Birchbox sued for automatic subscription renewal violation

By Deanna Utroske contact

- Last updated on GMT

Birchbox sued for automatic subscription renewal violation
The class action suit was brought last week under California’s Automatic Purchase Renewal Statute.

That statute is in place to “to end the practice of ongoing charging of consumer credit or debit cards…without the consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service,”​ according to state code.

Mail-order beauty
The e-commerce beauty company sends sample-size cosmetics and personal care products to subscribing consumers by mail and sells full-size product online and in one New York City retail store as well. According to the company’s own data, Birchbox currently has over 800,000 active subscribers.

This discovery commerce experience is newly available to Canadians since Birchbox launched a dedicated country website​ there late last year. “Since our launch in 2010, we’ve had tens of thousands of customer inquiries regarding shipping to Canada. We’re so thrilled to bring Birchbox north of the boarder,” co-​founder Katia Beauchamp told the press when the site was announced.   

Business protocols
For businesses operating online and across state lines (or globally), the strictest e-commerce regulations may come from a single local but set the agenda for a company’s larger operations. That may be the shape of things to come for Birchbox and analogous personal care companies. 

“Plaintiff Tiffany Lapuebla alleges that when she bought a subscription in January 2013, Birchbox…failed to show her the renewal terms in a clear way​,” explains Michael Lipkin in an article for Law360.

Consumer loyalty and preference are not at issue here: “Whether the consumer wants continuing shipments or not, the company that’s committing the consumer to the auto-renewal is mandated by California law to give disclosures in a certain manner,”​ Lapuebla’s lawyer Abbas Kazerounian told Lipkin. “Whether the consumer wants it or not is irrelevant because it’s a strict liability statute.”

Growing pains
E-commerce accounts for only 10% of beauty sales​. The channel has a lot of growing to do as regulations get sorted out and consumers become fully acclimated to a digital economy.

Law suits like this one will come and go as brands innovate to give consumers services and products that make sense and dollars in these modern times.

Related topics: Digital, Business & Financial

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