Online Retailer AdoreMe shows dark underbelly of rising popularity of the subscription business model

By Mrinalini Keskar ‘22

When YouTuber Twiggy Vittoria bought lingerie from online retailer AdoreMe, her first experience was positive. She placed an order, received a confirmation email, and received it in the promised time window.

AdoreMe is a subscription-based service, meaning customers pay a fee every month to have goods delivered to their doorstep. Knowing this, when Vittoria received her order, she logged into the account the website had automatically created for her, and cancelled her subscription. She went on with her day. 

The next month, Vittoria found a $39.95 charge from AdoreMe in her bank account. She went back onto AdoreMe’s website to check to see what happened, and to her surprise, she still had an account on the site, in which all her information was stored. 

“I look, and sure enough, it says I’m an active VIP member. There is seemingly no evidence of me ever cancelling my account,” she said in an extensive video review of the service. 

After “seven or eight back and forth emails with customer service,” Vittoria was finally able to cancel her subscription and get the $39.95 charge refunded. During this time, she realized she was not the only consumer who had had trouble with AdoreMe. 

AdoreMe currently has a C grade on the Better Business Bureau (BBB), which uses a point deduction system compiled of actions such as “Failure to Address Complaint Pattern,” or “Government Action.” There are currently over 832 complaints filed for AdoreMe on the BBB website. 

The company has even faced legal action. On Nov. 20, 2017, the Federal Trade Commission (FTC) charged retailer AdoreMe with $1.3 million dollars for violating the FTC act by deceiving their consumers. This was not the first time they had faced legal consequences for the same action - in 2016, a class action lawsuit was fired against AdoreMe. 

AdoreMe is an American lingerie online retailer based in New York City. It was founded in 2011 by Harvard Business School alumni Morgan Hermand-Waiche. The company operates on a subscription- based service: Each month, customers are emailed with the month’s styles, and a “Shop” or “Skip” option. If they click shop, they are billed $39.95 in store credit. If a customer does not want to purchase during a certain month, they are required to click the “Skip” option within the first five days of the month. If they do not click “Skip” within the first five days, they are billed $39.95. The company attracts users with less expensive styles, and customers are often enticed with the promise that their first purchase will be $24.95. In addition, AdoreMe carries a large range of sizes, from XS to 4XL. 

In comparison, a full price set from top lingerie retailer Victoria’s Secret will cost about $75 and up, where only sizes XS to XL are carried. 

The “Shop or Skip” business model seems simple, but if so, why have so many taken the time to file complaints on AdoreMe’s business model?

Some of the complaints on the BBB site read: “If I could give zero stars, I would. Probably one of the worst experiences I've had dealing with a retail company.” Other customers lament the automatically renewing payments and the lack of clarity on AdoreMe’s website about how to cancel. 

“This service automatically signs you up for monthly recurring payments for store credit, then makes you have to cancel every month. If you want to cancel altogether, they make it difficult to find how to do that on their website. Do not support companies that engage in deception for profit! As a democracy, it’s our citizen duty to not allow this or any kind of deceptive business practices into our economy! It damages and discredits the whole economic system,” another review reads.

AdoreMe usually responds to these allegations claiming that their cancellation and membership policies are made clear, and only a very small percentage of consumers have negative experiences with shopping. 

“Keep in mind that in 2015, Adore Me counted over 1 million purchases, which means that these 560 BBB complaints account for approximately 0.0005% of all transactions of the Adore Me website,” said founder Morgan Herman-Waiche. 

When checking out, customers have the option to sign up for a VIP membership, making their first purchase only $24.95, or “Pay as you go,” which eliminates the subscription aspect. However, this option does not have any discounts, so customers are often swayed into the VIP membership option by the less expensive price. 

In theory, AdoreMe’s business model, although frustrating for some consumers, should work. A consumer has the opportunity to press “Shop” or “Skip” each month, and if need be, they can cancel their subscription. Yet for many, cancellation is where the most problems begin.

Consumers such as Vittoria claim that even after cancellation, they still receive bills from AdoreMe. The cancellation process is difficult in itself: nowhere on the website is there a clear button where users can manage their subscription. To cancel an account, a user must go to AdoreMe’s FAQ page, where they must go through multiple steps to seemingly “cancel” their account. 

When customers have trouble cancelling their account, they are instructed to then email or call AdoreMe’s customer service. However, as Vittoria stated, their customer service often hangs up on customers, does not respond to emails, and takes a long time to follow through with cancellation or refund requests. 

There are multitudes of subscription-based services which are extremely popular, such as Netflix, Amazon Prime, as well as the thousands of subscription boxes which provide customers with unique items each month. Subscription services have allowed companies to take a more personalized approach towards their customers, delivering them customized products.  

However, many consumers want to be able to customize the subscription itself and to stop it at any point, without worry that their card will be charged afterwards.