Furious customers are calling a hot lingerie start-up a 'scam' because of its sales model
Its popularity has sent sales surging from $1.1 million in 2012 to $16.2 million in 2014, according to the company's data. Inc. named Adore Me its No. 2 retail company in 2015. At Business Insider, we've labeled it a firm that is a clear rival to Victoria's Secret, largely for including plus-size models in its repertoire. Business and brand development director Sharon Klapka said it was out to "slay" the Victoria's Secret.
Now, the company is facing backlash from its customers because of its subscription model that locks buyers into monthly payments with what consumers say is without clear disclosure of that fact.
At the Better Business Bureau, the company has an F rating and has racked up more than 560 complaints. The issue for many is that they were billed a monthly subscription after ordering bras and panties from the site and had difficulty canceling or getting refunds.
This is because of a sales model that's used by a number of startup fashion companies. Adore Me signs its customers up to a monthly subscription, and they're billed automatically to their credit card whether they pick out clothes they want or not. The complaints about this range from the fact that it's not evident that they're being signed up, to the fact that cancelling out is an infuriating and difficult task.
The same kind of setup landed Kate Hudson's athletic-wear company, Fabletics, and its parent company, JustFab, in hot water recently. JustFab, which is also home to other fashion retailers, including the Kardashian-affiliated ShoeDazzle, operates on a membership basis as well. The company infamously makes canceling an arduous process.
Adore Me, however, says it is transparent about the membership model, and that it sends e-mail, SMS, and push notifications to remind customers that they need to shop or opt out each month. It also offers refunds to those who ask for them for the most recent month's bill. The company says it has made improvements to its website's design to make that refund request an easier process.
But there are some very obvious pitfalls in the customer's experience that make it easy to see where the complaints come from.
Once a shopper is ready to purchase her lingerie, the website gives her the option to become a VIP member or to pay as she goes. Paying as you go makes the lingerie full price ($49.95) versus an alluring, much cheaper option - $24.95 for the first set.
However, the default mode is the VIP membership. Here's what a computer screen looks like - Pay As You Go is obvious, but many women likely want the $24.95 set - and perhaps they tell themselves that they'll cancel as soon as possible.
The company clearly discloses the rules: it is, indeed, a membership. Members have the opportunity to "shop" or "skip" by the fifth of every month - otherwise they will be charged $39.95.
The company doesn't say upfront that members can cancel whenever, but it does say that it will remind consumers that they'll need to shop or skip to avoid getting charged.
But should these emails get passed over or get filtered out as a promotion (which they do in Google) - or get lost with the other emails the company sends - shoppers might be surprised to learn they've been charged $39.95. The emails are generally titled "your showroom is ready" or "about your showroom."
The reminder to skip is at the bottom of the emails.
CEO Morgan Hermand-Waiche told Business Insider that Adore Me really tries to let members know that it's nearing their time to shop or skip.
"Email is our first mean of communication with our customer and we have a strong CRM team that works on making sure that deliverability stays strong. Right now, our deliverability is at 99.9% and we make sure our database is clean and engaged - we never buy email lists and we only engage with Adore Me customers," he explained." On top of that, we also send SMS and push notifications to remind our customers to shop or skip the month - so even the 0.01% that don't get our emails because they are filtered as promotional or spam can get the reminder."
He also notes that consumers receive a pamphlet explaining how the VIP membership works with their first purchase, and that VIPs get ample perks - free shipping, $10 off, and a free sixth set of lingerie.
Once the fifth of month has passed, shoppers receive "store credit," permitting them to shop at Adore Me at any time. Adore Me offers refunds - but for only one month of credits. Should consumers unwittingly be charged month after month, they only can get one month's worth of funds back.
The remaining months credits can be used to shop, meaning not all is lost, but they expire in a year, according to online reviews.
None of this has mitigated the fury of consumers who want all of their money back and didn't want to be billed repeatedly in the first place. (Some consumers swear that they ended up with store credit and couldn't purchase anything - one commenter on The Lingerie Addict alleges she was able to cancel her VIP membership but had $200 in credit, all of which disappeared upon cancellation.)
The credit and refund policy has some customers reeling. Many of the hundreds of complaints with the Better Business Bureau allege that it's extremely difficult to get out of billing cycles and to get refunds.
And, despite the seemingly clear instructions, consumers expressed how they felt duped into signing up for the VIP membership.
The most recent user review on the Better Business Bureau reads as follows:
"Buyer beware! This online retailer *********** offers lingerie at seemingly reduced costs by being a VIP member. What they don't make clear is that you must place orders for lingerie EVERY MONTH or you are charged $39.95. They store your cc information and don't allow you to delete it. To refute a charge and receive credit they make you jump through extensive hoops requiring you wait for refund to post then log back in and remove your VIP membership. Its never made entirely clear if unsubscribing means you won't be charged again. Whole experience has been terrible and I believe the advertising is misleading consumers about what it means to be a member. Caution to all those considering ordering from this online retailer, you may be signing your life away and not know it!"
Adore Me has faced sharp criticism in the past, and has managed to grow its sales despite that. In 2013, Cora Harrington of The Lingerie Addict alleged that the company's marketing of its "designer lingerie" was misleading because the company was only reselling products made by other manufacturers.
The company has acknowledged that it has "a few partners amongst some of the finest brands across the U.S. Asia and Europe" but that it also does design and make its own products.
And Hermand-Waiche says it's extremely easy to cancel the membership, and within two to three business days members will receive a link to help them cancel, and that after 30 days, if customers call customer service, they could still get refunded.
He attests that the complaints pale in comparison to the positive reviews.
"Keep in mind that in 2015, Adore Me counted over 1 million purchases, which means that these 560 BBB complaints account for approximately 0.0005% of all transactions of the Adore Me website. Needless to say this is an extremely low level of dissatisfaction. In fact, Adore Me has very high satisfaction levels on other sites," pointing to Site Jabber, iTunes, and Reseller Ratings.
There are still furious commenters who say they have lost money and who had poor customer service experiences. Adore Me responds to these irate customers, saying that it's "totally unacceptable and we assure you that we are going to investigate this issue."
Ultimately, Adore Me's problems shed light on the confusing nature of subscription services and the importance of ensuring customer service if someone is billed repeatedly.
"Any recurring billing scheme is problematic from a customer service standpoint unless you err on the side of the customer even when you may not be legally obligated to," Sucharita Mulpuru of consulting firm Forrester Research said to Business Insider in an email this past fall, at the time of the Fabletics scandal.
Certainly there's room for improvement on that front, not just at Adore Me.
"I think that the membership and subscription shipping concepts are extremely innovative and disruptive, and used by companies such as Amazon, Dollar Shave Club, Birchbox and Adore Me. But sometime there are shoppers who aren't familiar with subscription-based services and memberships and as a result are unsatisfied with their experience," Hermand-Waiche wrote to Business Insider.