Julep, a popular beauty subscription company, has been accused and ultimately fined for taking part in deceptive marketing practices. As a company, one should take their customers into account and make sure that they are aware of what they are signing up for. They did the wrong thing by misleading their customers into enrolling in their subscription plan without proper disclosure of the terms. Deceptive marketing is unethical because a business should treat their customers as part of their company and not just as their means for profit.
Deceptive marketing is when any form of advertising r promotion misrepresents the nature of a product or service. These types of techniques can include bait and switch pricing and promotional offers with exaggerated features. This practice is used for the intention of influencing buyers to go with the product or service with these false or misleading claims (False Advertising). . It is something that we are beginning to see more of but at what cost to the customer. Julep is a Seattle based cosmetics company that offers a variety of beauty products through their website and various retail locations like Nordstrom and Ulta.
Jane Park, the CEO and founder, started the company in 2007 with the intention of delivering beauty products to all types of women. In 2011, the company started the Julep Maven program. One signs up to the service and subscribers, or “Mavens”, receive a beauty box in the mail in exchange for a monthly fee (About Julep). The most common plans are for $19. 99 to 24. 99$ including shipping. Many women seemed to enjoy the service but around 2012, women started having problems with the website. In this case, Julep were using partially correct statements to attract customers to their website.
Julep offers a free welcome box of products to new customers but they have to input their credit or debit card information to pay for shipping and handling. They did not properly disclose, however, that when one signed up for the free maven box, that they were signing up for the $24. 99 monthly subscription plan as well. Customers were being charged without their knowledge of it. They only noticed the charges until after their card was charged and they received their bank statements (King). About 55,000 customers were affected negatively by the company between 2012 and 2015.
This also aused the company to earn an Frating, according to the Better Business Bureau. . For deceptive marketing to be proven, “the deception has either resulted in or is likely to result in injury to the plaintiff” (False Advertising). This caused harm to the customer in terms of money. Had Julep not made the claim, then they would have not been at a loss. Edward Freeman states that business and those that are in charge need to create value for everyone having a stake in that business (Freeman 39). In other words, everyone needs to be taken into account and it’s not just about simply making profits.
Julep was only focusing on the business that they would get out of basically fooling their customers with the promise of this free box. They were placing greater interest on the business itself and the money that it was making when it should be that “no stakeholder interest is viable in isolation of the other stakeholders” (Freeman 40). (Explain more of how Julep used customers as just profit) Bringing into account Freemans argument from character, it poses the question of how would Julep like to be seen? This argument basically states that a company should act in the way that they ant to be portrayed (Freeman 51).
If they want to keep their customers loyal then they should treat them with fairness. Julep was not thinking about their character when they were causing their customers such a difficult time. They did not disclose significant issues to their customers and that’s what makes it so unfair and unethical of them. Freeman states that “By making ethics explicit and building it into the basic way we think about business, we avoid a situation of bad faith and self deception” (Freeman 51). Clearly Julep was not thinking about this when they were charging their customers for something hat they did not want to sign up for.
A customer wants to be able to trust the companies that they do business with. Using deceptive marketing damages the image customers have of these companies. They purposely did not disclose something that the customer should know and so many customers lost that idea that the company was about do Companies need to know that customers are a major part of their success. I believe that the ethical thing to do would be to properly show what someone is signing up for without them having to read the “fine print”. There is no need to be misleading f a company knows how to build loyalty with their actions.
Julep did not adequately disclose all of the details of their plans when a customer was signing up for their free box and that’s what makes their actions so deceiving. They used the word “free” to hook their customers into going onto their website when free doesn’t really mean free. It’s something that we see all over the place because free is just a word that shows enormous appeal to customers. This attracts people into checking what these products are but companies don’t show the full story. They just ure customers into their businesses with the promise of something free of charge.
This is unfair to customers because they have the belief that they are getting something and in the end, can accumulate many hidden charges that they would have never incurred if they didn’t fall for these claims. Adding onto Juleps misleading claims, some customers even stated that they did not receive their box. They also had trouble cancelling their subscription after they had already been charged and many were even denied the chance of a refund. They had to dispute the charge with their banks (King). This only adds to the wrongness of the company’s doing.
Businesses put honesty aside when it comes to these types of promotions. To a the right thing. business, deceptive marketing is simply a sales gimmick but to customers, it brings so many unnecessary troubles. A company should treat their customers as a great asset rather than an inconvenience. Not everyone would agree however that this practice was unethical. Albert Carr states that ethics in the business world are just game ethics. Game ethics are used as a way to win within business and so, deception is ok (Carr 137). He argues that in the business world, there will always be the need to “bluff”.
Bluffing can come in many forms such as “conscious misstatements, concealment of pertinent facts, or exaggeration” (Carr 137). These are all part of the game of the business world. Carr even gives examples of business practices like “products to be advertised in a way that made it sound a great deal better than it actually was” (Carr 136). If a manager decides to be true all the time, then they limit their availability of business opportunities to gain more success. Julep did exactly hat; they simply used a bluff to get more customers into their business.
The CEO, Jane Park, gave a statement saying “To set the record straight, Julep has never engaged in deceptive marketing. “We have always been clear about the terms and benefits of our Maven subscription program, which is beloved by thousands of women across the country” (King). Julep stated that all of the terms pertaining the free maven box were included when the person signed up to get the box. So someone might argue that it is a customer’s duty to read what they are signing up for. So was it really deception if their process was being disclosed in the terms of agreement?
It was stated that customers were also made aware of the charge before it happened through the email that they provided and that Julep was in contact with all their customers. . All of the details may have been in the terms of agreement but a customer doesn’t always take the time to sort through pages of agreements so it should be explicitly stated with the advertising that when you sign up for a free box, you are also signing up for the subscription. Terms of agreement can be unnecessarily long and ometimes the details are not clear to understand.
And, although the process details were available to the customer, the customer had to actively search for any questions that they may have, seeing as how they are located on a separate page. When it comes to the contact between Julep and their customers, many argued that they never received any notices of future charges and took that issue up with the company as well. So, as much as Julep tried to defend themselves, it did not work and in the end, it caused them to clearly state that the plan renews the following month for a fee of 24. 99.