Here Are 10 Women Who Say They Lost Thousands Of Dollars In Lularoe's Alleged "Pyramid Scheme"

“It’s been a horrible experience. I just want it to be done. I want to pay off my loan and credit card and be done. I unfortunately don’t see an end in sight any time soon.”

ICYMI, the multi-level-marketing clothing company Lularoe is facing two class-action lawsuits from former sellers, who liken it to a “pyramid scheme.”

The two lawsuits, filed in California on Oct. 13 and 23, allege that the company is hooking women in with the promise of riches, then encouraging them to buy clothing the company knows they will never be able to sell.

Instagram: @lularoe

Many former and current Lularoe sellers told BuzzFeed News the trouble started when Lularoe switched their return policy in the fall.

After promising all sellers in April that they could return unsold products for a 100% refund, including shipping fees, the company in September reverted back to their old policy, which states they would only refund 90%.

They also said they would not cover shipping fees, and would only accept clothing “in resalable condition” that was bought in the past year.

A spokesperson from Lularoe told BuzzFeed News, “LuLaRoe reviewed these claims. They are inaccurate and misleading.”

Jamie Craig, 30, from Michigan: “I invested $15,000. I never profited.”

Jamie Craig, 30, from Michigan: "I invested $15,000. I never profited."

Craig, who is married with a one-year-old daughter, started Lularoe in March of 2017 because she was looking to work from home and make money.

At first, Craig said she invested a total of $15,000 in her new business.

“I did go into debt,” she said. “I opened up a credit card to pay for my initial inventory, and was told to keep buying inventory to have 10 of each size (in each style). I still owe $10,000 on the credit card.”

Craig made friends, and said she met great people through Lularoe, but she soon grew troubled by the company's business model.

“The market is so over-saturated, but yet they still let consultants sign up to sell,” she said. “The people that signed on when they first started up are the people making money.”

When she decided to quit, she said she contacted Lularoe about sending about $6,000 of inventory back for a refund. However, she said she hit a wall.

“The wait time when you call them is insanely long, and it’s completely unorganized when you call to talk about returning your items,” she said. “I haven’t attempted to send my stuff back because I am trying to sell what I have to as many people as I can before doing so.”

In response to Craig's claims, Lularoe said Craig hasn't sent the company the necessary letter to the correct email inbox to cancel her account. Craig told BuzzFeed News on Monday she received a reply from Lularoe, saying she needed to send her cancel notice to a different email address.

Craig said she is now trying to unload what she can to recoup some of her costs.

“I had a consultant come over and buy some of my stuff at wholesale cost, and I sold her my lighting and mannequin and stuff,” she said. “I spent about $1,000 on supplies as well, which everyone basically has to do. That’s all money I’ll never get back since I never profited.”

Jamie Craig

Katie Denney Martin, 31, from Aurora Colorado: “I would say I put in around $11,000. I probably only made about $4,000.”

Katie Denney Martin, 31, from Aurora Colorado: "I would say I put in around $11,000. I probably only made about $4,000."

Martin is married with a 2-year-old son, and she said she started selling Lularoe in October 2016 because she was intrigued by an opportunity to stay home with her baby and make money.

“I knew a few others who had gotten involved and had success, and the internet was filled with stories about women making their investment back in months, and who were able to quit their jobs and stay home with their children,” she said.

Her initial investment in the company was $5,000. She then spent another $600 for an initial order of leggings, and around $1,000 on other items necessary for running the business. After that, she said she was told she had to order at least 33 items a month, which typically were at least $600.

“I had to use credit cards not to start the business, but to continue it. I can’t even calculate the time I spent away from my family, or the stress I have gone through in the last year, but I would say I put in around $11,000 total when all is said and done, and I probably only made about $4,000,” she said. “Everything I had went immediately back into my business, or to pay off what I’d spent on inventory and supplies on credit cards.”

She soon grew concerned about aspects of the company's business model, like the fact that sellers did not get to pick which styles or sizes they were sent, the amount of new sellers joining up, and the quality of the clothes.

“I never got clear answers, was told that was just the way it is, and was told that my complaints were 'impeding others pursuing the American Dream,'” she said.

Ultimately, it was concerns about the clothing's quality, as alleged in a April lawsuit, that made her decide to quit.

“By the time I went to go and return my merchandise, once I had tried (and failed) to sell it through other measures, I was told it wasn’t guaranteed they would return money,” she said. “They said they would donate any items they couldn’t resell, and we wouldn’t have any say in the matter.”

She added: “I wiped out a good amount of savings, and I continue to try and pay off those debts, and still have a lot of inventory I can do nothing with.”

In response to Martin's claims, Lularoe stated Martin has not attempted to return any merchandise for a refund since quitting in April.

Katie Denney Martin

Megan Sebastian, 31: “When it’s good it’s good, when it’s bad it’s hell. They are worried about money and that’s about it.”

Megan Sebastian, 31: "When it's good it's good, when it's bad it's hell. They are worried about money and that's about it."

Sebastian is a wife and mom of two young girls who started selling Lularoe in June 2016.

“I'm a stay at home mom, and was looking for a fun way to make some money. I loved the idea of owning my own boutique,” she said. “I researched a lot before making the decision to join. My sponsor was very successful in her business and helped me feel optimistic and excited about taking the plunge.”

She initially invested $5,000 in inventory, and soon after spent another $1,000 on merchandise. She also spent at least $1,000 on business costs.

“By the end of 2016 I had $20,000 in inventory and by Lularoe standards I had a 'smaller' inventory,” she said.

She said she was constantly pressured by others in the company to “buy buy buy.”

“It was explained to me that I wasn't successful because I didn't have enough inventory,” she said. “So I went into even more debt to buy more. There were lots of items that I got stuck with and had no hope of selling because the pattern was so atrocious. But I was optimistic and kept working my business. I really worked it and tried my best. By the end of last year after expenses I made just over $1,000.”

Ultimately, Sebastian said she decided to quit due to chronic migraines. However, she said she struggled to return items to recoup her investment, and said she knows she has lost money.

“I'm unsure of how much I've lost,” she said. “I'm still waiting on LuLaRoe to refund me for a more than $400 credit on my account, and send me materials so I can return my inventory for a refund. I currently have $5,000 worth of inventory I'm waiting to return.”

In her experience, she said when “Lularoe is good it's good, when it's bad it's hell.”

“They are growing too fast for them to keep up,” she said. “Instead of taking a minute to regroup and implement policies to benefit them and their retailers, they just keep pushing through at the retailers' detriment. They change policies at the drop of a hat and expect their retailers to pick up the slack and make changes ASAP. If they don't, Lularoe can cancel their contract.”

In total, Sebastian said she went into about $13,000 in debt, half of which she still owes.

“It's been a horrible experience,” she said. “I just want it to be done. I want to pay off my loan and credit card and be done. I unfortunately don't see an end in sight any time soon.”

In response to Sebastian's claims, Lularoe stated Sebastian has not yet completed her cancellation process.

Megan Sebastian

Kris Rowlands, 49, from Ohio. “The bottom line is that I’m out about $5,000 total, even if I do get my refund.”

Kris Rowlands, 49, from Ohio. "The bottom line is that I'm out about $5,000 total, even if I do get my refund."

Rowlands is married, and started selling LuLaRoe in August 2016 to make extra money and have fun.

She said her total Lularoe expenses were $​7,323.18 for 2016, and she estimates she spent another $1,000 for 2017. She spent $46,830.82 total on inventory, some of which she used loans and credit cards to buy.

“I am a strong, powerful and intelligent woman,” Rowlands said. “When I finally onboarded and saw what was happening behind the scenes, I started complaining, and loudly.”

She said these issues, like the “buy more, sell more” mentality, favoritism, shortages of popular colors and prints, and more left her with a “huge pit in my stomach.” Despite this, she still tried to make her business work.

“From February to July in 2017, I quadrupled/quintupled my effort with Lularoe,” she said. “My sales continued to decrease. It was then that I decided that it was time to get out.”

After decided to quit, Rowlands said she returned 21 boxes of clothing back to Lularoe, valued at $19,083.60. She got a notice her inventory arrived at the warehouse on Sept. 24, but has heard nothing since.

She said her experience has been “horrific.”

“Frankly, the whole experience has made me physically ill,” she said. “I now stress daily about the $19,083.60 refund that is owed to me and I need that to pay my business taxes as well as the remainder of the debt that I still hold from this venture. I really, really wish that I'd never heard of Lularoe. I've lost over a year of time with my wife while I was slinging clothes. I'll never get that back.”

Lularoe said they are looking into her claim, and BuzzFeed News will update when they reply.

Kris Rowlands

Hannah Mathison, 26, from Sioux Falls, South Dakota: “They suggested going into debt.”

Hannah Mathison, 26, from Sioux Falls, South Dakota: "They suggested going into debt."

Mathison is married, and she and her husband learned last year they would not be able to have biological children. They had just begun exploring adoption when she went to her first Lularoe party in June 2016.

She said the seller, a family friend, told her she had made $13,000 in one month, and she thought it could be a way for her and her husband to afford adoption.

“Not only could Lularoe allow us to become parents but it would give me the freedom to stay home with my future children,” she said.

To make her initial investment, Mathison took out $6,000 on four credit cards.

“[Lularoe] suggested going into debt. 'You'll just make it back in four months anyway,' they would say,” said Mathison.

Mathison said she hustled for four months, doing lives sales, parties, and sales on Facebook. She made about $10,000 but invested $7,000 back into Lularoe merchandise so she could keep her collection fresh.

“I decided to get out because it was causing too much stress,” she said. “Any money I was making was just going back into inventory, I wasn’t making a profit.”

She decided to quit in February, and sent back about $7,000 in inventory. She said she has heard nothing since she mailed her inventory back. Lularoe told BuzzFeed News the company is still processing Mathison's return.

Mathison said the culture of Lularoe was incredibly stressful.

“The entire company is based on the power of positivity,” she said. “Consultants must always be happy and chipper. I felt that I was failing and losing all this money because I was stressed out about it sometimes and not trying hard enough. From the outside every other consultant was doing a fantastic job and working themselves out of debt like I wanted to. This just made me feel worse and more stressed out.”

Hannah Mathison

Sheila Reed, 50: “I truly spent every single penny we had in order to start up with Lularoe.”

Sheila Reed, 50: "I truly spent every single penny we had in order to start up with Lularoe."

Reed is married with three grown daughters, and said she fell in love with Lularoe and the women who shopped with her.

“Having been widowed at 45, I knew what it felt like to feel all alone in a crowd, and thought that maybe my Lularoe business could help other ladies to feel just a tad bit less lonely and cherished, loved and adored,” she said.

To start her business, Reed and her husband “truly spent every single penny we had,” she said.

“To get the funds to start up with Lularoe, we sold TVs, an old car, and lots of household items,” she said. “We did some major de-stashing and sold those things so that I'd have the funds needed just to onboard.”

She said she is not sure how much she made in profits. After quitting in August, she returned $9,747 worth of merchandise.

“Finally, last week I got my refund verification. It was $1,051 short. I accepted, just because I was scared I’d never see anything if I argued,” she said.

Lularoe confirmed they were sending Reed a refund check on Wednesday.

Sheila Reed

Kristina Carter, 25, from Windsor, New York: “I have lost at least $15,000 on my business. Everything I made went back into that business.”

Carter is engaged, and runs a dance studio and works as a teacher. She began selling Lularoe in March because she was only running her dance studio at the time.

Initially, Carter invested about $15,000 in her business by taking out a loan.

“I figured even if it took more than six months, it wouldn't take much longer to make my money back,” she said. “I was under the impression that I would make back my initial startup cost in three to six months based on how much I worked.”

However, Carter said even though she was working at least 40 hours a week at her business, she wasn't seeing the results she wanted.

“The total profit I made was only about $8,000,” she said. “I have lost at least $15,000 on my business, because everything I made went back into the business. I had to use most of my profits to reorder as Lularoe requires you to do this to stay active. I am still paying back my loan and was unable to pay it off.”

After quitting, Carter attempted to return her clothing stock. However, she learned that since she had bought approximately half of her merchandise from other Lularoe consultants and not directly from the company, she was unable to return it even if it was unsold.

She then tried to return the other half of her inventory, which she said has been a struggle.

“They have not responded to my email about going out of business which I sent multiple weeks ago,” she said. “When you call corporate you're placed on hold for hours and if you choose the call back option no one ever calls you back. So needless to say, I haven't been able to send anything back.”

In response to Carter's claims, Lularoe stated Craig sent her cancellation notice to the wrong email account, and they have sent her a notice to send it to the right account.

Instagram: @lularoe

Rebekah Olive, 31, from Raleigh, North Carolina: “I consider it all a loss. I didn’t come out of it with money and I’m still paying off my loan.”

Olive started with Lularoe in January 2016 after seeing how well the person who she eventually reported to at Lularoe was doing.

“I wanted to make as much money as she was,” she said. “It was really easy to make money and the investment at the time seemed easy to make back.”

She initially invested $6,000, then continued to invest what she made. She estimates she invested a total of $15,000 to $20,000.

Olive said she was one of the first 5,000 sellers in the US, which she called the “perfect” time to join the company.

“We were making anywhere from $5,000-$10,000 a month (but we had to invest it all back in Lularoe and pay bills),” she said. “But then they started onboarding 100 to 250 consultants a day from March 2016 to the present. This is why we got so oversaturated so fast.”

In June 2016, her sales “completely stopped,” she said, and she still has the initial loan she used to start her company.

“I don't even want to try returning my merchandise. I’ve already lost so much money because of them that I don’t want to lose anymore,” she said. “I consider it all a loss. I didn’t come out of it with money. I’m still paying off my loan from 2016 and I still have product sitting that won’t sell.”

In response to Olive's claims, Lularoe stated Olive has not cancelled her account.

Instagram: @lularoe

Julie Ryan, 31, from University Place, Washington: “I estimate that in the end I will only have lost $6,000 which, sadly, makes me one of the lucky ones.”

Julie Ryan, 31, from University Place, Washington: "I estimate that in the end I will only have lost $6,000 which, sadly, makes me one of the lucky ones."

A screenshot from a Lularoe manager promising the 100% return policy is “not going anywhere.”

Julie Ryan

Ryan is married with no children, and started Lularoe in November 2016.

“At the time, the stuff was selling like crazy,” she said. “Originally it was going to be an extra income gig as I worked full-time, but I lost my job just days before my kickoff party.”

She invested $6,000 at first, plus about $1,000 in miscellaneous start up costs. After that, she said she spent anywhere from $400 to $2,000 a month in new inventory from December to about May.

One of the things that led her to start her business, she said, was Lularoe's return policy.

“They always said they would refund 90% of your investment if you decided to quit,” she said. “When they changed it to 100%, they assured us that it was a policy change that was here to stay. They encouraged us to buy more inventory and we did, believing that we would be able to return merchandise we couldn't sell if we were to quit the business.”

She said it is hard to say how much total she made in profit, because she was unable to sell much of her inventory for full price.

“At first, marking down to $30 for tops would generate sales, but then people started wanting lower and lower prices,” she said.

She said that she now doesn't even think she will bother trying to return her merchandise, as she has heard horror stories from others.

“Because of the ever changing return policy, the long processing time, and the lack of communication from the company, I will probably not return anything to them,” she said. “I'd rather sell as much as I can at discounts, and then donate the remaining decent stuff and burn the garbage prints.”

She said she estimates after selling her remaining merchandise she will have lost about $6,000, “which, sadly, makes me one of the lucky ones.”

“My impression of Lularoe is extremely negative. I think that [founder] Deanne [Stidham] originally did found the company with good intentions, but the money coming in caused good intentions to melt away and greed to take over,” she said.

Lularoe said they are looking into her claim, and BuzzFeed News will update when they reply.

Karla, 46, from Columbus, Ohio: “My experience with them was horrible and I suspect it’s the same for the other consultants bailing.”

Karla is married with one child, and said she got “suckered” into signing up with Lularoe in May 2016.

“I invested probably $20,000 in Lularoe,” she said. “I got a 0% for 18 months credit card. At one point I had $14,000 on it, it is down to $4,500 now. I still have not paid it off and I quit two months ago.”

She said she made no profit, when all was said in done. She said she attempted to return her merchandise to recoup some of her costs, but was told she was too late to receive the 100% refund.

“I don't trust them to be honest and accurate anyway so it's for the best,” she said. “I have 500 pieces I'm trying to unload and pay off my credit card.”

She said she has “zero respect” for the company.

“My experience with them was horrible and I suspect it's the same for the other consultants bailing,” she said. “I met some great friends who started as customers. That's the only positive.”

Lularoe said they are looking into her claim, and BuzzFeed News will update when they reply.

Instagram: @lularoe

“Lularoe is working quickly to process remaining refunds,” it stated. “It is a complex and time-consuming process. Each piece returned is processed and inspected, and accounting must be confirmed. Lularoe communicates regularly with each departing retailer and will continue to identify communication enhancements to those canceling their business.”


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