I've uploaded the credit card section here:
It says you'll be billed month per month on the right hand side under the VIP membership program, but I think it's pretty clear that the page is engineered to be misleading. It looks like a standard upsell, not a mandatory part of the purchase.
They're relying on people clicking the accept terms and conditions check box without realizing that it's signing them up for the membership, i.e. it's the terms and conditions of the program, not the site in general.
Terms and conditions boxes are common in the checkout process and nobody gives them a second thought. I'm not sure I would have caught this one if I went in naively.
Clearly unethical, IMO.
Well, you could, but those terms would be ineffective. Of course, this doesn't help if they succeed to intimidate the victim. But if the victim doesn't pay, there's nothing the scammer can do, because this case would never succeed in court.
Having said that, it might help if the victim complains to the police. Depending on how serious customer protection is taken in the US, this business might be more than merely "unethical".
Enough charge backs and they lose their merchant account.
Most Credit cards users don't realize just how simple it is to run a charge back. It is literally one short phone call.
1. create a profile (answer questions on style)
2. fill in details, click a *JOIN NOW* button
3. get a "*first month* for 50% off" offer
4. get to this payment screen
To me it's pretty clear that it's a recurring service, like many others that exist for chocolate, wine, beer, socks, razors, etc. The right hand side on the checkout is clear enough, and the skip the month part is there highlighted, not in small letters.
EDIT: apparently this is just the flow after choosing something on the home page. If you choose one of the "special" products or go to the Featured section, it does go through a standard add to cart + checkout flow (http://minus.com/lA7snPkHUHOZR). That is actually terribly misleading.
I was prepared to disagree with OP but the model does seem a little customer-hostile.
Actually it says you'll be billed for a "Member Credit", which "can be redeemed for any JustFab style on the site".
I'm not sure what that means exactly, but if you can actually redeem one of those credits for $39.95 worth of product, then 1. it's still very misleading because you spent a lot more money in their store, on their products than you intended to, but 2. at least your money didn't just evaporate, except 3. is there anything preventing them from at some point deciding "From now on, we will only sell novelty dish-washing sponges, at the great rate of one credit per sponge!", making all out-standing credits worthless in a single TOS change?
Seems to me that they're saying if you're a member but didn't make your decision for your free (sunk cost) product by the 6th, they charge you and turn it into store credit. It's not like they're charging you and saying "too bad, you don't get anything."
I will say that the negative attention this confusion could bring them is more harmful to them than if they revamped the purchase process to just make it crystal clear what you're buying.
From my experience at Poll Everywhere, the "sidebar" on the checkout process does not get read by anyone, anytime. For some reason, the sidebar becomes a blindspot and is ignored (at least in our testing) during a checkout process and so is thus not a great spot to put reminders about how you're joining a membership and will be charged monthly if that is the only place is is put.
After all , it would seem strange to be voluntarily charged unnecessarily.
I don't think this is some grey area: if you tricked me into paying a sum I never chose to pay, you're stealing money off my pocket.
Those ads usually seem to target teenagers (they're mostly on music channels or channels aimed at kids) who probably aren't in charge of the bill and if they're not careful they might end up with a bad surprise. This is beyond shoddy.
The law like anything else is a system, justfab is exploiting it for fun and profit.
I really hope you are aware of the difference.
What exactly could people instead be lured into thinking they're doing here?
I'd expect that to be a re-occurring cost.
I suppose it may be out of the norm of some people, especially the HN crowd, but this kind of thing isn't really unusual.
Brick and mortar stores have VIP programs all the time.
Yes. But you can also show up and buy a pair of shoes. I don't believe what you are describing is a fair analogy.
When I order a pair of shoes I expect a pair of shoes. I don't expect a hat, jacket, or a personalized VIP shopper.
On this website if I pretend to order a pair of shoes there isn't anything to indicate (aside from the fine print) that I'll be receiving more than a pair of shoes.
I'd expect this place to suffer a pretty serious class-action lawsuit soon. If I was an investor I'd run as far away as possible.
Honestly, I'd have to click around a little bit to even figure out how to just search something without first joining them and going through the VIP program upsales processs.
(Also you don't get “nothing” for $39.95; you get store credit. That sucks if you didn't want any, of course, but given the fact that people actively sign up to be able to purchase from that store, I can't imagine it's entirely worthless.)
"You must read and agree to the JustFab VIP Membership Terms of Service."
Which makes sense - I bet they're making a killing on zombie subscription fees and little on legitimate users.
For example, maybe they keep enough to funds for last 6 months of chargebacks and have some special kick-back to bank? Or maybe the game plan is to always open a new merchant account after the first one is closed? Or maybe the bar is so low and they never need to worry to lose their merchant account?
Porn sites, bail bonds, check cashing locations, dating sites, weight loss centers, and dozens of other types of businesses use this category of services which has a very high tolerance of chargebacks.
The sad part is if you get enough chargebacks you can actually bake in a higher transaction cost and not have to pay per-chargeback fees like other normal merchants do.
I wonder how they managed to have the site up for so long - may be some kind of a high risk merchant account provider who approved their payment gateway.
I'm sorry: you're talking about the section that explains "How the JustFab VIP Program Works"? Whose 4 bullet points say:
1. Get a boutique the first of the month
2. Browse and Buy
3. Don't like anything, skip
4. If you don't buy or skip by the 5th you'll be charged anyway?
And a default unchecked box that you read and agree?
I think the concept of "engineered to be misleading" might just put the points in say, a small font, or in the terms and conditions behind a link. If someone describes it clearly in bold font in a section explaining how the site works, well, that's a pretty strange way of misleading people.
Think of the people in your life not quite as tech-savvy as yourself, like maybe your next-door neighbour or your mother. Would you expect them not to be misled by this? Sure, I'd hope my mother would be critical enough to notice, but I can easily see it happen otherwise.
Another indication is, I assume that a lot of people who do notice will instead decide to bail out entirely and not buy anything, rather than (like I would do, if I really wanted the item) pay, log in, and cancel the account immediately. Because that's not really an obvious thing to do, given the set expectation of being a regular online shopping store.