Cosmetics company Mary Kay has sued coupon aggregator RetailMeNot for allegedly perpetrating a “fraudulent Mary Kay couponing scheme” by offering invalid discount codes.
Mary Kay says in its lawsuit that it doesn't sell products to consumers through its Web site. Instead, the company says it sells products to independent “beauty consultants,” who sell the company's makeup to their customers.
The complaint alleges that RetailMeNot dupes consumers by displaying coupon codes for Mary Kay products on its own site, in its newsletters and through Google search ads. Mary Kay says that displaying the discounts “misleads consumers” into thinking that Mary Kay has a relationship with RetailMeNot, and also tricks people into thinking that products “can be purchased directly from Mary Kay at a reduced price,” Mary Kay alleges in a complaint filed Friday in U.S. District Court in Dallas.
RetailMeNot's coupons come from a variety of sources, including retailers, brands and consumers. It's not clear who submitted the alleged Mary Kay codes at the center of the lawsuit.
Mary Kay alleges in its complaint that it unsuccessfully asked RetailMeNot to remove the “infringing material,” in an attempt to settle the dispute informally. The lawsuit alleges that RetailMeNot engages in false advertising, trademark infringement and unfair competition, among other counts. The company is seeking damages and an injunction prohibiting RetailMeNot from offering the coupons.
As of Monday, the discount side didn't appear to offer any coupons for deals at Mary Kay, but allowed consumers to sign up for notifications of offers from the company.
RetailMeNot said in a statement that it believes the lawsuit's allegations are without merit, and that it will vigorously contest the case. “RetailMeNot, Inc. continues to believe that it operates in compliance with law and in the best interests of consumers and its retail partners by aggregating information to help shoppers save money using its websites and mobile apps,” a company spokesperson stated on Monday.
Advertising law expert Douglas Masters of Loeb & Loeb says the outcome of the lawsuit could depend, in part, on whether consumers can ever use online codes to purchase discounted Mary Kay products. If the codes never work, Mary Kay potentially has a cleaner case, he says.
But if coupon codes were submitted by other retailers or contractors who honor them, the company could have an uphill battle in court. “It wouldn't be up to RetailMeNot to know whether a code violates an agreement between Mary Kay and one of its contractors,” he says.