Lululemon fined for misleading return policy

Internet Retailing

25th Jul 2017

Athleisure retailer Lululemon has landed in hot water after publishing misleading information about returns on its website.

The Australian Competition and Consumer Commission (ACCC) announced today that it has fined the company $32,400, for alleged false or misleading representations about consumer guarantee rights.

The fine relates to three separate infringements, according to the consumer watchdog group.

First, Lululemon in May listed sale items on its website  under the heading “We Made Too Much”. The web page read, “We made a little extra – don’t be shy, help yourself. It’s yours for keeps so no returns and no exchanges.”

Second, the company’s return policy on its website states: “Final sale items like underwear, water bottles + We Made Too Much gear are yours for keeps.”

Third, a customer contacted Lululemon in November 2016 requesting a refund for products she considered were faulty. However, she received an email from a Lululemon representative saying, “We do not offer refunds for quality affected garments.”

The ACCC alleges that, by making these statements, Lululemon suggested consumers were not entitled to return, obtain a refund, or exchange these products under any circumstances, a violation of Australian Consumer Law.

“The ACCC alleges that Lululemon made representations to customers that they were not entitled to a refund or replacement for products under any circumstances, when that was not the case,” ACCC Commissioner Sarah Court said.

“If a product or service fails to meet a consumer guarantee, people are automatically entitled to a remedy under the Australian Consumer Law. If products develop a fault which constitutes a major failure, customers are entitled to a refund, even if the product was purchased on sale.”

“Businesses must ensure their refund and returns policy do not breach consumer law, and that representations they make about consumers’ rights to return goods or obtain a refund accurately reflect the consumer guarantee rights under the Australia Consumer Law” Court said.

Lululemon provided the following statement in response to questions from Internet Retailing:

We always endeavour to deliver the best possible experience for our guests in-store and online and if we ever fall short, we make it right. Our stand is “if our product doesn’t perform for you, we’ll take it back.”

We have collaborated with the ACCC to resolve all alleged contraventions and to ensure that our commitment to consumer rights is clear and in accordance with the Australian Consumer Law. Our language in-store and online has been updated to ensure consistency and clarity for our guests across all of our channels.  

According to the ACCC, payment of a penalty is not an admission of a contravention of the Australian Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.