Let's Get Real
Guys. Let me get real for a second.
This is long. Stick with it.
This is not an attack, but a heads up, because I value you as a friend, and I value your livelihood, and your family.
Let me preface this in saying: I own probably 5k in LuLaRoe merchandise, at minimum. I have been generally lucky with the dependability of my products, as most were from older runs. The ones that I have not been so lucky with, I have taken as a loss, most I have replaced at my expense. On occasion, a consultant has offered to help. I have supported my friends who have started selling, I have supported my friends who have stopped. How you choose to support your family is none of my business.
BUT.
I cannot sit back anymore and be silent. LLR, as a brand, is in serious trouble. Many of you know nothing about credit/collections/litigation/and bankruptcy, but I work with these things every. single. day. I have seen companies go under. I have seen the process. I have seen them keep their employees completely in the dark, and then close their doors without a peep. The red flags are looking like a field of poppies right now.
A while ago, a class action lawsuit was filed against LLR, because they charged tax (they; meaning the company - as they designed and implemented the program, not the consultants) You've all seen it. Yes. Refunds have been issued to SOME consumers that were part of this. That isn't the issue here. LLR ILLEGALLY charged taxes, despite being advised that it was illegal, despite being made aware of the issue time and time again. Then, in court documents as recent as last week, they passed the buck to consultants claiming they (consultants) were using LLR's payment system (Audrey) on their own terms and were under no requirement to do so. (LLR P&P says otherwise).
The issue with this is, this money, that was collected illegally, was not kept in escrow. It was kept in an interest bearing account. LLR made a profit, off of illegally collected funds. Let that sink in.
Today, LLR released a statement to consultants that they are no longer allowing the use of credit or debit cards to purchase wholesale merchandise. (This was posted in build, and taken down. Whether or not they have actually retracted the statement is up for debate) Okay, great. What does this mean for you, as a consultant.
1. It means you have zero protection, as a consumer. Generally, ACH transfers are not covered by your bank if something goes wrong. If your order is shorted pieces, you are not covered. If your order goes missing, and is not insured properly, you are not protected. If your order just never shows up, oh well. Red flag.
2. I keep seeing the recommendation to "get a check from your credit card company instead of just using the card" - please don't. This is not just a check. It is not a loan at normal interest. It is a cash advance in the form of credit. Cash advances are predatory lending, and are not subject to the APR governing principles. The APR on this is ASTRONOMICAL. The interest is often a daily rate. Do. Not. Do. It. If someone suggests this, please question their motive, and their financial responsibility.
It has been noted that this new "rule" is due to an arbitration between LLR and their credit card processing company, with a new 20% fee accessed on the total transaction. Ok, let's talk about that.
THIS IS NOT A FEE. The merchant processing company is withholding 20% of every transaction. As a precaution. Why would a company do this?
In summary, credit card processors place holds on merchant funds in order to shield themselves from the risk of chargebacks, suffering losses due to merchants conducting fraudulent transactions, and fees that may not be recoverable due to a business closing. Collections companies generally begin this process when a company exhibits any kind of financial distress. Cash flow issues include continual late payments, requesting large credit limit increases in a short period, etc. all of these are signs of a company preparing for bankruptcy. An out of the blue fee is usually a sign of copious charge backs. Again, red flag in finance land. Chargebacks mean bad business.
LLR is considered high risk for severe financial stress per their DUNS report. (This is public information, available to anyone - it is a paid report) red. flag.
Please consider your financial security. Your ability to survive if this company decides tomorrow to go under. Your ability to repay these debts. Your future.
This is not a post not to buy LLR. Please support your friends in their business ventures. If you are not personally a fan of LLR, share their posts anyway. Help them book parties. They are moms supporting their children, people who have left their jobs, women who have been left hang out to dry and been given excuse after excuse. They are trying to survive. Help them, however you see necessary.
ETA: Consultants - if you are looking to get out of the business, or have someone review your assets, contracts, etc - there are a TON of notaries volunteering their services. Many attorneys offer free consultations. Many law schools have recommendations on reputable agencies that they work with. Take a life line, do not drown unnecessarily.