According to a new federal court complaint filed by Mary Kay, Inc., online deal site RetailMeNot has tricked consumers with a “fraudulent couponing scheme” by offering coupon codes for the cosmetic and skin care company’s products.
RetailMeNot, which purports to operate the “world’s largest digital coupon marketplace,” features a Mary Kay merchant page with various offers and coupons on its Web site, and even provides a link to submit coupons directly.
The company argues that codes—posted on the defendant’s Web site and touted in Google search ads—mislead consumers into believing the site has a relationship with Mary Kay, and that they can purchase products from Mary Kay at a discount.
“In essence, RMN is running a fraudulent Mary Kay couponing scheme,” the complaint alleges. “By listing these purported Mary Kay ‘sales’ and ‘codes’ on its website, RMN misleads consumers into believing that Mary Kay has a relationship with RMN, that Mary Kay products can be purchased directly from Mary Kay at a reduced price, and that the coupon ‘codes’ are legitimate. In short, RMN’s use of the Mary Kay marks implies that Mary Kay has endorsed or approved of RMN’s activities, which it has not and does not.”
In reality, Mary Kay sells its products to “beauty consultants” who in turn sell the company’s wares to consumers. The company’s success can be attributed to this “carefully designed” direct sales business model, the company argues, and RetailMeNot presents a fraudulent image of Mary Kay because the company “does not publish or distribute Mary Kay coupons or discount offers to the general public or permit others to do so.”
Mary Kay has already received multiple complaints from beauty consultants who have been pressured by consumers to accept the unauthorized coupons from RMN’s Web site, which, in the company’s view demonstrates that consumers are confused.
The complaint alleges that RetailMeNot has infringed Mary Kay’s trademark and has engaged in false advertising and unfair competition. Mary Kay seeks injunctive relief and monetary damages.
To read the complaint in Mary Kay Inc. v. RetailMeNot, Inc., click here.
Why it matters: The complaint does not identify the source of the coupon codes that appeared on the defendant’s Web site, and RetailMeNot issued a statement that it intends to fight the lawsuit. “RetailMeNot, Inc. continues to believe that it operates in compliance with law and in the best interests of consumers and its retail partners by aggregating information to help shoppers save money using its websites and mobile apps,” the company said.