NAD Recommends JustFab Modify Advertising for VIP Membership Discount to Better Disclose Terms

New York, NY – July 13, 2017 – The National Advertising Division has recommended that JustFab,  Inc.,  modify advertising for the “VIP offers” made for its “Fabletics” activewear to clearly and conspicuously disclose the material terms and limitations of the advertiser’s  VIP membership program.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

NAD opened its inquiry as part of its routine monitoring program and requested the advertiser provide substantiation for claims made in connection with its VIP membership program.

NAD also considered whether the advertising at issue implied an offer for a discount on a customer’s first purchase, rather than an incentive offered for participation in a monthly membership program at a charge of $49.95 per month.

Fabletics advertises steep discount offers on Fabletics athletic wear for new VIP members.  As NAD noted in its decision, the advertisements vary, but they consistently offer a discount on purchases at Fabletics.com and indicate the discount is exclusively for new VIP members.

For example, one advertisement reviewed by NAD offered the following: “first outfit 75% off + free shipping,” and disclosed that the discount is a “new member VIP exclusive.”  The advertisement didn’t disclose the terms of VIP membership.

To use the advertised discount at Fabletics.com, a consumer must join Fabletics as a VIP member. VIP members receive notice that a selection of clothing has been reserved for their review and they must decide by the 5th of each month to either “Shop or Skip” – make a purchase or “skip the month.”

If a member does not shop or skip by the 5th of each month, the credit card on file is charged $49.95. That sum is applied as a credit to future purchases.

NAD questioned whether the advertising clearly disclosed the material limitations of the discount offer, specifically that VIP membership obligates consumers to opt out monthly in order to avoid repeated charges.

Following its review, NAD recommended that Fabletics’ advertising of its discount offers clearly and conspicuously disclose – in immediate proximity to the introductory discount offer – the material terms of the offer: VIP membership requires members to go to the Fabletics website to “skip the month” between the 1st and 5th of the month and either shop or skip to avoid a monthly charge of $49.95 per month and modify the advertising on the Fabletics website to clearly and conspicuously disclose the material limitations of its discount offers on the same page where the discount offers are made.

Fabletics, in its advertiser’s statement, said that it is “pleased to comply with the NAD’s recommendations and to update our advertising accordingly.”

“Even though we do not agree with all of the assertions contained in its decision, we support the work of the NAD and by implementing its recommendations, we hope to further advance our leadership in elevating advertising best practices in the ecommerce industry,” the company said.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.