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Why can a scam company raise $40 Million Series C + $76 Million Series B?

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Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#101

Post by tiatia »

Semaphor wrote: post #67
jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

I'm not 100% sure but I think this site would not be allowed in Germany because of consumer protection laws. In that regard it's very telling that justfab.de has a very different checkout: http://imgur.com/uIZ5JX3

But I am. It is illegal, to automatically opt-in for such a service during check-out.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#102

Post by tiatia »

phyalow wrote: post #5
wenxun wrote: post #2

Some people asked why it took her 8 months to find out [3]: she was studying for her Master degree in the US, didn't have a SSN, was using a credit card issued by a bank in her home country, her father paid the bill for her at home and didn't notice anything unusual until she finished her study and came home to look at the credit card bills. [3] https://news.ycombinator.com/item?id=4592778

Total scam.

Yes, great Business. Great ROI if your are into it ;-)

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#103

Post by grey-area »

jdh wrote: post #42
karterk wrote: post #29

Earlier quoted context omitted.

Not the OP - but I did take a look at that page, and I do find it misleading. The "checkout as a regular member" is in a small font on the sidebar, while the main CTA is big, bold and defaults to the VIP program. The part where you're told about the monthly fee is in the last sentence of the sidebar. I had to practically hunt it to find it - for most people shopping online this will be oblivious. By giving the screen…

I don't accept the word "misleading" -- I do not believe the page in any way misleads. It does not try to position it as anything other than a subscription, and the language is plain english. Could they put the subscription details in bold? Could they use a larger font than all the other text? Sure. It's a tradeoff, for sure, and every retailer has to optimize their site to perform. Could they pop up three boxes afte…

You shouldn't have been downvoted here, but the mob has been angered! I'd encourage you to ignore the insults and consider carefully the other feedback - there are some good points made here by people coming to the pages for the first time.

Re your point above, What they could do which is very simple is to change the button text to 'Subscribe'. If you'd be reluctant to do that, ask yourself why that is? Why can't you tell the truth here with the button text?

Is it because it would put people off? If so you (I'll use you for the site) need to explain to them what they're getting and make them want it, not try to hide what they're getting and make it seem like they're buying when really they're subscribing.

Someone thinking "damn, that's a hot pair of boots for $40", should also be aware that it's not really for $40, it's for $40 each month for x months, with the promise of more boots to come. If they want that, you should be able to tell them that right beside the Buy button.

Personally I'd give them a choice of high price to buy or lower price to subscribe, as I think that succinctly sums up your value proposition to customers, AND makes it clear what you are selling (you are not selling just a pair of boots). In fact I've just seen below in an image someone linked that is exactly what you do on the German site:

http://imgur.com/uIZ5JX3

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#104

Post by triangleman »

drakaal wrote: post #3

Most of you are too young to remember, "Buy now and we'll send you CD's each month for just $9.95 per month, keep only the ones you want, cancel anytime" This is the same thing. It may feel scuzzy, but they do tell you this up front, and while they hope you forget, it isn't a scam, it is just preying on the uninformed.

This is also how Joe "Girls Gone Wild" Francis made his millions.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#105

Post by mmvvaa »

jdh wrote: post #26
seferphier wrote: post #14

Wow, they have a lot of negative reviews. http://www.consumeraffairs.com/online/justfab.html

Oh for god's sakes, did you even look at the site you just linked to? A site that gathers negative reviews to get companies to pay them> Did you read Amazon's review -- 1 out of 5 stars with 690 reviews, worse than JustFab's? http://www.consumeraffairs.com/online/amazon.html I'm sure you'll enjoy 1SaleADay, with 5000 reviews and a 4 star rating! http://www.consumeraffairs.com/online/1saleaday.html

Are you really going to try to keep repeating yourself in an attempt to compare this shady business to amazon?

Amazon is in it for the very long run (they just turned a profit this year). Good luck trying to continue to dance this song to the tune of amazon. It won't last. It is likely a legal practice, and your background might blind you into believing that unintended actions by well-meaning consumers is a perfectly reasonable business model to profit from (at least it is more transparent in the beating industry). At least you know that you are in it against the house, in most cases.

Shame on you.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#106

Post by bowlofpetunias »

jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

You've just demonstrated exactly what a classic scam looks like online.

"It's in plain English" doesn't compensate for the fact that it's a small print sidebar and everything else looks and feels exactly like a regular shop.

Tricking people into getting a subscription via the small print is one of the oldest dubious business models around. Companies like JustFab disgust me.

I will make an effort to avoid you and Matrix Partners. I don't want to be near investors that justify such unethical tactics.

Yes, I'm sure you've done plenty of due diligence. You just lack ethics.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#107

Post by espeed »

weland wrote: post #60
jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

This is an old business practice that I remember from when I was a kid. There were a lot of second-rate publishers (books, in this case, but it worked for pretty much anything) which basically worked on a "buy a book now, and we'll send you a new one each month for ". But you had to specifically opt out of this, which was done by ticking a very small box in the corner, in which case the prices for a single order woul…

On the checkout page, they are applying the type of behavior design/economics research done by Dan Ariely at MIT ("Predictably Irrational" http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_o...) and the Stanford Persuasive Tech Lab (http://captology.stanford.edu/).

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#108

Post by downandout »

jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

I'm curious if, during due diligence, jdh and the other investors were given access to Justfab's chargeback rate on the subscription fees, and whether/how many merchant accounts maintained by the company have been shutdown. Having just looked at the site, I would definitely be misled by this, but that doesn't necessarily mean their core customers are.

Math doesn't lie: if chargeback rates are higher than e-commerce norms, then this continuity program is misleading. If they are not, then the program isn't misleading. I cannot possibly see how chargeback rates wouldn't be astronomically higher than the e-commerce average, but maybe I'm just not their target customer.

I would love to see a response to this comment with their chargeback rates for the subscription charges but I doubt I will get it.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#109

Post by ddebernardy »

jdh wrote: post #26
seferphier wrote: post #14

Wow, they have a lot of negative reviews. http://www.consumeraffairs.com/online/justfab.html

Oh for god's sakes, did you even look at the site you just linked to? A site that gathers negative reviews to get companies to pay them> Did you read Amazon's review -- 1 out of 5 stars with 690 reviews, worse than JustFab's? http://www.consumeraffairs.com/online/amazon.html I'm sure you'll enjoy 1SaleADay, with 5000 reviews and a 4 star rating! http://www.consumeraffairs.com/online/1saleaday.html

Hehe. To that site's credit, its business model is just as scummy as JustFab's.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#110

Post by CRidge »

jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

People scan web pages - they don't read them. Especially in a typical scenario like this, you just check that you've ordered what you thought and look at the price and move on the the wizard.

I looked at the picture you linked to, and even when I knew what I was looking for, I spent at least 5 seconds before I noticed the VIP membership. 5 seconds is more than I'll use on a step like this when purchasing something.

In my mind this is a scam and I will not recommend anyone to use this site. Don't get me wrong - I like the business idea in general, but there should be an option during checkout where you have to actively choose if you want to be a member or not. Anything which cost you money (especially recurring fees) should always require an active action from the customer!

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