Unauthorized Internet Sales When starting this company in 1963, our founder, Mary Kay Ash , brought with her over 25 years of experience in direct sales. She knew the benefits that a direct sales business could offer and wanted to share that unlimited opportunity with women everywhere. She also knew that in order for this dream to become a real ity , her Company would need to offer top - quality products th at would be easy to sell. More than 50 years later, the Company Mary Kay Ash built is continuing to do just that – provid ing open - ended opportunities to women around the world and high - quality p roducts that customers love . While times have changed and advances in technology have made our lives very different, the fabulous products and personal connection and contact that can be offered to customers through a Mary Kay Independent Beauty C onsultant continues to make the Mary Kay business strong . What really distinguishes Mary Kay® is YOU – the Independent Beauty Consultant – and the knowledge, personal touch, and golden rule service that you bring to your business, as well as the long term relationships you build with your customers. T echnology has added new complexities and creates confusion for some regarding how new on - line tools and services fit with a direct selling business. This article is intend ed to provide some guidance on this issue. Let’s start with the basics: what is a direct seller? A direct seller can generally be defined as an individual who engages in the sale of a product or service, person - to - person, away from a fixed retail location. Based on this definition, it is clear that you cannot set up a retail store in a shopping mall or set up a booth at a flea market. But what about sales on the internet? It is the same rule. Sales of products on any website that acts as a fixed retail location (such as eBay, Amazon, Craig’s List and similar sites) fall outside of the direct sales definition and are prohibited under the terms of your Mary Kay Independent Beauty Consultant Agreement (“Agreement”) . Given how important the direct sales model has been to the growth of the Company and the success of your Mary Kay businesses, the Company is very serious about protecting your status as a direct seller . This is addressed in Section A.4 of your Mary Kay In dependent Beauty Consultant Agreement (“Agreement”) , which provides that you agree not to sell or display Mary Kay® products in or to “ public, retail or service establishments of any kind ( including internet retail or auction sites ) (emphasis added) .” This section prohibits Independent Beauty Consultants from selling or displaying Mary Kay® products at physical retail stores, but the prohibition also extends to the sale of products on internet sites such as Amazon, eBay, or Craig’ s List, even after the termination of their Agreements with Mary Kay. This provision is intended to help you comply with the legal definition of direct seller and also protects consumers and the Mary Kay ® brand. Despite this limitation, you can still have a vibrant on - line presence for your Mary Kay business. T he Personal Web Sites offered to you through Mary Kay are an efficient online tool that allows your customers to easily communicate with you about the products they are interested in purchasing, and when combined wit h other approved tools and services , it can offer a convenient online experience for you and your customers. Personal Web Sites w ere designed to provide you an online tool that is not a fixed retail location. Therefore, Personal Web Sites are currently t he only approved method to facilitate sales online. The Company is serious about addressing the unauthorized on - line sale of Mary Kay® products and is proactively working to identify sources behind the online product offerings, including looking at curren t and former independent sales force members who may be selling Mary Kay products on - line , either directly or by supplying Mary Kay ® products to others to sell . In an effort to protect your businesses, the Company has taken all steps necessary, including legal action against individuals and entities who are selli ng Mary Kay products on their websites. These efforts have already proven successful , and the Company has received information regarding hundreds of individuals who are selling Mary Kay® products on - line, some of whom, unfortunately, are current or former Mary Kay independent sales force members. As a result, the Company has terminated th e agreements of [ pending review of Amazon list ] of independent sales force members and initiated legal action against a number of individuals, including former independent sales force members. Please let your team and unit members know about the Company’s commitment to addressing the unauthorized sale of Mary Kay® products on - line , as well as in traditional retail stores, with the goal that they can prosper through the direct sales model , as Mary Kay Ash intended . It is very important that they are aware of the Company’s prohibition against the on - line sale of Mary Kay® products, because if the Company determines that they are selling on - line, their agreements with the Company can be terminated immediately . We appreciate your support as we continue to ad dress this issue. The following information answers many of the common questions we receive regarding the Company’s efforts to address unauthorized internet sales . We encourage you to share this information with your unit and team members, especially in light of the potential ramifications for an independent sales force member found to be selling Mary Kay® products on - line. Q: Why does Mary Kay prohibit sales force members from selling Mary Kay ® products on the internet ? The Company prohibits internet sales because they are inconsistent with and serve to undermine the Company’s direct sales model, which Mary Kay Ash introduced to create the unparalleled opportunity that Mary Kay independent sales force members have enjoyed and profited from for over 50 years. Through the direct sales model, you offer more than just products through your Mary Kay business; you also provide the knowledge, personal touch, and golden rule service that allow you to build long term relationships with your customers. This prohibition against on - line sales is also vital to protect the consumers of Mary Kay products and the Mary Kay ® brand, because the Company cannot ensure the safety, quality or authenticity of Mary Kay ® products purchased throug h on - line retail stores and such on - line purchases are not eligible for the Mary Kay ® Satisfaction Guarantee. Q: Why is there an exception for Mary Kay ® Personal Websites? Aren’t these on - line retail sites? A Mary Kay ® Personal Website is not an on - line retail store. Instead, it is one of the many communication tools Mary Kay has made available to you to interact with your customers. Personal Websites are intended to supplement, not replace, your personal interaction with your customers, and pro vide access to the products you offer 24 - hours a day. While a Mary Kay ® Personal Website may help facilitate communication between a customer and a Beauty Consultant about a potential purchase, the purchase itself is processed by the Beauty Consultant off the Personal Website, such as through the Beauty Consultant’s Propay® account. Q: What will happen if a Beauty Consultant sells Mary Kay® products on - line other than through a Mary Kay® Personal Web Site? A: Selling Mary Kay ® products in any fixed retail location , including internet websites, is a serious violation of the Independent Beauty Consultant Agreement. I f the Company determine s that a Beauty Consultant is selling products on - line, di rectly or through a third party, the Beauty Consultant’s Agreement with the Company can be terminated without further warning. Depending on the extent and nature of the Beauty Consultant’s unauthorized on - line sales , the Company may also take additional leg al action against the former Beauty Consultant, including filing a lawsuit. Q: Can I sell Mary Kay® products on - line through third parties ? A: No. Independent Beauty Consultants cannot sell Mary Kay® products on - line directly or through third parties. Mary Kay has filed several legal actions agains t on - line retailers and auction sites to force these stores to identify their source of Mary Kay® products. I f Mary Kay determines that a Beauty Consultant has been supplying products to these on - line stores for resale, the Beauty Consultant’s Agreements with the Company will be terminated in almost all cases . Q: Can I sell Mary Kay® products on the internet after the termination of my Independent Beauty Consultant Agreement? A: No. In Section A.4 of your Agreement, you agreed that the obligation not to sell products on the internet or through other unauthorized channels “survives the termination” of the Agreement . If you sell Mary Kay® products on - line after the termination of your Agreement, the Company may file a legal action against you. The Company has already filed several legal actions this year against former Beauty Consultants for selling products on the internet. Q: I promote Mary Kay® products on my Facebook Fan Page. Is this a violation of my Agreement? Absolutely not. A Facebook page is a great way to promote your Mary Kay business and the products you are selling, but you should link your customers to your Mary Kay® Personal Website, or have them contact your directly, to facilitate the pur chase of the products you are promoting. Q: I didn’t know I couldn’t sell Mary Kay® products on - line . What should I do ? Will my Agreement be terminated? If you have been selling products on - line in an unauthorized fashion , you should report such activity to Mary Kay’s Legal Support Team ((972) 687 - 1604 or legalsupport@mkcorp ) as soon as possible. While this is certainly a serious matter, coming forward on your own will positively influence how th e Company responds to the situation. You should be prepared to share with the Legal Support Team where, and under what name, you have been selling Mary Kay® products on - line. You will also need to provide evidence that you have deleted your on - line store or removed all Mary Kay products, and sign an agreement that you will never sel l Mary Kay p roducts on - line in the future. Any such reports need to be received by the Company before we contact you about your unauthorized on - line sales. Q: I have made th e decision to end my Mary Kay business and I have products leftover. Since I can’t sell these products an on - line , what should I do ? A: You can always sell these products directly ( i.e., not through an unauthorized internet site) to your existing customers at a discount. You can also take advantage of M ary Kay ’ s Product R epurchase Policy which provides that the Company will repurchase, upon termination of your Independent Beauty Consultant Agreement, at ninety percent (90%) of your origi nal net c ost, original and unused Section 1 products, provided such items were purchased by you from the Company within one (1) year prior to return. T o initiate a repurchase, you should contact the Company to obtain a Request for Repurchase form by calling 800 - 2 72 - 9333; press 1 for English or 2 for Spanish; then press 9 followed by 2 for the Repurchase Department. Q: What should I tell my customers who are buying Mary Kay® products at a discount on - line ? A: You can educate your customers regarding the pitfalls of buying product s on - line. First, they do not receive the personalized service you can provide to them as their Independent Beauty Consultant. Second, if they purchase products from an on - line site , there is no guarantee as to the quality or safety of the products. They have no way of knowing if the products are counterfeit, expired, or have been opened, used and/or stored properly to prevent damage. As discussed in a January 2014 press release from the FBI (insert link fbi.gov/news/stories/2014/january/counterfeit - cosmetics - fragrances - hazardous - to - your - hea lth/counterfeit - cosmetics - fragrances - hazardous - to - your - health ), the volume of counterfeit cosmetics and fragrances for sale on the internet is on the rise in the United States, and tests have determined that some of the ingredients in these counterfeit cosmetics are “downright dangerous,” including known carcinogens and dangerous levels of bacteria. You can share this very real concern with your customers. Finally, by purchasing from you, someone they know to be a Mary Kay Independent Beauty Consultant , they can be assured that they will be able to take advantage of the M a ry Kay® Satisfaction Guarantee. Unlike on - line retailers that offer a limited product guarantee or no guarantee at all, the re is no expiration date on the M ary Kay® Satisfaction Guara ntee. Q: Given the increase in enforcement, should we expect to see fewer Mary Kay® products for sale on - line in the future? We do expect our efforts to impact the number of products for sale on - line. But a s hard as we are working to address these unauthorized sellers, it is important that we set realistic expectations. Legal action is never a swift or easy process but we can assure you that we will not rest as long as unauthorized sales that can negatively impact your customers, your business, and the Mary Kay brand exist. Should you have any other questions, feel free to contact the Mary Kay Legal Support Team at (972) 687 - 5777 or via email at legalsupport@mk corp . We encourage you to share this information with your area, unit and/or team members. This Unauthorized Internet Sales article can be found on Mary Kay InTouch®, on the Legal page under the Resources tab .
Posted on: Sat, 19 Jul 2014 21:02:30 +0000
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