On April 21st, the FTC issued a press release stating that Fashion Nova will pay a $9.3 million settlement, as it deceived customers about its shipping policy and issued store credit rather than the refunds that customers were entitled to.
Fashion Nova would advertise using language such as “fast shipping” and “two-day shipping,” but when they were unable to fulfill the shipment, the company would cancel the order and issue a store credit even though it was not the customer’s fault. According to the Mail, Internet, Or Telephone Order Merchandise Rule (the Mail Order Rule), companies are to issue prompt refunds when they are unable to fulfill an order as promised. A prompt refund is defined as “a refund sent in the form of cash, check, or money order, by any means at least as fast and reliable as first class mail, within seven (7) working days of the date on which the seller discovers it cannot provide a refund by the same method as payment was tendered.” This does not state that a store credit/gift card is considered a prompt refund.
The FTC’s complaint explains that companies are not to accept orders that they are unable to fulfill within the time that was clearly stated–such as two-day shipping. Fashion Nova should have offered customers the option to cancel their order and receive a refund through their original method of payment when they realized that they could not ship the order as quickly as they promised. The $9.3 million settlement will go towards the refunds of customers who received store credit when their orders were cancelled.
In December, I came across this The New York Times article (and wrote my thoughts about it back then, but never published them until now) detailing how underpaid fast fashion workers are–this article focuses on Fashion Nova specifically, but it’s the story of many other fast fashion retailers. A few pieces of the article really stuck out for me, and today we’re going to discuss why.
To keep them interested, Fashion Nova produces more than a thousand new styles every week, thanks in part to an army of local suppliers that can respond instantly to the brand’s requests.
“If there was a design concept that came to mind Sunday night, on a Monday afternoon I would have a sample,” he said.
This is an incredibly hard concept for me to wrap my head around. Over a thousand new styles every week? It seems impossible. Having a sample of a garment the next day? Also seems impossible. What happened to the six-month design cycle?
Personally, I believe having over a thousand selections on a retailer’s website is overkill. I wonder if every single style is actually being purchased. I wonder what quality control is like if there’s so many products available–and especially if a sample can be created within a couple days. How is it possible to truly know how much merchandise you have in stock when you’re releasing thousands of garments a month?
While Fashion Nova has taken steps to address the Labor Department’s findings, Ms. Meierhans, the brand’s general counsel, noted that it works with hundreds of manufacturers and “is not responsible for how these vendors handle their payrolls.”
Retailers who are invested in following their supply chain will have frequent audits of their manufacturers or create a clause in their contracts that forbid the manufacturers from outsourcing their work to a third party; the retailer can keep tabs on all the companies they’re working with. The most searched fashion brand in 2018 should be able to implement procedures that track their supply chain.
Fashion Nova made $484 million in 2018. For a company selling shirts for $5.99, that’s major.
The company’s lawyers told the officials that they had taken immediate action and had already updated the brand’s agreement with vendors. Now, if Fashion Nova learns that a factory has been charged with violating laws “governing the wages and hours of its employees, child labor, forced labor or unsafe working conditions,” the brand will put the middleman who hired that factory on a six-month “probation,” it said in a statement.
Instead of prioritizing the health and safety of their workers, the company is focused on preserving business relationships. Fashion Nova’s response to violating ethical practices and endangering factory workers is simply a probation. What does the probation consist of? What happens if the manufacturer is found to continuously violate laws? Are they performing audits? It’s not public information.
Fashion Nova’s website consists of a page explaining the California Transparency in Supply Chains Act, and this portion stood out to me:
Our relationships with vendors are based on lawful, efficient and fair practices. We expect our vendors to obey the laws that require them to treat workers fairly, and provide a safe and healthy work environment. We require our vendors to confirm in writing via a vendor agreement that they, and the factories they use, conform to these standards, and we maintain a file of these agreements.
They maintain a database of agreements.. Um, okay. There’s so much more that could be done.
Fashion Nova is a company that just couldn’t keep up with its level of demand and it ended up costing them millions of dollars. This is a great example of what happens when fast fashion gets out of control.
As a reminder, I’m never here to shame you guys for your purchases. I’m simply here to inform. If you shop with fast fashion companies, I simply ask you to consider the workers and what they sacrificed to make your garment. Don’t throw it away after one wear. Buy your clothes to continually wear them–consider them as investments.