Tsk, Tsk Scentsy... I'm watching you
An email was sent out today to active Scentsy representatives asking for their participation in lobbying FOR a proposed amendment to to the Federal Trade Commission Act. First, I'm going to dissect the email sent to consultants, then I will dissect the proposed amendment: H.R. 3409 The email sent out is included here:
In this email, Scentsy petitions their participants to contact their respective representatives that oppose the proposed H.R. 3409 amendment. They claim that this bill would "raise the bar on direct selling companies while cracking down on those that take advantage of the direct selling business model." They then URGE the participants to get on the horn with the representatives that oppose this proposed amendment because it would ensure that compensation is not based on recruiting a downline, but instead for producing sales to legitimate end consumers that would use the products. Seems pretty straightforward, right? I can get down with that. That's it, right? Nooooope. In the text of the proposal HERE the message is a little more complex than just raising the bar for direct sales companies. The proposal indicates that not only would the end consumer need to be an actual customer, but that any company that has a buyback program could not be deemed an illegal pyramid scheme. Specifically: “(b) Any person who establishes, operates, promotes, or causes to be promoted any plan or operation which sells or solicits the sale of consumer products or services in the home or otherwise than in a permanent retail establishment, and which sells products or services directly or indirectly to independent salespeople, shall have a bona fide inventory repurchase agreement.
(c) Nothing in this Act may be construed to prohibit a plan or operation, or to define a plan or operation as a pyramid promotional scheme, based upon the fact that participants in the plan or operation give consideration in return for the right to receive compensation based upon purchases of goods or services or intangible property by participants for personal use, consumption, or resale so long as the plan or operation does not require inventory loading and the plan or operation implements a bona fide inventory repurchase agreement." A sphincter says what? WHAT? That's right... they must think you're all assholes. But wait, there's more. If you don't have a buyback program, you're an illegal pyramid scheme. Clever. Truly. Where this fails, miserably, mind you- is where they basically excuse every single company that requires an inventory purchase, or pushes inventory loading down your throat from any unfair business practice charges if they offer a reasonable buyback program and sell to an "ultimate user". 1. Um, no. 2. Please define reasonable. 3. There is no further elaboration on the definitions they cite in the proposed amendment- such as the very vague and pathetic definition of "inventory loading". That term has and always has been subject to interpretation, and that, my friends is recipe for danger. Without any limitations or guidelines on what is an unreasonable amount of inventory to require someone purchase, and without any definition of "reasonable time frame to resell"... we have a lot of wiggle room when we should be crammed shoulder to ass in a really, really tight box. The verbiage also plans to identify "ultimate user" as the person who buys the product for consumption- REGARDLESS if that person is a participant in the program or an actual customer. So all that inventory could totally be deemed for personal consumption. Riiiight. ...Because any one person totally needs 46 wax warmers and 982 bars of scented wax. It's TOTALLY all mine, guys. Really. This is essentially the opposite type of legislation that will "raise the bar" for direct sales, Scentsy. You're pulling the wool over your people's eyes, and that's just really uncool. If you're going to ask your participants to support a change to the law, you have an absolute responsibility to outline ALL the terms of the change in a manner that they can clearly understand. By only highlighting the good-sounding stuff- you not only insult your participants, but you raise my eyebrow at your motives. For goodness sake- why not INCLUDE the actual proposed amendment for those that can read it and wish to understand what you're asking them to do? Essentially, you want your own people to push in favor of what protects YOU best, but walks them straight into a lion's den rife with hungry crooks just waiting to devour the unwitting. Nice. All that for some stinky wax bars and pretty ceramic hot plates designed to melt the overpriced wax? No, just no. Scentsy consultants, and anyone else interested in this need to get on the phone with their representatives and DEMAND that these terms be defined first and foremost- before any additional free passes are provided to companies wishing to suck your wallet dry. Pity too, Scentsy didn't feel like a major offender in the inventory loading department to me, but this reads as a really shady way to get the law to allow them to push more inventory onto consultants and get away with it. Gross.