LuLaRoe Class Action Lawsuit Challenges 100% Buyback Promise

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Last week, LuLaRoe was hit with a class action lawsuit accusing the company of failing to honor its 100 percent buyback and free shipping policies, causing consumers to be stuck footing the bill for a portion of the returns and shipping costs.

LuLaRoe, which was incorporated in May 2013, is clothing company that relies on individual consultants to sell shirts, dresses, skirts, dresses and leggings.

According to the LuLaRoe class action lawsuit, consultants must pay for a start-up inventory kit of clothing and promotional materials. These expenditures typically cost $5,000 to $8,000.

“As bait to lure consultants to sign up and/or purchase more inventory, in April 2017, LuLaRoe promised consultants they could cancel their agreements with LuLaRoe and be refunded 100% of the wholesale amount of inventory purchased, including shipping charges,” the LuLaRoe buyback class action lawsuit says. “The 100% refund had no conditions or exceptions attached,” and the company reportedly promised that the 100% buyback policy would never expire.

However, the clothing company changed its buyback policy unexpectedly on Sept. 13 so that it no longer provides free shipping or 100 percent refunds, the LuLaRoe class action lawsuit says. There are numerous exceptions to the refund policy, and the plaintiffs accuse LuLaRoe of cheating consultants out of thousands of dollars by implementing this policy change.

Plaintiffs Stella Lemberg, Jeni Laurence, Amandra Bluder and Carissa Stuckhart claim they were drawn in by LuLaRoe’s mission and marketing and decided to become LuLaRoe consultants. By doing so, they made the initial requisite inventory purchases and sold LuLaRoe products.

Although they were assured by LuLaRoe on multiple occasions that they could cancel their business and receive back 100 percent of the price at which they purchased their inventory, when they attempted to return the clothing items, LuLaRoe informed them that they would only be entitled to a refund of up to 90 percent. Additionally, LuLaRoe said that it would only accept returns of certain clothing and it would not pay shipping costs.

The plaintiffs seek to represent themselves and a Class of consumers in the U.S. who were contracted as LuLaRoe consultants at any time between April 1, 2017 and Sept. 13, 2017, and who either attempted to return inventory to LuLaRoe under the 100 percent Buyback program and who were not given a full refund and full shipping, or who purchased additional inventory from LuLaRoe during the Class Period and will now not receive a 100 percent refund and free shipping from LuLaRoe.

The LuLaRoe buyback promise class action lawsuit asserts violations of California’s Unfair Competition Law, California’s Unfair Advertising Law, unjust enrichment, breach of contract, breach of the covenant of good faith and fair dealing, and conversion.

The plaintiffs are represented by Amber L. Eck and Aaron M. Olsen of Haeggquist & Eck LLP and Peter S. Pearlman and Kelly M. Purcaro of Cohn Lifland Pearlman Herrmann & Knopf LLP.

The LuLaRoe Buyback Promise Class Action Lawsuit is Stella Lemberg, et al. v LuLaRoe LLC d/b/a LuLaRoe, et al., Case No. 5:17-cv-02102, in the U.S. District Court for the Central District of California.