There's A Shady Tactic Shopping Sites Use To Get Money From You Every Month, Even If You Don't Buy Anything

One-time shoppers, beware: There's a tactic being used by e-commerce companies that boosts their revenue by consistently charging your bank or credit account, even if you haven't purchased anything recently.

Startups like AdoreMe, a lingerie company that recently raised $8.5 million, and JustFab, a fashion accessory sales startup that's raised more than $80 million, all offer VIP accounts.

At a glance, the VIP accounts look like a steal. Items cost much less than the normal listed price and there's no initial membership fee. It isn't until you dig through the fine print – or notice strange charges on your credit card statements – that you notice something unexpected.

The VIP accounts are really just subscription services, sort of like Amazon Prime. The accounts give you free shipping, free exchanges for unwanted items, and discounts on several products. Memberships appear to be free at first, but the sites actually charge you about $40 (depending on the site) unless you buy something at least once a month or opt out of the service.

In JustFab's case, it is next to impossible to make a purchase without signing up for a VIP account. JustFab heavily promotes its VIP account and buries the option to buy stuff at the normal price. We've scoured JustFab and can't find a way to buy stuff without the VIP account, but JustFab's CEO Adam Goldenberg says it's possible.

For unintentional members, getting monthly charges refunded can be difficult or impossible. AdoreMe will return unwanted VIP subscription charges if a user catches them within 30 days. But it isn't easy to find out you're a VIP member until a credit card charge hits. AdoreMe's account pages show no sign of the VIP membership you've signed up for, even in your list of recent transactions. Other sites have a strict policy against returning subscription money.

You can't easily cancel your VIP account either. You have to call customer service and complain, and there's no "unsubscribe" option on websites. Sometimes it takes multiple calls before an account is finally canceled.

Morgan Hermand-Waiche, AdoreMe's CEO, admits there is industry confusion around subscription services. But he claims only 5% of his customers feel duped by his VIP service.

"By no means are we trying to catch people in subscription like JustFab does," Hermand-Waiche told Business Insider in an email. "We try our best to be as clear as we can and we explain both options at the check out. Sometimes, in the excitement of the purchase some customers don't really pay attention, but we are always A/B testing new ways of explaining to make sure most people understand it all."

A spokesperson for JustFab gave a similar response. "We make it very clear during the JustFab shopping experience and in many places on the site that if you choose to take advantage of the VIP membership prices, you are joining our VIP fashion service. Generally, our members understand the program that they agree to upon making their first purchase as a VIP member."

Hermand-Waiche says his team sends out multiple emails per month reminding members of their frequent need to take action or get charged. JustFab says it also sends reminders, and it flashes the VIP membership information multiple times before checkout. Both detail the programs in a "How It Works" section of their sites.

For one-time shoppers who don't realize what they've signed up for, VIP memberships are frustrating.

One person describes his girlfriend's experience on JustFab in a HackerNews message board, a popular forum for the tech community:

"Her friend emailed her a link to JustFab, then she bought a pair of shoes from www.justfab.com and never visited the website again. Only 8 months later, in early September, she was appalled to find out that her credit card has been charged a $39.95 fee for the last eight months. Yes, $39.95 for 8 months, without getting anything from JustFab."

Another JustFab user says on a Consumer Affairs message board that she purchased one pair of shoes on the site, then later realized she had paid nearly $400 in monthly fees:

"This company is a scam. In order to make a purchase, I had to create a JustFab account. After making the purchase I was automatically signed up for VIP membership...I was looking at my bank account activity and noticed they've been charging me every month even when I made a purchase. I called the manager and demanded a full refund for the 9 credit points, but received nothing."

There have been similar experiences with AdoreMe. One angry customer wrote in July on message board Site Jabber:

"I ordered two sets and I loved this company until they tricked me into signing up for a dumb 'VIP' access which was just them taking out $40 a month out of my account without me actually ordering and buying ANYTHING. I've been trying to get my money back, (now they've stolen $140 out of my account)…I hate Adore Me."

Most shoppers are unfamiliar with the subscription tactic, so it's easy to miss the warnings or fine print.

Here are some ways the sites try to explain the service. Notice the monthly charges aren't stated up front.

JustFab:

AdoreMe:

And another AdoreMe promotion at check out:

JustFab, which has 15 million members, may have the most aggressive subscription service. If you aren't a VIP member, it's nearly impossible to find an "add to cart" button for an item. VIP prices also look like one-time sales, not a discount you'll pay for later.

The membership service has benefitted JustFab, even if it has come at the expense of customers. CEO Goldenberg told Business Insider last week that most of JustFab's revenue comes from the subscription service. He expects his company will generate $400 million in 2014.

In the meantime, angry customers are getting louder on message boards.

"Good luck charging me, crooks! My bank is blocking all of your charges," one vents about JustFab. "Do not EVER sign up to this company!" writes another. "[It's] a complete scam!"