Sephora faces a discrimination class-action lawsuit claiming the cosmetic giant deactivated online accounts of Asian customers from their database because they believed Asians would purchase their products at discounted prices and resell them for profit.
Sephora is one of the largest cosmetic retailers in the world. Just like other large retailers, Sephora offers their preferred customers, known as Insiders, special benefits and rewards. Insiders buy more products than regular customers do, which entitles them to receive incentives like samples, free shipping, concierge service, special sale prices, and invitations to select events.
Last month, Sephora made public their five day, no limits, 20 percent off all products sales event to take place starting November 6. However, the first day of the event backfired to some degree; Sephora’s website crashed due to a large volume of customers.
The next day, Sephora apologized to their customers for the inconvenience by posting a statement on their Facebook page.
“Our website is incredibly robust and designed to withstand a tremendous amount of volume. What caused the disruption yesterday was a high level of bulk buys and automated accounts for reselling purposes from North America and multiple countries outside the U.S.”
According to Bloomberg Businessweek, four American-Asian women filed a class action suit against Sephora claiming discrimination. The women maintain that their Insider accounts and numerous other accounts with Chinese or Asian names or e-mail addresses with Chinese domain names were deactivated or blocked the first day of the sale. Their reasoning behind the alleged charges of discrimination is that Sephora wrongly assumed the accounts they deactivated were buying products in bulk to resell at higher prices.
Sephora noted their actions on their Facebook page.
“The reality is that in taking steps to restore website functionality, some of our loyal North American and international clients got temporarily blocked. We understand how frustrating it is and are deeply sorry for the disruption to your shopping experience. However, in some instances we have, indeed, de-activated accounts due to reselling — a pervasive issue throughout the industry and the world. As part of our ongoing commitment to protecting our clients and our brands, we have identified certain entities who take advantage of promotional opportunities to purchase products in large volume on our website and re-sell them through other channels. After careful consideration, we have deactivated these accounts in order to optimize product availability for the majority of our clients, as well as ensure that consumers are not subject to increased prices or products that are not being handled or stored properly.”
Daily News reported comments made by attorney Doug Wigdor.
“This is an egregious example of a retailer singling out individuals based on racial stereotypes.”
Wigdor commented on how many people his firm believes were affected by Sephora’s actions.
“It is well into the thousands as Sephora is one of the largest cosmetic retailers in the world.”
A Sephora spokesperson expressed their concern to Women’s Wear Daily.
“This lawsuit significantly distorts the facts in this matter. We look forward to defending our actions in court. Among other points, we intend to make very clear that clients from a number of countries around the world have been impacted by a temporary block we needed to place on accounts in order to restore the functionality of our site during a surge of activity by resellers during a promotional event two weeks ago.”
Sephora is not the first to be accused of racial profiling. Other retailers have been accused of discriminating against minority customers.
Recently, the New York State Attorney General investigated Barney’s and Macy’s and found they had detained an unbalanced number of Latino and African American customers for shoplifting. In August, the stores agreed to train their employees better and paid $525,000.
Sephora denies the racial profiling and discrimination allegations.