1. So their claim is that the IBC contract is in perpetuity? That once you sell your soul to the pink devil, they can tell you what to do with all that product after you give up with shelves full of it?

   And even after you can no longer buy product from them, or get commissions from them, they still can control your actions?

   That’s a stretch of contract law, but if they are coming after individuals, their lawyers can convince the other that they have to cave in or go broke.

   • So far it looks like none of the defendants (except Allison and Amy) have hired lawyers. Mary Kay can basically get whatever they want, because the pro se defendants have no idea what they’re agreeing to, but just want the lawsuit gone.

2. Maybe next MK will try to sue those who purchase the drek from these ebay sellers for receiving unauthorized product? Tongue-in-cheek, I know but still…..

   • Well they are demanding from each of the sellers the information for anyone they have PURCHASED products from. i.e. They are making it seem like they are going after the people who sold things to the product liquidators too. *sigh*

3. Yea. That’s definitely the strategy. Gee. I wonder if at the next guest event, with all those smiling faces clapping for that Grand Pink PooBah, telling her tale of success, will they mention that you’ll be in business for yourself, but not BY yourself, because Mary Kay will OWN you?

   • Honestly, I have never read such ba humbug stuff. I am a Mary Kay consultant and absolutely love what I do and the company is very good to its consultants, whether they do it 2 hours a week or full time. I do not like seeing products on Ebay and praise the company for doing something about it to protect its consultant,,,, the pink truth…. must be someone bitter and scroogeish, I mean really what is your point here to try to destroy a company… ? Not going to happen.

     2

     • Hi Barbara – Thanks for commenting on this article that was posted SIX years ago! You can read more about our purpose here: http://www.pinktruth.com/about-pink-truth/

     • We don’t have to worry—MK is destroying itself. $70 sheet masks, an Applause magazine that reflects falling numbers, fewer attending Career Conference, “first time” Red Jacket recognition in Applause…it goes on and on. The more I’ve read on here, the further I’m convinced I made the right decision. The products are outdated (only 6 cheek colors—really??), and the corporate staff you think are Godly are not. (Hello, Sean Key.)

       How’s that Seminar push and expenses look for you? So glad I don’t have to go to that hot mess anymore! And those new mauve Director suits? I’m so relieved I don’t have to fake excitement for it to my unit anymore.

       1

4. Does anyone know if Mary Kay is the only MLM doing this? I was in another soul-robbing company, and I have not heard of any others doing this, even though they probably could. I would guess that the majority of consultant agreements look the same? Just curious…

   • I know for a fact Aloette skincare and cosmetics does not allow consultants to sell on e-bay, active consultant or not……. But at least I was told that up front to my face when I was being recruited. Also, Aloette does not frontload consultants with inventory…… not praising them, just FYI. I was stuck with products I had on hand “just in case” that I cannot move now. Not sure about any of the others MLMs.

   • Arbonne does it

5. If I were a liquidator, I’d make my language just revealing enough for people to know what company I was referring to without actually mentioning anything that could point to Ash’s recruiting racket.

   “Makeup and skin care products, all new in the original, very-light-shade-of-red-colored boxes! We can’t tell you the name of the company they came from, but we bet that your Aunt Mary and Cousin Kay have pallets of the stuff in their garages and are SO EXCITED to go give it away! Hear our hearts: contact MLM Liquidators today and stock up!” 😀

6. They will probably be making product changes to raise $$ to offset legal fees.

7. Mary Kay encourages its consultants to put “win a free makeover” fishbowls in public places and to dress up in the official costume then go out into public stores and parking lots to troll for customers. So public advertising is condoned, as long as it’s done in stealth mode. Curious how the same company is suing folks for other types of public advertising.

   That’s a really twisted corporate mindset. You’re allowed to walk around in your Mary Kay costume at a public exhibition and “bump into” people, and sell the stuff from your car trunk in the exhibition hall parking garage. But you’re not allowed to buy vendor table space at the exhibition and openly retail your wares???

   The unethical sleazy-ness of that whole approach is just icky. Reminds me of street hustlers: “Pssst. C’me’ere buddy. I’ll sell you a genuine Rolex for $50, and Mary Kay lipgloss for $10 for your wife!”

   • The ibc and sd and nsd are FREE walking advertisements/recruiters for more advertisers for the mkcorp.

     Not only that, the before mentioned even purchase samples and beauty books to advertise for the corporation to advertise for them.

     Not only that, the before mentioned actually purchase the products they are advertising at a huge mark up, to sell, so the before mentioned can supply herself with monies TO advertise for the mk corp and to pay for her expenses, training to advertise/recruit for the mlm corp.

     The ibc, sd, and nsd are basically volunteering to advertise for mkc. This is a fact based on their 1099 and schedule c tax information, and my personal experience.

     • And the non-free, pink caddy and the other MK car advertisements

   • This is so true people should fight back but won’t and that is why they are getting away with stealing. Not only do they block you from selling which is reidiculous.

8. Just goes to show: you can’t live on an income from MK, and you sure can’t make enough to go to court with them either.

9. This is also more proof that Mary Kay sees the IBC as the end consultant.

10. with the company not tracking sales from customers, could it be proven that a consultant is the customers to the company? And if this is proven and the sales are made with retail tax, can it be proven that once the product is purchased from the company it is private property? Are there laws to protect people who sell their private property? THis is rediculous!

    • Interesting premise.

    • This whole retail sales tax thing has always struck a sour note with me, because what MKC (presumably) reports to the state taxing authorities never matches up with what the consultants report. Consequently, MKC is making it look like the consultants are under-reporting their income. Here’s why:

      1. Miss Betty Consultant purchases $2000 in inventory. MKC collects tax on $4000.
      2. MKC reports, on behalf of Betty, that she had retail sales of $4000, and sends the state a payment for tax on $4000. So far, so good.
      3. Betty files her income tax return. In part 1 of her Schedule C she reports (truthfully) that she only sold $500. Betty claims $2500 in expenses (again, truthfully), resulting in a Schedule C net loss of $2000 which transfers over to her 1040.

      Now the problem:

      4. The federal and state taxing officials share records. Someone compares the two tax returns. The MKC return does not match Betty’s return. If the document filed by MKC is correct, Betty should have reported income of $1500 ($4000-2500 expenses) instead of a $2000 loss. And Betty should have paid income tax AND self employment tax on $1500.

      5. Betty is in a heap of trouble with the federal and state income tax authorities.

      How come we never hear about this?

      • It’s because MK reports the sales tax as “prepaid sales tax”, not as “sales”

        • Oops, sent too soon.

          “MKC reports, on behalf of Betty, that she had retail sales of $4000, and sends the state a payment for tax on $4000.”

          No, MKC reports “Betty bought product for resale with a retail value of $4,000 and here’s the tax we collected for you on that amount.”

          • OK, that makes more sense.

11. I noticed 2 things. First, MK is only going after people on Ebay. I’ve seen MK products on alot of other sites that are not controlled by MK. Second, If you are not a former or current consultant, how can they expect you to know or obey their rules about selling? It’s none of their damn business!

12. My question is……..why are there tons of Mary Kay product going on sale cut rate thru the internet (auction) when the product is supposed to “fly off our shelves” and “the products sells itself”?

13. I just feel like if I bought the inventory then it’s now mine and I can do whatever I want with it.

14. Current consultant? Yes, I can see why they’d have their knickers in a knot about current consultants and directors selling on ebay. FORMER consultants? I just wonder if corporate would rather pay out the nose with all those chargebacks. You know, former consultants or liquidators selling via ebay and other (yard sales?? oh! the nerve!!) are actually keeping corporate from having to shell out those blue checks.

    They just aren’t very smart, now are they?

15. Can they sue if we advertise that we are just giving it away?? It would be a funny social experiment to see what they would do.

16. Has anyone ever filed a class action lawsuit against Mary Kay based on gross misrepresentations about the marketability of their products, and how those misrepresentations were used to goad consultants into overpurchasing unsaleable and unreturnable inventory?

    I can just imagine the late-night cable TV lawyer ads.

    • I do think that if Amy or Allison win first then a class action suit is possible because of what their testimony and defense in their counter suits and the such. it should be very interesting.

    • Not to date. Mary Kay uses their old “independent distributors” claim to hide behind. They can’t control those rogue sales directors who are saying bad bad things! They told them not to lie!

    • It would probably be easy to overcome the “rogue SDs” objection. If I remember correctly, inventory frontloading techniques like “can’t sell from an empty wagon” and “profit level inventory” originated from Mary Kay herself. Aren’t they taught at MKC-sponsored events like Seminar and Career Conference, and openly taught by the NSDs without objection from MKC? Combine that with MKC celebrating the Queen of Ordering as the Queen of Sales and the complete disregard for actual sales results. A smart lawyer should have all the fuel he needs for a very lucrative class action settlement.

      A lawyer filing a class action lawsuit could jointly name MKC and its NSDs as co-defendants. With 500,000 women being recruited into Mary Kay every year and the same number quitting, the numbers of people injured certainly warrant consideration.

    • Class action suits are VERY HARD to get certified, move very slowly, and no one gets anything except the lawyers. It’s a dramatic idea, but there are more effective ways to take MKC down legally and with no expense to the IBCs.

      Knock a few of the supporting ranks out from under Corporate, with some publicity, and others who have been wibbling on the edge might decide to jump ship.

      An easier legal action would be for a recently exited IBC to take her evidence for business fraud against her recruiter, SD and the SD’s upline to her state’s attorney general’s office and talk to the business fraud department. They are paid for already and prosecuting business fraud is what they do.

      All the recruiting and training documents, the e-mails, the newsletters, the YouTube videos, the withholding of critical information until the contract is signed, … they show a pattern of fraud.

      ===========
      Or … if you know your SD was playing fast and loose with her income, report her to the IRS with enough information that they can do an audit.

      Things I have seen … having IBCs hand over cash for conference fees, or when collecting donations for a charity, having the IBCs give the director a check made out to the director (who then may make the donation, but under her name, not the IBC’s name).

      And all the illegal deductions they teach, they probably preach, such as deducting 100% of a family vacation because they had all the inlaws in the kitchen for a Satin Hands demo.

      ==========
      And the commonly taught practice of charging sales tax as if it were on full retail price when the product is discounted is ILLEGAL in most states. They are supposed to collect on the retail price, and do the paperwork to get back the rest.

17. Kinda makes you wonder why unions haven’t discovered mlms yet, hmmm?

    It’s ripe for the pickin.’

    • To my knowledge, there aren’t any unions for people who run their own businesses. Convenient, hmmm?

18. Tracy or someone who might know this
    how about if you are technically not selling and people give you donations,
    For example if an ex IBC can’t return old inventory because it has been longer than 12 months. and if she tells people that a cleanser doesn’t have a price on it but she would accept donations
    Could MK do anything to this IBC
    I hope I made sense.

    • There’s a difference between form and substance. When you’re dealing with courts and lawyers, they often look beyond the “form” of a transaction to test its “substance.” They want to find out what it really is, not just what someone is calling it. (Don’t pee on my head and tell me it’s raining…)

      The “form” of your transaction may be “accepting donations.” But unless you are willing to let the minimum acceptable donation be zero for anything, the “substance” of the transaction means you are still selling. In that case you are merely setting the minimum price at whatever you call the “suggested donation.”

      Read your Consultant Agreement again, and any paperwork you got when you terminated your contract. See if there is a clause that says a former consultant can not sell the MK merchandise she still owns and which the company refused to take back.

      I don’t think there is such a clause. I only see clauses restricting where you you can sell your MK merchandise and how you can advertise it.

      The closest I have seen to such a “can’t sell your leftover inventory” restriction is on page 15 in the Mary Kay Emeritus Guide. http://www.pinktruth.com/companydocs/NSDEmeritusGuide.pdf
      Mary Kay may want to maintain the posture that a former IBC or Director can’t sell her leftover stock, but that Guide is not a binding legal document.

      1

      • I’ve seen people try to get around the rules by saying “the merchandise is free, but there’s a high shipping charge.” That doesn’t wash. Form vs. substance again. A court would rule that such merchandise is not free, and the real price of the merchandise is the dollar amount which exceeds normal and reasonable shipping charges.

        1

        • I don’t have any inventory left over I got to send all my stuff back years ago but I have seen this go on before and the IBC was trying to get around the rules.

19. I think the whole thing is ridiculous. They tell us its OUR business to Di what we want with, we answer to nobody but ourselves, that what they say to get is to sign. Then once we are signed they talk us into buying $3600 (wholesale) of product that we can’t sell of and btw u better place an order of 200 every three months or you lose your discount. Then they have the nerve to tell us where and how we can sell our product that we own for OUR BUSINESS! Phooy what happened to the whole its YOUR business line of bull!

20. That’s a $200 wholesale order. Sorry for the typos I’m on my phone and its late.

21. What about Amazon.com? There are more MK listings there then anywhere I’ve seen online. I’ve noticed that people on eBay are auctioning off MK gift cards and coupons that can only be used on their personal MK site. The eBay customer gets a legitimate MK product from the legit MK site that is not expired or discontinued, and they still get a discount. Meanwhile, the only thing that is being sold on eBay is a item of the sellers own creation. And people were bidding on them too. What do you think about that?

    • I’m wondering if you’re an angry consultant CeeCee. I just looked on ebay and there were 52,300+ listings for Mary Kay. Of the first 50, 49 were for product and one was for Red Jacket Barbie.

      I bought assorted Mary Kay items on ebay for 10 years. Every bid was for MK product someone was trying to unload. Every time I paid around wholesale price or less and the item wasn’t swamp water poured into a MK container.

      You make it sound like all that is available on ebay are gift cards or coupons. Nothing could be further from the truth. As for Amazon, people are trying to get rid of their MK crap any way they can, and that includes Craigs List.

      I would ask that you stop lying and explain if you will, the point of your post. Thank you.

      • If you were reading more closely instead of jumping to conclusions, you may have typed a less douchy post. It sounds like CeeCee was asking if selling gift cards on eBay and similar websites would also be illegal in the courts of MK. Correct me if I’m wrong, CeeCee, but that’s what I got out of it. I also wonder if that would be against the rules. Any legal-minded people out there have a thought about that?

22. Here’s an email recently being sent by a Mary Kay watchdog to sellers of MK on ebay:
    It is a violation of the mary kay user agreement to sell on ebay, amazon, groupon, tophatter or any other site of this nature. Even if you are not the seller, multi-level marketing is against Mary Kay’s company policy as well and you, and the consultant if you are not one, are in violation. I have contacted Mary Kay’s Legal department and plan on contacting ebay today. I suggest that you remove your mary kay items immediately to avoid further action.

    • I’d report whoever that was to eBay for issuing idle threats.

23. Oh this is lovely. Call a “re” seller a multi-level and misdirect the ACTUAL truth that Mary Kay ITSELF, is multi-level marketing.

    These are some of the craftiest bastards on earth.

    So you buy your boatload of overpriced Mary Kay, try to move it, fail to do so, get tricked into recruiting ( ” where the “real” money is”), hang on, get tricked into over ordering to bump your commission up, hang on, get tricked into “topping off” to meet quotas for prizes or “promotions”, and then you have to DIE with it because you best not SELL IT to anyone who wasn’t sitting at your neighborhood MK ROCKS Party!

    Oh my God if people do not see what this scam really is they are deaf, dumb, blind or all of the above.

24. So this has been happening for a while! I guess I shouldn’t feel bad that Mk just threatened to sue me for reselling their product. Sad thing is they dont realize that people dont want to pay retail for their crap. If they did then they wouldn’t go looking for the bargain. MK is shooting themselves in the foot and its about time the people they attack band together and fire back at them. Bullying is against the law in some cities and states. Why is MK allowed to do it?

    • MK knows perfectly well that people don’t want to pay “retail” for their product. They’ve always known. And they don’t care, because they get all their money at the “wholesale” level.

      What they’re banking on is that they can convince uninformed women that there IS a viable “retail” market. That way they can convince these gals to pay “wholesale” price for large inventories, just like they’ve always done. And one of the ways to do that is to suppress the closeout resellers from exposing the fact that there’s no viable end-user “retail” market

25. I would have yard sale after yard sale with an ad in the paper about there being boatloads of MK for sale. Then I’d hit farmer’s markets and every other market known to man. Let them chase me to hell and back.

26. I have received one of these letters as well. I was one of the new consultants told that I should have $3600 of inventory on hand “just in case”. So I did. I had it over the 1 year allotted by MK and of course wouldn’t take it back. How did they help me succeed? Did they want me to dump it all in the garbage? How is that for our environment? However, it was okay if I wanted to give it all away.

    Now after they dropped me as a consultant I have tried to sell it by other channels. They have made a profit from the product I bought but they are denying me to at the least recoup part of my money. And, as for people buying and reselling it, once again, they have already made their profit and they should be glad that it is going to good use. Also, taxes are being paid on the income that is made from selling the stuff which is good for the economy and keeps it out of the landfills. While

    I can understand that they want to protect their consultants, the bigger picture is they want to control the product even after they sold it. They are sure not the company I thought they were…they’re just like every other money-hungry MLM where only the people at the top get rich!

27. Like you, bopeep and Fed Up, I received a letter letting me know I was violating the contract by trying to sell the thousands of dollars of old inventory I was suckered into buying over 15 years on Ebay and Amazon. My contract, however, did not say anything about selling on the internet.

    My feeling is the same… I have paid for the products free and clear. MK has received their money, the IRS has received THEIR money, and I should now be free to do whatever I want with the products. I’m not opening a store, buying inventory to sell online, or promoting myself as a company representative. I am simply trying to recoup some of the money I spent on products that no one was interested in purchasing.

    Instead of spending tens of thousands of dollars in legal fees, MKC should consider reinvesting some of that money into updating their sales model. They can’t stop people from selling products online. They should embrace the fact that their products are being sold and the name is still out there.

    Someone mentioned in another thread that there’s no guarantee the buyer is receiving actual MK products when purchasing online. I don’t know about you, but I know when I buy something from Ebay I adopt the attitude: Buyer Beware. I expect there to be expired items and some unscrupulous sellers, yet it’s still a great place for people to sell their items to a larger audience. I had a very difficult time approaching people at Target or the local grocery store. It was not well received!

    Wake up, MKC, and update your sales model!

28. Does anyone know whatever happened to the Allison LaMarr and Robin Dunda lawsuits?

29. I have a question! I am an inactive Mary Kay Consultant with a HUGE inventory. Pushy Director and what not!! I need to get rid of it but don’t want to do the buyback because I still want to be able to get my prodcuts at cost once a year when I order. I am trying to sell my inventory on my facebook page for 40% off. This is legal correct???

    • By “legal” do you mean to ask if it’s a violation of your consultant agreement? Ask Mary Kay. They have strict rules about what you can post online, and my guess is that you’re violating the agreement the way you’re doing it. But your best bet is just to ask Mary Kay.

      If you want cheap MK products, buy them off ebay. Get your money back on that HUGE inventory right away, and buy things off ebay later if you want them.

30. “I still want to be able to get my prodcuts at cost once a year when I order”

    But don’t you have to order every three months to be able to buy at cost? I think the once-a-year-order is just to remain a MK consultant, and you’ll pay retail.

31. Well my fiancé just recently came across this problem where she was threatened to have legal action taken against her for attempting to sale Mary Kay products. However according to The Supreme Court here in the States we have something called the “first sale doctrine.” It simply means that once a tangible copyrighted work (or something with copyright in it) is sold lawfully the first time, the original copyright owner no longer has rights over the physical item. After that, the buyer can do whatever he or she wants with it — sell it again, donate it, whatever. So please don’t allow Mary Kay to bully you into believing you’re doing something illegal.

    • Jay – While I agree with you that people are free to sell MK products where and how they like in the U.S. ….. Mary Kay has much deeper pockets than anyone selling the products, and they know it. They know these women can’t afford to fight the lawsuits that MK brings against them, so it’s much easier to stop selling the products.

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