.
- LuLaRoe grandfathered in Independent Fashion Retailers exiting the business who either received an email confirmation from LuLaRoe of a refund amount due to them, or received valid return shipping labels from LuLaRoe. These Retailers will not be impacted by this announcement.
- Starting and maintaining a business has inherent risk. By agreeing to buy back product from Independent Fashion Retailers who want to exit the business at 90 percent of wholesale value, LuLaRoe is helping mitigate the vast majority of that risk for Independent Fashion Retailers.
- In order for LuLaRoe to continue to administer this benefit to Independent Fashion Retailers, we need to ensure that product returned to us as part of this policy is provided in resalable condition. In recent months, LuLaRoe has seen rampant abuse of the policy, with Retailers returning product in extremely poor condition.
To discuss more details on people’s experiences and to get a professional opinion on the situation, NEWS CENTER Now held a LIVE panel with Attorney General Janet Mills, local attorney Ron Schneider, and both a happy LuLaRoe customer and one who is “GOOB” (going out of business). You can watch that panel here.