July 10, 2020

Sephora and the Retail Equation Collecting Data Without Permission Leads to Lawsuit

Sephora is allegedly being sued for sharing customer data without permission to determine if shoppers are fraudulently returning products according to a class action lawsuit taken out in Califronia that was posted today on news.bloomberglaw.com.

Here on Musings of a Muse we have long since spoke about people abusing the return policy at certain stores and even some of them who have revised their generous return policies due to this issue. We’ve also discussed how returns are tracked using the the Retail Equation!

Actually the fact they share info with the Retail Equation is where the lawsuit rises from. The Retail Equation keeps tracks of any returns you’re making at Sephora and and creates a risk score of sorts. If you’re doing too many returns it can potentially get you denied for returns in the future. The lawsuit alleges that the data collected and shared by Sephora with the Retail Equation violates the federal Fair Credit Reporting Act as well as the Unfair Competition Law of California.

This has been a long and heated debated with many makeup users across a variety of different communities like Reddit. Some people swear they’ve been from returns at Ulta and Sephora where as others have
never experienced such a problem.

I can’t say I’ve actually had this happen to me only because I’m not a huge returner. I find returning is a bit of a hassle. When I’ve attempted it via mail at Sephora it takes several weeks to get the money back and that only happens when I actually make a call in and say, “Hey, did you get my return and where’s my $$?” Doing it in store always gets me treated like a criminal. It could be a New York thing but sales rep look at me like I just broke into the Pentagon when I want to return something. I tend to toss stuff I don’t like into a bing and either donate it to my mom’s senior group or let my sister or my friends dig through it. I also try to educate myself fully when possible before purchasing something but that’s not always an option when you’re blogging beauty as you want to get the item as fast as possible and review it so, typically not a lot of research or reviews and swatches are available on the hottest and latest new item.

I’m not really a fan of the Retail Equation personally as I do think it is invasive however, I also think people can and do abuse return policies and ruin things for others who have valid reason to make a return.

Things like this could very likely lead companies from banning returns completely just like Europe. You buy it, it’s yours, keep it, no money back no exchange. That would be really crummy should that happen but considering the sheer amount of money department stores and retailers loose on returns daily that could happen in the future.

What do you think of this Sephora Lawsuit?

Thanks to Linda! She emailed me with this news today!

About the Muse

Isabella MuseIsabella is just an average everyday geeky girl who doesn’t blend her eyeshadow correctly, wears too much blush, and hopes she never finds her holy grail products because she likes the thrill of the chase so much. Her mission is to bring you super honest reviews on makeup, skincare, fragrance and all things beauty. She’s in no way an expert on the topic and she sure as hell isn’t a super model. But she’s passionate about makeup and is seeking like-minded individuals that like pina coladas, getting caught in the rain, and ones that enjoy spending hundreds of dollars at Sephora without feeling buyer’s remorse. If you’re that person feel free to reach out and leave a comment or follow me on Facebook, Instagram, Twitter, and Bloglovin‘.

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Comments

  • Stef

    I am a pretty big returner and have never had an issue returning stuff at any store. I’m surprised now! I don’t feel bad because usually I return an item for not living up to all it’s claims (which most don’t!) or if I can’t test it and the color comes out wrong for me. If there was more truth in advertising I wouldn’t be returning as much as I do. It should be illegal to make claims that are blatantly untrue. Or to fake reviews, change ingredients, etc… Every new product comes out with all these great claims- yet why are there so many products launched constantly if the last product was as good as they said? But if I like a product I will be very loyal and keep purchasing- until they discontinue it of course, which always seems to happen to products I really like!

    • Isabella Muse

      100% correct! Brands should stop making over the top claims about their products!

  • Hannah

    I am a big fan of returning things I’m not totally happy with. I always check the return policy before I buy something (Nordstrom and Costco are the best). After I had heard about this going on at Sephora I got all nervous that I would be banned from returns. But my understanding is that the people who do returns without receipts and/or return more than they keep over a certain period are who is banned. But then there are those stories on Reddit that people are making their first ever return to Sephora and get banned. So who knows. Ive noticed some people are happy to return things and others avoid it. My mom and I are both not keeping anything we aren’t pleased with. My father, brother, and twin sister on the other hand are more like you and just suck it up and keep the item.

  • Frozendiva

    I have only returned a handful of items over the years – a skincare product that I was unfortunately allergic to, a mysteriously melted lipstick, and last year a lipstick that was broken. Hadn’t opened the package and the tube was in pieces.

    There are many valid reasons for returns. Some folks do so because they can.

    I would return an eyeshadow palette that was shattered/broken product, something that gave me an allergic reaction, fragrance that leaked or did not work, that kind of stuff.

    Maybe some of the return policies are to discourage people from wanting to use X product, they buy it, use it once or twice and then return – like people buying clothing that they wear once and keep the tag on so they can take it back.

    • Eraser

      When I worked in retail, we had a few regulars in my department who did that. They’d buy a nice outfit on Friday and return it Monday, reeking of perfume and cigarette smoke.

  • Ryou

    Oof, yeah, that’s a big Yikes from me @ Sephora! First firing all part-timers on a phone call, now this? I doubt LVMH executives are struggling so badly that this sort of dicey practice is a necessity!

    I know some people who unfortunately have no choice but to return things regularly since they have MCAS and often have delayed allergic reaction to the most random things (which can lead to anaphylaxis!) — And while ingredients list exist, they’re not required to list what’s in fragrance, for example.

    I personally find it really disindigenous for stores to enact a return policy but then judge people who take advantage of them — Especially since I highly doubt they consider things like disabilities being a reason why returns are often a necessity (doesn’t help that disabled folx are being kept at poverty level on purpose!).

  • Robin

    If the cosmetics company offer samples we can purchase, then I would be okay to ban returns like the EU. I would rather pay a few dollars (2-5) for a range of foundations that may be my skin tone, then to return or donate the product. Companies would save a lot of money if they sold samples that people really want to try before they buy instead of offering the same free samples all the time. Some companies do this and I buy from them directly instead of Sephora/Ulta. Even before COVID, my shopping is online since I live in the country and there closest Sephora is an hour away; Ulta 1/2 hour.

    I’ve only returned two or three items due to allergy, dried up mascara, and damaged palette.

  • kjh

    It’s easy to see both sides of this issue. I virtually never return. If there’s a allergen in it, and the ingredients were listed incorrectly/ leaving the allergen out, back it goes. But not for color or things that don’t suit me. I give them away. Many to most b+m retail Places were not taking returns during Covid. I certainly get that. This is a tough one to call. As more and more moves online, there will be increasing dissatisfaction. Even if you can see it IRL, swatching may not be permitted. Especially as S is a division of LMVH, it is distinctly possible that S will adopt the no return policy.

  • Swoozy

    Eh, I don’t know that I’m worked up about this. I used to work retail and fraud/inventory loss really cut into business profits, which in turn impacted what I got paid or how many employees were allowed to work a shift. If a company is working as a client to identify potential fraud and the analyst group isn’t reselling the data, I’m okay with that.

    That said, I’m not a big returner unless a product gives me an allergic reaction, is off/spoiled, or doesn’t do what it said it would. If I picked the wrong color for me, I just use it or try to pass it along because it seems wasteful to return it if it will be trashed.

    • Eraser

      Same here. I’m probably (ahem) older than most of you and I grew up in the days when cosmetics and certain other goods were absolutely forbidden from returns. I always heard it was a state health regulation but I really don’t know. Although I’ve grown accustomed to online shopping, I’m still very careful and I can think of only one instance when I returned a beauty item because it was damaged. There are always people who take advantage and make things worse for everyone else, even other shoppers who eventually have to pay more because the merchant passes along the extra costs to the consumer. I worked in retail for a couple of years and saw some really bad behavior like returning clothes that reeked of smoke and various other things, but since they were very careful to keep the tags on, we had no choice. Once a clerk in the main office told me about a customer trying to return an empty jar of face cream! When the cosmetics clerk refused, she cried and made a huge fuss, and repeated that performance when the manager also refused, but then she demanded to see the store manager, made with the tears and eventually succeeded. Honestly… In any event, I won’t be surprised at all when all the stores go back to the old days and forbid returns. It will be a shame for the honest customers who have legitimate reasons for returning something, but the bad actors will have spoiled it for everyone.

  • Lacy

    I had no idea returns were tracked or that our info was shared! WOW

    I’m not afraid to return things if I’m not happy with them etc. Sometimes certain cosmetics are available online only and that’s the only way to try them. Or some foundations not carried in stores near me but then doesn’t match when I receive it. Or the color online is not at all the color in person for blushes/lipsticks. Or I have a reaction to skin care.

    So what all does this lawsuit mean and was our information share outside of the Retail Equation?

  • Carol

    Here’s my two cents: I work hard for my money and it certainly doesn’t grow on a tree in my backyard so yes I will return cosmetics if they don’t work for me. For one thing, cosmetics are grossly over priced versus what it actually costs to make. Secondly, purchasing over the internet is not something I typically do but nowadays it’s become the norm. Case in point: UD had their foundation on sale awhile ago and I thought I’d give it a try. I really studied the shades, even Googled swatches on numerous blogs and watched YT videos. Long story short, the color was way too dark even though I did all that research picking out a shade. I didn’t feel bad at all returning that because I’m not willing to virtually flush $25 down the toilet. I bought the foundation because it was on sale for $25 (regular $38). So yes, if a color doesn’t work for me, back it goes. I agree with the comment about the stores having return policies for a reason. If you have one we should be able to use it. Especially with cosmetics. My god, buying things over the Internet is almost impossible to see the “true” color so they should definitely be willing to accept a return. I’m just at the point in my life where I refuse to waste money. Back in the day, yeah, I would have thrown it in the trash. Not anymore. So yes, while Internet shopping is convenient it’s a double edged sword since you can’t see the item in person to see the color or smell the fragrance. Stores need to adjust to the times. People are shopping online more and more so this is going to be a constant problem from now on.

  • belinda colton

    Since covid has started where you can’t test products in sephora and ulta. I end up returning more because i have to test the colors out myself at home and didn’t like the way it looks on my skin.

  • JT

    As with most practices, a few people have now ruined returning for the majority. I rarely return cosmetics as it just doesn’t seem right to me after I purchased a cosmetic product. I lived in Europe for many years and don’t have a problem with their no return policy.

  • MDW

    I worked in retail cosmetics and saw what Eraser saw. Old ladies who spend their lives working on their tan buy into the promises of the wrinkle cream. When they do not get Brazilian facelift results, they would return the empty jar because the “doctor” who developed it promised a 100% money back guarantee. Whatever that means?

  • Lynn

    You absolutely can return most items in Europe, clothes, shoes, household items etc but when it comes to fragrance and cosmetics that you have used that is another matter. But it’s interesting to me. I’ve learned over the years from American bloggers/vloggers that they would return perfumes and cosmetics for many reasons, poor performance for example, but also, to my surprise, items are returned simply because they don’t like them. That really doesn’t happen here and that is regardless of consumer rights. I would never use a cosmetic or fragrance product then return it because I didn’t like it. It’s just not done. If you blind buy a fragrance it is your risk whether you like it or not! If I ordered a cosmetic product, tried it, and decided it didn’t suit me, again that was my choice. I would never think to return a used product anyway, regardless of whether that is allowed or not under consumer rights. The exception might be if the product has irritated the buyer, but even then I think that most people would just put that down to experience rather than returning it if it was used. Does that sound odd to our friends in the USA? I’ve noticed this difference in consumer culture many times.

    Warm Regards,

    Lynn

  • Lynn

    You absolutely can return most items in Europe, clothes, shoes, household items etc but when it comes to fragrance and cosmetics that you have used that is another matter. But it’s interesting to me. I’ve learned over the years from American bloggers/vloggers that they would return perfumes and cosmetics for many reasons, poor performance for example, but also, to my surprise, items are returned simply because they don’t like them. That really doesn’t happen here and that is regardless of consumer rights. I would never use a cosmetic or fragrance product then return it because I didn’t like it. It’s just not done. If you blind buy a fragrance it is your risk whether you like it or not! If I ordered a cosmetic product, tried it, and decided it didn’t suit me, again that was my choice. I would never think to return a used product anyway, regardless of whether that is allowed or not under consumer rights. The exception might be if the product has irritated the buyer, but even then I think that most people would just put that down to experience rather than returning it if it was used. If the product is damaged that’s another matter and it would be returned with no issue.

    Does that sound odd to our friends in the USA? I’ve noticed this difference in consumer culture many times.

    Warm Regards,

    Lynn

  • Cil

    This USA police is super generous. Here in Brazil, our equivalent of the FDA don’t allow returns of personal itens such as makeup and cosmetics. You bought it it is yours.

    Beyond people abuse, there are concerns for the safety of the item returned because only God knows what the owner did to it, but also environment concerns as these things can’t be sold again and will have to be discarded.

    I still have foundations I bought in the wrong shade (I mix when possible) and my Naked Heat around.

  • Cil

    I just want to add that you can return cosmetics and makeup in Brazil as long as you didn’t open the package and bought it online as established by our consumer rights. Everything is sold with a seal. So if you break the seal you can’t return the item no matter what.

  • Jennifer Bortolin

    There are many sides to this issue – brands that fudge their ingredients list so that you really don’t know what’s in the product that you could potentially (or really) be allergic to and then those who abuse the returns system.
    Here in Australia, it is very difficult to return a makeup product in most stores. Personally I have returned only a few, that were unopened and unused because I saw the shades (they were blushes) in ‘real’ light and found that they weren’t shades for me. As I had the receipt and the products were unused, the returns were accepted. This was to Sephora Australia.
    On the other hand, quite a few years ago now, I purchased a Chanel lipstick, very expensive and it broke – even though it was never put into my hand bag. I didn’t think at the time to return it and later on, when I mentioned this to the MUA at the Chanel counter, she told me I could have returned it.
    I think retailers in the current situation need to protect themselves from those who abuse the system, but brands also have to be honest as well.

  • Pat

    It is outrageous that a store would require a customer to show ID in order to make a return and then put the customer’s ID up for sale to The Retail Equation. When we show our ID to a business, we do not give that business the right to use our ID in way it seems fit. It’s not just Sephora. A ton of stores are involved.

    You are fortunate that you must have so many assets such that making a return becomes a nuisance. That is not the case for the vast majority of people, especially for high value returns. Where I live, I have never been confronted by a clerk in a store who mistreated me merely because I was making a legitimate return – thankfully. If that were to happen, I would never buy another item in that store. Customers don’t deserve that.

    • Isabella Muse

      There are indeed a ton of stores that ask for ID when doing a return. It seems silly to have a great return policy but still track a consumer’s returns. I’ve been mistreated as well doing a return. I mean, times I’ve done returns have felt like I was robbing a bank of something. That could account why I don’t bother doing them anymore 🙁