Dive Brief:
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Mary Kay Cosmetics is suing RetailMeNot, saying the site sets a fraudulent implication that its wares are available to the public or subject to coupons.
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The cosmetics company sells its products though salespeople working locally, not through its corporate site or stores, and says the RetailMeNot coupons are harming its brand.
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RetailMeNot spokesperson Brian Hoyt told Retail Dive: "RetailMeNot, Inc. operates in the best interests of consumers and its retail partners by aggregating information to help shoppers save money using its websites and mobile apps. RetailMeNot, Inc. believes the allegations in this lawsuit are without merit and that it operates in full compliance with relevant laws. We intend to vigorously contest this matter."
Dive Insight:
Mary Kay is the cosmetics company famous for its pink Cadillac reward for top sellers, and it depends not just on sales of cosmetics but also on its salespeople recruiting other salespeople. Enter RetailMeNot, which is inexplicably offering coupons for Mary Kay products that go anywhere; they’re apparently useful only in fueling consumers’ expectations.
Mary Kay has taken the whole thing to court. But RetailMeNot has a problem here, even if not a legal one, in that many of its coupons are displayed on the site but dead-end there. RetailMeNot CEO Cotter Cunningham recently told The Street that mobile presents a big short-term challenge but a long-term opportunity. That may be true, but consumers will likely be less tolerant of coupons and deals fizzling on their phones.