A Message to our Clients about Epic Rewards

[sephoraadmin2]

Sephora is committed to offering our valued Beauty Insiders exceptional rewards to thank them for their loyalty and for being part of our community.  Yesterday we held an Epic Rewards promotion, and while we have held similar promotions in the past, yesterday’s promotion was the largest number of Epic Rewards we have made available to date.

Despite our best efforts to predict the response, demand was overwhelming, resulting in our being out of stock very quickly. We deeply regret this and apologize to our Beauty Insider clients who did not get a chance to participate.  

At Sephora our first and foremost priority is to give our clients an exciting and fulfilling shopping experience.  Those Beauty Insiders who were unable to get one of our limited quantity Epic Rewards, please email us by Tuesday, August 25, 2015, to epicrewards@sephora.com and include your Beauty Insider account number or email address associated with your account. 

Beyond that, please know that we are committed to learning from this experience. Thank you for your ongoing support. We greatly appreciate you.

Sephora is committed to offering our valued Beauty Insiders exceptional rewards to thank them for their loyalty and for being part of our community.  Yesterday we held an Epic Rewards promotion, and while we have held similar promotions in the past, yesterday’s promotion was the largest number of Epic Rewards we have made available to date.

Despite our best efforts to predict the response, demand was overwhelming, resulting in our being out of stock very quickly. We deeply regret this and apologize to our Beauty Insider clients who did not get a chance to participate.  

At Sephora our first and foremost priority is to give our clients an exciting and fulfilling shopping experience.  Those Beauty Insiders who were unable to get one of our limited quantity Epic Rewards, please email us by Tuesday, August 25, 2015, to epicrewards@sephora.com and include your Beauty Insider account number or email address associated with your account. 

Beyond that, please know that we are committed to learning from this experience. Thank you for your ongoing support. We greatly appreciate you.

**********************

Updated August 17

Thank you to everyone who has been reaching out to us about Epic Rewards. We value your feedback and recognize your ongoing loyalty to us, and we are working to get back to you quickly.

To that end, please know that if you have contacted us you will hear back from us in direct response to your inquiry during the period between Tuesday, August 25th through Tuesday, September 1st. The timing of the response to you will depend on when we received your initial contact regarding Epic Rewards.

If you haven’t contacted us yet, please email us at epicrewards@sephora.com. We’ve set up this dedicated mailbox to collect the right information quickly and accurately, separating you from the queue for general Sephora inquiries. When you email us at this address, it will generate an automated response that confirms we’ve received the message. You can then expect to hear back from us as quickly as possible with more information.

Please know that our team is listening, and we take your concerns to heart. We value your support, and we will be in touch soon.

With our sincerest thanks,

The Beauty Insider Team

*************************************

Updated September 1

Thank you to everyone who reached out to us about Epic Rewards. We have reached out to all of those members who emailed us on or before August 25th, and are no longer accepting new submissions. epicrewards@sephora.com has been closed. Please contact us at 1-877-SEPHORA (1-877-737-4672) regarding any other questions or concerns. We have reviewed your feedback and are taking it into consideration as we plan for future promotions. Our loyal Beauty Insiders are enormously important to us.

[hweng]

Oh I never even considered redeeming without purchasing in store may be an issue!... So I've done it a few times and the girls at sephora have always gladly given me the rewards! 🙂

[Zpsid91]

Great idea!

[shopaholic15]

I think this is a wonderful idea. Al year I save samples and items I don't like from subscription boxes. At Christmas time I make up bundles and drop them off at the women's shelter. What goes around comes around. 

Thanks for this post 🙂

[Anonymous]

So is this Epic reward thing an advertisement for Nordstrom?

It works!!!

Great job.

[saramwrap]

I posted this on Facebook, but perhaps it's more useful to share it here.

It sounds like the excuse for the Epic Reward #epicfail is going to be "we didn't anticipate the overwhelming response to the promotion." But here's why that doesn't work for me - Sephora can see how many points every Beauty Insider has accrued. I'm sure their database can tell them how many members have over 1000, over 2000, over 5000, over 10000, etc. The customers with these large numbers of points are probably also the customers most interested in a high-point redemption opportunity. So demand shouldn't be that hard to predict.

Clearly, not every member will participate, and there shouldn't be an expectation that every single member will get a reward. But you should be able to look at, say, how many members have >5000 points... and then figure out how many rewards you'd need to satisfy a reasonable fraction of them. It seems like you've dissatisfied the majority of your big spenders, and probably could've predicted that result with your customer data and some simple math.

[heartsmyface]

I think we've determined that FB gets you the most response.   This is their site so it doesn't have the exposure FB does. 

[CelticMusic]

I believe that your “epic rewards” campaign was quite deceptive. Your email stated that the rewards would be available on August 10, 2015. This date was not qualified in any manner. You should have clearly stated in this email that the rewards would be available on August 10th, AT A SECRET TIME OF OUR CHOOSING. Had you been completely honest regarding this so-called epic event, I would have chosen not to participate. I do not engage in these ridiculous games because my time is valuable.

Rather than “apologizing” and surreptitiously stating that “[d]espite our best efforts to predict the response, demand was overwhelming, resulting in our being out of stock very quickly”, you should have been truthful. This statement is quite false. It is my understanding that there were approximately 50 items available. Please do not insult me by averring that you predicted that only 50 people would be interested in the rewards.

Your deceptive email was sent in order to generate sales. You should have been fully transparent and should have clearly stated that “only 50 awards will be made available”. Had I known this, I would have chosen not to participate as you have millions of customers.

Your deceptive advertising, and now your deceptive apology, are both unacceptable to me.

Yesterday I spent nearly $100 at The DermStore, as well as $41 at Ulta. Until you publicly apologize for your deceptive “epic” scam as well as properly make it up to your VIB Rouge customers, I will no longer be a Sephora customer.

The above commenter is correct - each state has laws regarding sweepstakes, lotteries and contests. You ran this event as a sweepstakes, yet you did not follow California's laws regarding sweepstakes.

In the State of California, the Department of Consumer Affairs enforces the sweepstakes laws. See CA BPC 17539. It states, in part, that --

The following unfair acts or practices undertaken by,
or omissions of, any person in the operation of any contest or
sweepstakes are prohibited:
   (1) Failing to clearly and conspicuously disclose, at the time of
the initial contest solicitation, at the time of each precontest
promotional solicitation and each time the payment of money is
required to become or to remain a contestant, the total number of
contestants anticipated based on prior experience and the percentages
of contestants correctly solving each puzzle used in the three most
recently completed contests conducted by the person. If the person
has not operated or promoted three contests he or she shall disclose
for each prior contest if any, the information required by this
section.
   (2) Failing to promptly send to each member of the public upon his
or her request, the actual number and percentage of contestants
correctly solving each puzzle or game in the contest most recently
completed.
   (3) Misrepresenting in any manner the odds of winning any prize.
   (4) Misrepresenting in any manner, the rules, terms, or conditions
of participation in a contest.
   (5) Failing to clearly and conspicuously disclose with all contest
puzzles and games and with all promotional puzzles and games all of
the following:
   (A) The maximum number of puzzles or games that may be necessary
to complete the contest and determine winners.
   (B) The maximum amount of money, including the maximum cost of any
postage and handling fees, that a participant may be asked to pay to
win each of the contest prizes then offered.
   (C) That future puzzles or games, if any, or tie breakers, if any,
will be significantly more difficult than the initial puzzle.
   (D) The date or dates on or before which the contest will
terminate and upon which all prizes will be awarded.
   (E) The method of determining prizewinners if a tie remains after
the last tie breaker puzzle is completed.
   (F) All rules, regulations, terms, and conditions of the contest.
   (6) Failing to clearly and conspicuously disclose the exact nature
and approximate value of the prizes when offered.
   (7) Failing to award and distribute all prizes of the value and
type represented.
   (8) Representing directly or by implication that the number of
participants has been significantly limited, or that any particular
person has been selected to win a prize unless such is the fact.
   (9) Representing directly or by implication that any particular
person has won any money, prize, thing, or other value in a contest
unless there has been a real contest in which a meaningful
percentage, which shall be at least a majority, of the participants
in such contests have failed to win a prize, money, thing, or other
value.

[tiri]

More importantly.... Under California Business and Professions Code Section 17539.3(e)...

As used in Sections 17539 to 17539.2, inclusive, "contest" includes any game, contest, puzzle, scheme, or plan that holds out or offers to prospective participants the opportunity to receive or compete for gifts, prizes, or gratuities as determined by skill or any combination of chance and skill and that is, or in whole or in part may be, conditioned upon the payment of consideration.

Most likely the epic reward event is NOT a contest.  No one paid consideration (value... money, points, giving up legal right, etc) to have a chance at receiving the rewards.  Yes, you pay in points once you check out.  However, the chance at redeeming the rewards was not bought by anyone through payment of consideration; everyone had an equal chance at redeeming (not taking to account personal differences/issues... internet speed, frequency of refreshing, using different links).  Essentially you were shopping; buying rewards with your points.  You did not pay to have an opportunity to participate in the redeeming challenge... If you had the points, you could have the chance to redeem... just as if you had the cash, you could have the chance to buy limited edition items at a shop.... [[I am not a CA lawyer, so you can make your own interpretation of the law.]]

If the epic reward event is not a contest, then the disclosure requirements that you list do not apply. 

I know it is upsetting to not get a reward; worse, it's more upsetting that there's nothing available now or in the foreseeable future where you can redeem all those points for a worthy reward.  But again, ask yourself what you truly want to get out of pointing out possible legal claims.  Do you want Sephora to go bankrupt? Do you want free gifts? Do you want better opportunity to redeem your points for a good item? Even if your reason ends up sounding petty or even unreasonable, I think you have to really figure out what you want and why you are upset.  Filing frivolous lawsuits won't do anyone good, however. 

Also, please refer to my earlier comment regarding what constitutes Sephora "making it right" at this point. It is not achieved by giving thousands or even millions of people free merchandise. No one had the right to that before the epic rewards, and no one has the right to that now. Maybe Sephora could provide better opportunities to redeem better rewards more frequently throughout the year; even then you have to remember all rewards last as long as the supplies last.  Implying that people deserve free merchandise truly does weaken your position, and that's what others are taking issue with and calling it an "entitled" mindset.

[bratknits]

Actually in most states requiring a purchase is "consideration" which is why you always see a way to enter without making a purchase in the small print. Both to get the points and to claim the reward required the participant to make a purchase.

[MissAlinaMina]

I would think those that ended up getting the reward taken away from them would have a case. Technically if 50 people made a purchase to get a particular prize, but only 40 prizes were available, then 40 people won and 10 people lost and all 50 had to make a purchase for that chance. 

[tiri]

I understand that... but no consideration had to be given to have the chance to redeem the items using your points.  Timing is important.  Yes, to ultimately check out successfully, you had to make some sort of a purchase and turn over 1000 points.  However, the epic rewards event did not require you to make a purchase to be able to have the chance to redeem.  The opportunity is completely open to everyone.  You didn't have to make a purchase or turn over points to be able to access the site. 

If people had to make a purchase to gain an entry or had to pay points to get access to the site, and then some people were able to redeem awards but others could not, then I would say it was a "contest".  Here, people did not have to make purchases up front or pay out in money or cash up front to secure some "entry" into a contest...

You were required to make some purchase to earn points, yes... but then would you say that every 100pt/500pt perk being available is a "contest"? The "making of a purchase," aka spending money, is the consideration given to Sephora, and in return you get the item you purchased and points.  The consideration for that transaction is separate, and it can't just be "reused" essentially to be "consideration" to turn this event into a "contest."

But of course, people can make sound legal arguments either way.... *shrug*

[bratknits]

Then there's the tax issue.  The paperwork from the Josie Maran trip last time said the winner would be issued a 1099.  Now if it's just a points redemption and not a contest why are they telling the IRS they've given out a prize?

[tiri]

lol I don't know tax law... so don't take my word for it... but 1099-MISC forms are sent when companies give out amounts over $600 in cash/cash equivalents/large prizes with value that is not de minimis to third parties that are not employees... California contest law and federal tax law could surely overlap, but one law finding something to be a contest doesn't necessarily mean tax is owed (and vice versa).... There are lots of variables that go into it....

And again.... tax law is confusing as hell.... And IRS, if they could track down to the tiny cent, would probably love to collect taxes on small value prizes too, arguing that it is taxable income and not an exempt gift.

Sort of time wasting to go on and on about possible laws Sephora broke or didn't break though.... So.... This is gonna be my last comment in this thread, haha.  Peace out, ladies. 🙂

[bratknits]

If it's not a contest there shouldn't be a prize to be taxed.  If it is a contest with a taxable prize they're subject to local laws concerning contests.  The only reason they haven't had to pick one is that no one's complained loud enough yet.  If I were one of the people who had the reward removed after I made the purchase and was told the order couldn't be canceled my first call would be to my state AG, let them sort it out.

[tiri]

You do you, girl. You do you.

But 1099 is a federal tax form; not a state tax form. Yes, there are state taxes. Yes, there are bunch of other laws that interact. But it doesn't work in such black and white ways as you claim; especially when you are dealing with state and federal law.  Maybe IRS sent out guidance about redeeming items using points or what happens tax-wise when the value of the consideration you pay is way too little compared to the value of what you are receiving, therefore even if it is not a prize/contest, there is income to you. Who knows. Not a tax lawyer, not a CA lawyer.

And the people that you speak of, they can do whatever they want too.  But for those specific people, I wouldn't say a claim under CA contest laws or a claim under federal income tax law would be the strongest argument they could make........ but who knowsssss.

[Mariahk83]

maybe i'm missing something - but I can't see where Sephora violated any of these and most of them don't apply as there was no contest.

[bratknits]

They're run for Sephora by a contest company called HelloWorld formerly known as (not kidding) ePrize.

I'm just going to wander off now and try and remember I something I once heard about ducks...

[Libellules]

I don't think they've been named that, but they've been treated as such :/.

[jellybean917]

When you put it that way....

It makes that feeling of deception many of us have much more valid. Thanks for this information!

[greenchilli]

You know, I wish more people would be honest about top secret information. 

[meganlisa]

Wow!  I'm impressed!!!!  Good use of facts!  I hadn't even thought of this aspect.  I'm being totally sincere and really am writing this in total support!  Good job!