[jdh]

I'm the Series A investor in this company.

We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusually high for a subscription service.

I obviously cannot speak to your girlfriend's experience. With nearly a million subscribers, there are certainly people with bad experiences -- same is true with any service. Netflix is great but I am sure there are a number of people who have had a bad experience.

I would encourage the HackerNews community to consider the opposite: if we assume the investors in this business do perform due diligence, is there another possible explanation? Is it possible that this case is not representative of the average case?

But hey, we don't have to be he-said-she-said here, anyone can just go to the site and verify if this claim is true. In essence, the claim is: "The site tricked me. I went to buy a single pair of shoes, and in doing so, they actually started taxing my credit card every month, and no one warned me."

Folks are right to be skeptical -- a lot of businesses have done this, tried to hide the fact there would be future charges. Does JustFab?

I just went to the site -- you can do this -- picked a random pair of boots and put them in my shopping cart. I then clicked checkout, and here is what that page looked like:

http://imagesup.net/?di=15138026329215

"I wonder how much of this $100 million are from people like my girlfriend who simply didn't read their entire 2,500 words Terms of Service and were unaware that they were charged $39.95 a month for nothing" -- Seriously, please look at the link above to the checkout flow and tell me that's how you see it, that you have to read the 2,500 word TOS to figure out that this is the case.

Seems pretty clear to me. You can get the boots for $39 if you join the VIP program. "With this purchase, you will be activating your VIP membership"

Under "How VIP Membership Works", it explains: " If you do not take action between the 1st and the 5th of the month, you will be charged $39.95 for a member credit on the 6th. Each credit can be redeemed for 1 JustFab item, so use it to shop later!"

It's in plain English, and in the same font size as everything else on the page. Over 800,000 people can manage their subscription account every month without racking up credits. I'm sorry it didn't work for your girlfriend, and I recognize she is not the only one who has not grokked the subscription element and been surprised -- but it's a tiny minority, and the information is quite clear on the site.

Finally, one may ask: why subscription at all? Well, $39 for a high quality pair of boots is a really, really good deal. Most e-commerce merchants have to reacquire their customers for every transaction. By asking members to commit to come back to the site once a month, the company doesn't have to constantly pay google or other traffic sources to acquire members, and to have prices like this you have to keep costs low. That's the deal. There are plenty of higher priced places to buy shoes if you don't want to subscribe.

Double finally: credits never expire. If you have 8 credits in your account, you can go get 8 pairs of shoes.

Justfab is an awesome company and is creating and H&M or Zara experience online: fast fashion at great prices. I'm not sure HN is the target demographic, but it's a great service and customers love it, and VCs have poured money into because of that.

[avalaunch]

The other commenters are being too nice in their replies.

You're full of shit. JustFab is a shoe of the month club masquerading as a normal online shoe store. The VIP Membership Program is the essence of JustFab's business model and yet it's missing entirely from the home page of their site. It looks like any other shoe store. And yet you think it's clear that the user is being signed up for a shoe of the month membership when they originally clicked through to buy a single pair of shoes.

The entire checkout process is engineered to get people to sign up for the "VIP Membership Program" without realizing what it is. If they wanted to be up front about it, they'd explain it on the home page. They'd include it in the list of items that you're purchasing. They'd include the relevant terms (not just a link to them) on the page where you enter your credit card information. They'd put the terms higher on the page so that you're more likely to read them. They'd put the "Checkout as a regular member" link next to the "normal" checkout button and they'd make it just as big. And they'd make it a button. They don't do any of these things.

When a user goes to checkout of any online store, they're not going to read everything on every page. It's a process they're very familiar with so they're going to skim and click through quickly. I know this, you know this, and JustFab knows this. That's why the program details are listed on the first page of the checkout process and not the last. That's why they're listed on a page where the user has but one action to take. Click the big pink button and get on with the checkout process.

JustFab is not an awesome company as you claim. It is a scam and you are a horrible investor for investing in them.

[testing12341234]

Absolutely agree with this comment. Here's the impression that I see at a "first glance" that page:

1.) The item to purchase, along with the price of the item. 2.) A bright magenta "Continue Checkout" button. 3.) An ad for an upsell on the right hand side which I'm generally not interested in. (on the right side, light grey text, etc)

Only after carefully scanning the page do I notice the following:

3.) This isn't an ad, it's actually something important for me to read. 4.) There is a tiny magenta link on the right hand side with explanation text that says to click it if I don't want to save 50%. 5.) Way down at the bottom of the page is text.

So I went ahead and did try it out myself. I borrowed a friend's laptop (that doesn't have a developer-level screen resolution). The screen resolution was 1333 x 768 and FF is maximized there. Here is what it looked like http://imgur.com/9rHhhLV

What's missing from that page, is all of the important information about the VIP program. What is present is the price of the item, the quantity and a magenta "Continue Checkout" button.

I'm definitely calling "Dark Pattern" on this one. Hiding important text off the screen, coloring the important text a light grey, even when the text is visible it is far down the right side in a small font.

[neya]

At first, I disagreed with your tone and profanity. But now, after trying to checkout on that site myself, I realize that it's fair to treat people who knowingly aid scammers, this way. Especially when they are the ones who fund them. It's not like they are innocent little babies, right? They (the company and the investors) know obviously why the conversion rates are so high - Because they are very subtle-y scamming people. We must not encourage this type of shit. It will get back to us at some point. I am with you on this one.

[djhomeless]

Also with you on this. The checkout flow is deliberately misleading. Sorry Mr. VC, you DID do your homework and the fact that you still invested is telling.

First off, what is the "happy path" on this checkout page? Right, totals + shipping costs + grand totals + checkout button. What else is hiding in this element? "Promo Code: 50% off your FIRST item", emphasis mine. What this is telling the consumer, is NOT that you are signing up to the VIP program and getting a discount because of it, it's saying "hey, since you're new, we are giving you a discount".

Would a consumer walk away from the happy path with the assumption that they had signed up to a subscription in exchange for the 50% off for their first item? No.

Yes Mr. VC, the subscription info is here on the page, but the location is not an anchor. The way the page is designed is to funnel the users attention down to the continue checkout button. The product designers knew this. At least GoDaddy puts their useless up-sells in the middle of the page, but they clearly give users an ability to opt out. They don't try to fool users by hiding them on parts of the page where they know they won't look.

Wow, I just said a startup is worse than GoDaddy. Getting frosty in hell no?

[belorn]

> When a user goes to checkout of any online store, they're not going to read everything on every page. It's a process they're very familiar with so they're going to skim and click through quickly. I know this, you know this, and JustFab knows this.

This is the key point. If I know, you know, and JustFab know, then JustFab is without doubt acting in deceitful behavior. The act of deliberately portraying a subscription as an sale, usually comes down to the FTC (and sometimes State law) under the heading of False advertising.

Going to justfab website, nowhere on the front page or in the catalog does the word "subscription" become uttered. Not even in the linked checkout images is it mentioned. Justfab could argue that "everyone knows" that a VIP membership is the same as subscription, but it would be up to them to argue and prove that.

The front page especially could also be targeted, as it states clearly that 2 pairs goes for 39.95, and uses the word "buy" to describe it rather than subscribe.

[cowls]

Agreed, complete scam. From that image it looks like you are making a standard purchase for a pair of shoes, and possibly just signing up to their site. Its only if you read in detail everything on that page and get down to 3 in the bottom right that it finally says you will be charged a monthly fee.

[wpietri]

And remember, my fellow entrepreneurs: if an investor is ok with cheating customers, there's no reason to think they will have a problem cheating you.

[ballard]

Double agree.

Not delivering value for dollar is called one thing: a scam. It might be letter of US law legal (which doesn't have a stellar consumer protections record), but it's dishonest as predatory lending and crap hawked from backs of magazines.

TL;DR Series A investor is trying to rationalize legitimacy to himself in the face of overwhelming conflicting evidence. Don't worry chap, denial is the first step toward accepting you dumped cash on a charlatan. Hopefully it won't end up in plastic barrels in the desert.

The number to cancel VIP is 1-866-337-0906 (as seen on TOS)

[calinet6]

Exactly. It's a bullshit scam. The entire page guides you into signing up for a "VIP" style, but always looks and feels like you're buying a single pair of shoes. It is a scam, plain and simple, and their recurring income is from the privilege of sending poor unwary consumers a new pair of shoes every single month without their full understanding.

It's no better than the mail-order monthly subscription scams of olde. Perhaps people invest in those too, but no one in their right mind claims it's "a great company."

It's a scam using classic deceptive marketing methods. No debate, no question.

[rz2k]

I suppose it isn't exactly Blue Hippo, but they'd have to be pretty obtuse not to know that it is misleading, regardless of whether it is the old or new version of the page.[1][2]

Take for example item number three shared by both in the side bar: "Skip The Month" or "Skip any month".

This isn't the usual lowercase English word "skip", it is a special "Skip", short for special terminology "Skip the Month", their official term for actively declining within a five day window, not passively skipping a purchase. (The official terms and conditions[3] specify "Skip This Month" rather than "Skip The Month", but that may be another issue.)

Its meaning could be ambiguous if the reader is adept at incorporating new usages for words as they are being defined by the surrounding context. Or, the reader could skim the headings, or the reader simply lacked the reading comprehension skills to grasp that the meaning had changed in the text below the heading.

These challenges can be out of reach for a large majority of adults. Glance at the National Assessment for Adult Literacy[4], see the descriptions of the difference between "intermediate" (44%) and "proficient" (13%), and compare the difficulty of sample questions[5] with the comprehension level needed to grasp the message. (Complete reports can be found here: http://nces.ed.gov/pubsearch/getpubcats.asp?sid=032)

This extremely poor communication that never seems to happen when people benefit from their customers understanding what they are trying to say, and makes it pretty difficult to deny that their business is based on misleading people.

[1] http://i.imgur.com/3di93.png

[2] http://i.imgur.com/d02xmsy.png

[3] http://www.justfab.com/index.cfm?action=home.terms_and_condi...

[4] http://nces.ed.gov/naal/kf_demographics.asp#2

[5] http://nces.ed.gov/naal/sample.asp

[bausson]

Seeing the comments, I wonder if the only person he was trying to convince was himself.

From what I see in his comment, it looks quite like a rationalization attempt.

[capex]

Came to say this. I can smell class action against JustFab.

[mring33621]

Agreed. This 'investor' is full of shit. Per their own screen capture, there is no line item for 'VIP membership' in the cart section of the page. As such, it reasonably appears that the customer is buying no such thing. But, in fact, they are!

The presence of the sidebar is irrelevant, as it is in no way visually associated with the current transaction.

[drcongo]

I hope this ends up as the most upvoted post in HN history.

[mkr-hn]

I came to it knowing the OP's story and still had to think for a minute to realize the pre-checked VIP option was the monthly thing the OP described. What hope does someone without so much information have?

[skizm]

If investors get a good ROI all legally they might be horrible people but not horrible investors.

[weland]

This is an old business practice that I remember from when I was a kid. There were a lot of second-rate publishers (books, in this case, but it worked for pretty much anything) which basically worked on a "buy a book now, and we'll send you a new one each month for <some really small price>". But you had to specifically opt out of this, which was done by ticking a very small box in the corner, in which case the prices for a single order would quadruple or something. Needless to say, refunds were out of the question.

I casually discarded those, blaming it on the new-found business astuteness of the society I lived in, but it seems this kind of scam is still around.

I'm calling it scam because, where I live, this type of business was actually considered a scam, and I think this went to the extent that they passed legislation to ensure their activity is regulated. They were required to clearly state the subscription model, in a separate box, delimited with clear colors and a bright background. Needless to say, they died out in less than a year.

The website obviously works, and is profitable, because it deliberately misinforms customers, and I think investing in this kind of business is very short-sighted. Not for you directly, since I presume it will bring you enough profit, but for the economy at large: this kind of activity adds no value whatsoever to anything, no one's life is substantially and essentially improved, all that happens is that some money change hands without producing any meaningful result. It's an economic plague.

I'm not casting judgement on yourself for investing in this business, particularly since I'm not willing to start a debate (on the Internet, of all things) about the "but everyone does it" argument. But defending this kind of shady practice is pretty low.

(Edited the rather rude words that were initially there instead of "pretty low")

[rtb]

Exactly - it's a scam and if it gets enough traction hopefully it will be explicitly illegal soon (v.s. just arguably illegal via general anti fraud statutes).

See the <a href="https://news.ycombinator.com/item?id=6455718">comment</a> from "Semaphor" below; this type of scam is already explicitly illegal in Germany.

[espeed]

On the checkout page, they are applying the type of behavior design/economics research done by Dan Ariely at MIT ("Predictably Irrational" http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_o...) and the Stanford Persuasive Tech Lab (http://captology.stanford.edu/).

[jeromeparadis]

At least, these scams would ship you something! It would remind you they decided to scam you by sending you an overprice item. Justfab got the genius idea that it is much more profitable to have apparently nicely priced items that you won't order or receive but still be charged for.

[bowlofpetunias]

You've just demonstrated exactly what a classic scam looks like online.

"It's in plain English" doesn't compensate for the fact that it's a small print sidebar and everything else looks and feels exactly like a regular shop.

Tricking people into getting a subscription via the small print is one of the oldest dubious business models around. Companies like JustFab disgust me.

I will make an effort to avoid you and Matrix Partners. I don't want to be near investors that justify such unethical tactics.

Yes, I'm sure you've done plenty of due diligence. You just lack ethics.

[abalone]

Pardon my french HN, but what a load of horseshit.

When I was a kid there was this mail-order thing called Columbia House Record Club. It was the same business model. They entice you with super cheap music.. if you signed up for a monthly subscription. I was a happy customer. Because I was smart enough to work the system, cancel in time and get a bunch of free CDs for pennies.

But guess what? Somebody was filling their coffers and it wasn't me. Columbia House made $500M/year. It was the regular folks who didn't pay close attention and didn't realize just how much they'd be charged on a recurring basis for stuff they didn't want.

So this VC's use of high customer satisfaction rates as a defense is utterly without merit. That's the nature of this business: savvy customers do well, but at the expense of another set of exploited customers.

Here's a great article on Columbia House, which calls it "one of the more dishonest and predatory marketing devices of the 20th century". It could just as well be about JustFab.

http://thephoenix.com/boston/music/129722-rise-and-fall-of-t...

Oh.. and now I have a really bad impression of Matrix Partners.

[po]

It may have been shady but even 8 year olds could tell that it was a 'club' and not a 'store' and knew that you had to cancel. It was "Join the club and get 8 CD's for free' not the other way around with small print. People just forgot to cancel or would stick with it for a while and then realize they weren't getting value. This is a different thing because it is intentionally masquerading as an online web store. Even other online services that sell subscriptions are designed differently.

This is making money off of deception, not consumer laziness like Columbia House was.

[photorized]

However, Columbia House was specifically advertised as a "club". It was even part of their name!

This JustFab business is much, much worse.

[karterk]

Not the OP - but I did take a look at that page, and I do find it misleading.

The "checkout as a regular member" is in a small font on the sidebar, while the main CTA is big, bold and defaults to the VIP program.

The part where you're told about the monthly fee is in the last sentence of the sidebar. I had to practically hunt it to find it - for most people shopping online this will be oblivious.

By giving the screenshot - atleast to me, you have proved without doubt that the site is indeed misleading.

[Edit: grammar]

[nthitz]

Agreed. Only at the very end of the right column which most users will not read to is the mention of the charge. "Activating your VIP service" could easily be interpreted as being free given the purchase. Regardless of their numbers, it is definitely not obvious that there will be a monthly $40 charge. (The fact that they do give a credit for the charge makes things not 100% scummy I will say)

[paulftw]

Second that. Smallest font on the page, light grey while everything else is black, pushed to the bottom of the side column - certainly looks like fine print to me.

There's no option to opt out of VIP membership - if I haven't said I want it, and was not asked whether I want it, I shouldn't be paying for it, should I?

I think OP has a case here.

Do they ever try to remind customer about the upcoming charge?

[jdh]

I don't accept the word "misleading" -- I do not believe the page in any way misleads. It does not try to position it as anything other than a subscription, and the language is plain english.

Could they put the subscription details in bold? Could they use a larger font than all the other text? Sure. It's a tradeoff, for sure, and every retailer has to optimize their site to perform. Could they pop up three boxes after you click yes and say, "Are you sure?" "Are you really, really sure?" -- (yes, I know I'm being ridiculous) -- but yes, it is a tradeoff.

But with an NPS score in the 50's, nearing a million subscribers with very low churn rates -- happy users -- as investors we feel the business is healthy and being managed in an upfront way.

But, I can see how one might feel they would like it bolder or more prominent -- reasonable people could disagree on that.

I would submit that, when you come to view the site under the lens of clicking on a discussion about a fraud, and then go to it to decide if it is a fraud, and you (probably) aren't a likely customer and don't think "damn, that's a hot pair of boots for $40", you end up with a different lens.

[zb]

You know, when I read the OP my first thought was "there are two sides to every story". A lot depends on how the actual costs are communicated.

Then I saw your screenshot.

Your defence of this company has succeeded where the OP failed, in proving beyond a shadow of a doubt that this is an unmitigated scam. You should be ashamed for attempting to profit from such a thoroughly disreputable con.

> Folks are right to be skeptical -- a lot of businesses have done this, tried to hide the fact there would be future charges. Does JustFab?

Yes. Yes. YES! They've quite clearly worked very hard to hide it.

Have you received some sort of ethics bypass that renders you literally the only person in this thread unable to see that?

[jwegan]

I find this incredibly misleading. Absolutely no where on the home page is there any hint or mention of a subscription service. The user finds a pair of boots, decides to buy them and enters what appears to be a standard checkout process.

In the screenshot you uploaded, is a standard checkout screen you would see on any e-commerce site. The only difference is there is what appears to be an ad/upsell to some VIP program that I'm sure no one pays attention to.

I've done a lot of work in product & usability in the shopping/e-commerce space and in my opinion, this flow is intentionally misleading.

[javert]

Well said.

[harrybr]

Hi Josh,

it's good of you to step up and have this discussion. It seems that justfab is using a Conversion Rate Optimisation trick that you're either not aware of or that you're deliberately downplaying. Put simply, the UI is set to have VIP membership activation default to ON. Those people who are not paying attention will not read the information in the right hand side bar, will check out and will mistakenly purchase the membership.

The simple way to fix this is to have NO DEFAULT. When a user clicks check out, you should show them a page with both options equally balanced. For example, you could have two radio buttons with neither option preselected. That way the user has to make an explicit decision to choose to become a member or not.

This is your opportunity to put your money where your mouth is. Get the justfab team to redesign it. Make it impossible for users to opt in by mistake. Rely entirely on users making an explicit choice. After all, if you genuinely believe that all of your valued customers opt in to the VIP membership by choice, then this redesign will not have any effect on your revenue.

Ball's in your court. We're all interested to know how you will play this.

[pjbrow]

Very well said. I agree entirely - there should be a concrete change as a result of this thread. It's impossible for a reasonable person to read the opinions of the well informed people here and continue to think that everything's A-ok. This is an opportunity to prove your ethical bona fides, jdh.

[tripzilch]

> Hi Josh, it's good of you to step up and have this discussion.

He's not having a discussion, he quickly tried to "defend" this website, as if he really believed it is not misleading, found that everyone saw right through his dishonesty, and cowardly retreated from any discussion.

> The simple way to fix this is to have NO DEFAULT. When a user clicks check out, you should show them a page with both options equally balanced.

This is exactly what the German version of the site looks like[0]. Because these sort of misleading practices are considered fraudulent in Germany.

Fraudulent.

They know perfectly well how they are misleading customers and feel they can get away with it, except in Germany. I wonder if they make any profit in Germany?

[0] the German version is no longer flat-out misleading, it still could be a lot clearer, but at least the offer is so fishy, it stinks.

[rurounijones]

* The VIP membership program information is not part of the eye flow from the checkout info to the nice big bright attention grabbing checkout button.

* Nor does it immediately stand-out as "This is something you REALLY need to read" rather than just normal advertising for an opt-in premium package,

* There is no "I have read and accepted the VIP stuff" checkbox in the checkout flow. User has to specifically opt-out by clicking a link no-where near the standard user flow.

So, not fraudulent technically but this seems like a clear case of a "Dark Pattern" and seems pretty scammy to me.

>It's in plain English, and in the same font size as everything else on the page.

The actual text saying "With this purchase you are activating your VIP membership program" is clearly smaller than the main text in the checkout (product name, prices etc).

> and the information is quite clear on the site.

Your opinion, I have to disagree.

[Edit] having seen the old page linked to by another user http://i.imgur.com/3di93.png is it pretty clear that the new page is much more deceptive (Old one had a checkbox requiring acceptance of VIP membership)

[Edit] Expanded opinion.

[tripzilch]

> So, not fraudulent technically

It is in fact technically fraudulent in Germany, which is why the German version of the page looks different.

Still not super-clear on the details, but sufficiently "you're going to be billed each month" to let most people know it is a shitty deal, and the (pay once high price) alternative is clearly displayed at the same size (just not highlighted as much), at a high price to make people wonder "what's the catch with the other deal at 1/4th the price?".

[AndyKelley]

First I want to thank you for bothering to defend yourself here in public. When a conflict exists between two parties, the best chance for resolving it is when both parties are able to present their respective cases.

I am about to get philosophical.

If we look immediately at what it means to invest, what we come up with is a profit equation. One tries to maximize the expected profit of an investment, taking into account risk.

But let's try a thought experiment. What if you had 1,000 times more money than you do right now? So if you're a millionare, you're now a billionare. Would that change what you invest in? In what ways would it do so?

Would you start making even larger investments, with even larger returns? If so, what if you had 1,000,000 times more money than you do right now? At what point does profit for profit's sake become pointless?

I think that deep within yourself, you know that investing is not merely about profit for profit's sake. Somewhere in there I think you recognize that by choosing what to invest in, you have an awesome power to change the world. You have power that extremely few people have. You are, in essence, the real life equivalent of a super hero.

Based on that, let me ask you this question:

Is this really how you want to change the world?

Is this truly how you want to spend the vast power you have at your disposal?

[icosahedronman]

Wow, that was a little too deep than could be appreciated by (Probably) some capitalist looking to just make some goddamned money

[marveller]

Super hero... you've made my day!

[jacquesm]

I'm not sure what I'm more upset by, the fact that JustFab is clearly a scam or that you find ways in which you twist this to justify it (to yourself, maybe?).

That image you link contains the text 'if you don't take action between the 1st and the 5th of the month, you will be charged', how about 'unless you wish to buy another product you won't be charged' instead?

The whole flow of the page is set up in such a way to make it seem like this is a one-time purchase, if you wanted to play nice you'd make the payment button read 'continue to subscribe' instead of 'continue to checkout'.

Disgusting.

[jeswin]

Wow. I can't believe you are justifying that screenshot. This would have completely deceived many of my non-technical friends.

- When you buy shoes, you pay for shoes and not a monthly subscription. That's what people expect when they see 'Checkout'.

- Even after looking at the screen after reading this post, nowhere is it entirely obvious that I'm about to sign away $40 a month.

- reg $69, VIP $39. Looks just like a regular discount.

- I went through the checkout process, until the last payment screen. I don't notice anything saying that this is a recurring charge.

OP was being nice. This is dishonest and borderline fraud.

Edit: FRAUD.

[MattBearman]

You sir a full of shit (and clearly unbiased). JustFab has become fairly well known in the UK for pulling this cheap trick on unsuspecting customers, I've even seen it reported on TV news.

Due dilligence my ass:

https://www.google.co.uk/search?q=justfab&oq=justfab&aqs=chr...

http://www.consumeraffairs.com/online/justfab.html

[davidjgraph]

If you really believe a word you've just written, here's my suggestion. Change the page so that by default you're not joined up to the VIP program and shoppers have to specifically opt-in. If the text is as clear as you claim, you'll still get roughly the same join up rate because the deal is being made is brilliant and it's perfectly clear what's happening, right?

[nolok]

A note on this: I do believe the website to be a scam and parent to be obtuse or lying, but for the specific case of your comment studies have proved that people are more likely to stick with the default choice made for them, so you example wouldn't work. Even if the two offers were providing an absolutely identical end value, the default one would have more adoption.

[etchalon]

I'm sorry, but yes, that's a very tricky site.

There are about a bajillion ways to make it much more clear what you're actually paying for. Not even complicated, "Well we need to hire a UX designer and do some study" type stuff. Just straight-forward, common sense things like adding the price of the membership as a line item.

So, yes, you've invested in a company which is actively hostile to its customers.

[pyalot2]

A prime example of a scam, that you can get away with in court because just like fine print in contracts, it was actually stated.

See, there is the action (the orange checkout button) on the left box. Right below it are the shipping options. And then there's the VIP sidebar. It's "action" isn't in any discernable way a "button", it's a small red link. It's designed to be non recognizable as an "action" that is an alternative to the big orange action, and unless you actually read the sidebar, you won't know that the sidebar is also a checkout option display. Sidebars, for the most part, are not known to consumers to contain relevant information, because everybody stuffs sidebars with advertising.

[matthiasl]

It looks like a class action lawsuit was filed against JustFab. The complaint starts like this:

   "Plaintiff Edna Betances-Harold, on behalf of herself and others similarly situated,
    brings this class action complaint against Defendant Just Fabulous, Inc, based on 
    its practice of deceptively marketing and billing consumers for unauthorized 
    charges relating to its retail website."

Does anyone know how that class action went, or how to find out?

Source: http://www.scambook.com/blog/2011/10/justfab-com-justfabulou...

[Tichy]

Are you kidding? Even though I knew what I was looking for in that image, it took me a long time to find the information that there will be a charge every month. It is at the very bottom of the page, in the fine print.

I believe you that you believe in the honesty of the company, and that you have the best intentions. Clearly this semi-scam works for you, but if you really want to feel good about yourself, I recommend stepping on that companies toes and make them present the information in an obvious way.

Also wondering about the law - I am pretty sure that here in Germany that kind of thing wouldn't fly, meaning customers wouldn't be obliged to pay up (although some probably would because they don't know that). Are there no customer protection laws in the US?

[goathead]

Same here, it's very clearly unclear in what is going on with that VIP program. That's not a failure of the site visitor at all but certainly will be the first thing anyone hungry for their money would say.

It seems like further proof that the plan is to separate suckers from their money.

I'm not overly familiar with consumer protection law here in the US but if it exists it wouldn't surprise me to see it haphazardly enforced if at all.

[kitbrennan]

The checkout page you links deserves a notable place within Dark Patterns. (http://darkpatterns.org/)

But lets break down exactly why that page is designed to trick a significant number of customers into purchasing something that they did not intend to purchase: * All the VIP information appears in a box that most shopping websites use for advertising or shipping FAQs. Many average readers (note that I do not say all), would fail to even glance at that box. * The 'checkout as regular member' button is in a completely different flow of the page, and of a different size. On the one hand, it would probably be ok for one of those two things to be true, but to make them both true they know that some customers will simply think there is only one checkout option when they scan the page. * By far the most scammy part of the page is the fact that the payment does not appear in the shopping cart or subtotal box! People reasonably expect that with online shopping, everything they will be paying for appears in the shopping cart.

Many of those things on their own would probably be ok. You could just claim that it is a page optimised for converting to the VIP program. However, the combination of all those things are designed not only to convert people legitimately interested in the VIP program, but to also convert a sizeable number of people that skim read the checkout page.

[neotek]

I was with you up until the screenshot - that's a completely disingenuous way to present some pretty vital information. It's a textbook example of a dark pattern[1].

[1] http://darkpatterns.org/

[smsm42]

I am sorry, but any company that does not explicitly gets consent for paid membership but tacks it on another deal is dangerously close to a scam. I understand that asking forgiveness is much more profitable than asking for permission, but IMHO it reeks of dishonesty and trickery.

In fact, I've opened the homepage of justfab and it does not mention subscription anywhere on the homepage, just the 39.95 price which any reasonable person would conclude is one-time deal and not a recurring subscription. It is mentioned only once on the very end of "how it works" page, as if it were an insignificant detail. Such detail like recurrent charge I think should be prominently mentioned. If you buy a loaf of bread in the store, you don't expect to be automatically enrolled into "bread appreciation club" that would charge you each month, do you?

The companies that behave in such a manner and try to trick customers into something that is not at all clear for them what they are agreeing to not only hurt the consumers, they hurt the whole internet sales ecosystem. Now what I would say to a relative or friend who is not adept in recognizing all tricks and fine prints? I would say "never buy anything at all from a store you don't know and that somebody who knows all the tricks have vetted". Which hurts the whole system, now every newcomer has to work harder to prove he's not one of those scam ones and it not going to trick you into something you don't want to do.

[Semaphor]

I'm not 100% sure but I think this site would not be allowed in Germany because of consumer protection laws. In that regard it's very telling that justfab.de has a very different checkout:

http://imgur.com/uIZ5JX3

[tiatia]

But I am. It is illegal, to automatically opt-in for such a service during check-out.

[Tichy]

That looks better, but doesn't mention that the membership comes with a monthly fee. Pretty sure it is illegal in Germany.

I think the law in Germany even states what kind of text is appropriate on the "buy now" button.

[Tepix]

I find even that misleading because it doesn't mention the monthly fee. I'm pretty sure you could refuse to pay it and win in court.

[bane]

That's pretty astonishing actually.

[downandout]

I'm curious if, during due diligence, jdh and the other investors were given access to Justfab's chargeback rate on the subscription fees, and whether/how many merchant accounts maintained by the company have been shutdown. Having just looked at the site, I would definitely be misled by this, but that doesn't necessarily mean their core customers are.

Math doesn't lie: if chargeback rates are higher than e-commerce norms, then this continuity program is misleading. If they are not, then the program isn't misleading. I cannot possibly see how chargeback rates wouldn't be astronomically higher than the e-commerce average, but maybe I'm just not their target customer.

I would love to see a response to this comment with their chargeback rates for the subscription charges but I doubt I will get it.

[Daniel_Newby]

Just as important as the charge-back rate is the backlog of unused entitlements. Oh, and the median entitlement to age of account ratio.

[gabemart]

>Seems pretty clear to me.

I consider myself a fairly savvy internet user, and, even knowing it was there, it took me a good 20 seconds or so to find the part about a monthly charge in the image you posted.

The user attention is focused on the "continue checkout" box. It looks very similar to a part of the checkout flow at most other online retailers. Nothing in that box indicates a monthly charge. Nothing in that box even indicates that there's a choice between VIP and non-VIP. This information is relegated to the sidebar. In most websites, the sidebar contains non-critical supplementary information. Titling the sidebar with "VIP membership program" suggests to the user that the sidebar contains information on an opt-in (rather than opt-out) program that they can safely ignore if they just want to buy a pair of shoes.

It looks to me exactly like a dark pattern designed to trick the user into signing up for the monthly service without realizing what they are doing.

[anonymoushn]

Generally when I see a list of items I am purchasing, a "continue to checkout" button, and a right sidebar that covers the full height of the checkout area, the right sidebar does not contain additional services that I am purchasing. I would, in fact, expect services that I am purchasing to appear in the same list as the items that I am purchasing! In this instance I looked at the right sidebar only because I was looking for the "obvious" indication of the subscription, and even then I had trouble finding the bit that told me that purchasing a single pair of boots would cause me to be signed up, because it is in a sub-header in one of the lowest-contrast parts of the sidebar.

[damncabbage]

"With this purchase, you will be activating your VIP membership" is in the sidebar. It's at body-copy writing, and you have to go looking for it.

This is a combined "Forced Continuity" and "Sneak into Basket" set of dark patterns that doesn't even given you the in-line checkbox to uncheck:

* http://darkpatterns.org/library/sneak_into_basket/

* http://darkpatterns.org/library/forced_continuity/

[lancewiggs]

I would click the button and continue on that page. It's clearly deceptive, and certainly I do not get the impression that I would be signing up to a monthly fee - just a one-off.

The eye is focussed on the "continue checkout" button and the information directly above it. The customer is urged to think about shipping options, not VIP membership.

Don't believe it's deceptive? Why not put a giant "VIP a monthly fee" line just above the Continue Checkout button, and see the change in sign-ups.

[mmvvaa]

"credits never expire. If you have 8 credits in your account, you can go get 8 pairs of shoes."

It is called breakage. If they do not expire now, they will start to expire soon. What good is it to accumulate some revenue, if you cannot claim it has no cost associated to it? Either you do not know what it represents, or you are playing a good card. Sorry for the sarcasm to start this, but it sounds fishy.

I have no ethical problem with sites that make it easier for customers to get an on-going service (a subscription), when it is more convenient to have it than the opposite. (cellphones, gas, electricity) In this cases, it is much more cool not to have to deal with $39 or whatever amount it is decided that the store wants to discount to call you upon that private VIP club. It is dirty pricing.

And yes, I did go to the link you provided, and I did noticed that it is not necessary to read 2,500 words to figure out that the company is walking a fine line in between ethics and law. Bravo, for the tack-team, probably composed of some 5th av creative minds and some hard knock lawyers.

But this does not exclude the fact that IF the site wants to be ethical, and IF it gets at least a very little percentage of its revenue due to this, it should try hard, very hard; to tell people that visit their site for their first time, that a little fuck you contract might fall in their lap that very day if they are not fully aware of what they are doing.

In fact, it it happened once, and you realize, it may be possible that it has been misleading, you should change it.

I really hope a more transparent player comes along and have you guys think about this very concerning issue deeply.

Sleep tight.

[iamwil]

I tried out the site, and shopped for shoes as if I were a girl looking for shoes. With the way the shop and the navigation is set up, it really feels like an online store. It's not until you get to the checkout that you're presented with the VIP pricing.

Most of my time spent clicking around was looking at shoes and bags, and then taking a personalized style quiz. It's not at all obvious that it's a subscription based site, unless you carefully read the sidebar during checkout, and the "how it works tab". Not only that, the "how it works" tab disappears after you log in, so you'd never see it again, once you take the personalized quiz and sign up for the service.

Most web users are pretty single-minded in what they want to do, and they don't read. And the site just navigates and feels like a shopping site. Not a subscription site.

I can see how the OP's girlfriend got mislead. As for jdh defending it--well, either you've just looked at the numbers and not tried the actual shopping experience through new eyes, or you're just being completely disingenuous.

[hmexx]

So 800k out of 1m (according to your numbers) manage to avoid the subscription fee.

Remaining users: 200K * $39 / month in revenue.

So $8 million / month of recurring revenue through this programme. I wonder how the margin on that compares to the rest of the business ;)

[tuananh]

    JustFab "generate about $100 million this year" in sales

funny that 8 * 12 = 96 which is close enough.

[epaga]

Not to pile on, but after looking at that screenshot, I thought your point was going to be that the VIP program was NOT necessary for buying. I had to go back and forth between your comment and the screenshot to figure out the VIP membership was automatically included instead of being an upsell.

Wow. Absolutely appalling. You really should be ashamed of yourself as should anyone working for Justfab.

[zmb_]

You are funding one of the oldest scams in the book. This has been done for ages in various forms with various products as door-to-door and direct phone marketing. Currently where I live they are doing it with socks and underwear. You are lured in with "too good to be true" type deal, and hustled to sign into a continuous contract that is hard to get out of. I'm not sure about the current legal status, but I wouldn't be surprised if this business practice wasn't outlawed around here soon since it's been in the news quite a regularly.

[javert]

I looked at your image, and I think it's really unfortunate that they aren't upfront about what's going on.

You have to read all the way through to the last sentence at the bottom of the page, and then think back through what you've already read to piece together what you're signing up for.

They could have just said, "If you join our VIP program, you get to order one item from each month's showcase at no charge, for a $39.95 monthly membership fee. If you don't see anything in the showcase that you like, you have until the 5th of the month to opt out and we'll waive the fee for that month."

So yeah, it's not as bad as what the OP said, but it's still pretty bad.

Speculation: Women join the site based on word-of-mouth from other women, who tell them how it works. So that's why they aren't fooled. Women who aren't told beforehand how it works are probably like "WTF?" when they see it and are turned off by it, and some % of those are just going to click through, trusting that whatever that promotion is, surely this company is trustworthy and not trying to rip them off.

[KaiserPro]

Put it this way, from the evidence I've seen, and the checkout screen that is attached further down, This website is illegal in the UK

The Office of fair trading would shut this site in a heart beat. (if it were based in the UK)

the checkout proccess is deliberately misleading, it implies that clicking checkout will by the shoes and nothing else.

[mortov]

I don't think you've ever tried dealing with the OFT.

Glacial would imply an excess of speed and action on their part.

Scam companies regularly set up, flout the legislation and the OFT 'guidelines' (which is what they are so a breach needs to be investigated before it can become subject to enforcement - more delay) and keep going until the OFT eventually acts then collapse to run off with the money.

Normally local trading standards units are much quicker at taking action but have limited powers and some things are reserved for OFT (see Glacial, above).

It has taken years of complaints to the OFT about mobile phone companies hiking 'fixed price' contracts mid-term for any investigation to be done (small print says 'fixed price' is index linked to whatever index they choose to apply an increase with). The investigation is still ongoing and although there is talk of action, it's not actualy happened yet, despite this being one of the most significant causes of complaints about mobile phone contracts for many years. [http://www.bbc.co.uk/programmes/b006mg74/features/mobile-con...]

Action on a scam site doing auto-subscribe ? I wouldn't hold my breath regardless of whether it is legal or not.

[cabalamat]

> The Office of fair trading would shut this site in a heart beat. (if it were based in the UK)

They have a UK site: http://www.justfab.co.uk/

[chasing]

Oh, come on. The page shown in that image is totally designed to obfuscate the subscription info. I was looking for it and it still took me a minute or two to figure out where it was.

[chrismcb]

While it might seem pretty clear to you, it isn't clear to most users. There is very little indication that you are getting the boots for $39.95 as a VIP member. In addition there is a SINGLE large action item; "continue checkout." There is a WALL of text to the right, with no real indication you need to read it (the whole "same font size") In addition there is an action item "No thanks" which doesn't even look like something that is actionable. You claim that it is in plain English, but it actually isn't. The plain English says "Continue Checkout." Not "Continue Checkout as a new VIP member" There is an indication you are activating your VIP membership. But this wording is placed as far from the "continue checkout" button as possible. There was a recent article on HN about Dark Patterns http://darkpatterns.org/ and this page uses some of those dark patterns.

[retube]

Bollocks. Even knowing there was content on the page informing me of the VIP membership it took me a minute to indentify. It's a wall of text to process, on the RHS, in text considerably smaller than the big pink checkout button which focuses the attention.

This page is absolutely designed to catch people unawares. You long term subscribers becuase people a) don't realise theya re being repeat charged, b) they don't know how to cancel.

The business model is based on tricking people. As a VC you are not stupid, you know how this business works. To pretend otherwise is just a lie.

[kartikkumar]

Given that you've taken the time to explain all of this to the HN community, I can't help but wonder why you don't encourage JustFab to use this as a good PR opportunity. If, as you claim, the majority of users are happy the subscription-based model, surely the best way to nip this in the bud is to simply refund the money to the OP's girlfriend.

The only reason why I would think that you don't want to extend that olive branch is because you are afraid that it will set a precedence for other JustFab users, and that JustFab will be engulfed with refund requests. This however flies in the face of your firm believe that the majority of JustFab users are extremely happy with the services provided.

So, in a nutshell, instead of disputing whether or not the VIP subscription requirement is "scammy" or not, I would think that you would advocate the shortest route to conclusion in this case: refund the money.

In my eyes, anything less is simply vindication of the concerns outlined in this discussion thread.

[jasonkester]

Sounds like you have a simple solution:

Offer complete refunds of all paid subscription fees to anybody who asks for one. No questions asked. Single button, right from your "My Account" page. Refund all 8 months of those charges in one shot.

If you're correct, and it's just a tiny fraction of a percent of your userbase who neglected to read that six paragraph sidebar disguised as an ignorable upsell ad, then chances are nobody will ever ask for this refund and you guys will all be good to go. You can even offer it only to people who have never bought a second item, thus limiting it only to those few silly folks who put themselves in this boat through their own foolishness.

No harm right, since as you say, your guys are on the up and up.

[kilburn]

The rule in my book is pretty simple: opt-in is perfectly fine, opt-out is shady at best, and morally wrong. This applies to every service and/or subscription, from mailing lists to purchases.

This case is a clear "opt-out" case. If their offer is good enough, they could just explain why properly and people would opt-in. If they need to resort to this kind of tricks to get people enrolled, their offer is not so good and they are feeding on tricking the customers.

In any case, you should never trust a business resorting to these practices. These people won't have a problem selling your personal data whenever they (legally) have the opportunity, or doing anything even when its harmful for you (so long as it's legal). The parentheses are the differentiating point between "shady" and "scam" businesses.

This doesn't necessarily mean that you shouldn't buy from them occasionally (hello ryanair), but you should take every measure at your hand to avoid it and/or protect yourself from them. This includes using throwaway email addresses, refillable debit cards, etc.

If I happened to be an investor in that company, I would first push for good practices before it's too late. If that fails, I would do anything possible to get my money out of there. Apparently you and others like you do not think the same way, so "shady" business practices won't die. I just hope that your grandma doesn't ever get tricked into losing much because of that, or you will feel really really bad that day.

[drstewart]

So you consider Netflix to be a shady and immoral business?

[PeterisP]

I looked at the image you provided.

This is fraud, pure and simple - if this is somehow legal and within USA consumer rights laws, then it's not a sign that the company is right, it's a sign that the consumer rights laws there are broken and need to be changed.

[adir1]

Wait a minute, if they are leeching so much money (even if some are supposed 'credit for future') from (mostly) unsuspecting Customers - WHY did they need so many millions from Investors also, in series B and series C also?

Also - Aren't you worried that Credit Card processors (Visa, MC, Amex) will decide to just Cut Them Off permanently, due to excessive complaints? That has happened before to other "legit" recurring payments establishments. This is especially true if they Charge for "future" products, that is collect fee and don't Ship any product.

[perlgeek]

The mere fact that the costs for VIP membership are not listed in the same box as the other prices you pay sets off my internal fraud detector.

If you really don't want them to look like scammers, make sure they include the monthly price right there.

[Angostura]

As someone who does some UX that page is clearly designed to mislead. I would expect the majority of users' eyes to skim over that right hand column, interpret it s an invitation to sign up for a VIP program they aren't interested in and hit the Checkout button.

It's well designed for your purposes. Appallingly designed if you actually want someone to notice that they are signing up for an ongoing bill.

Still, I learned something useful about Matrix Partners today.

[skue]

Why am I not surprised that the Series A VC is with Matrix? They seem to go out of their way to earn a bad reputation:

http://www.boston.com/business/technology/innoeco/2009/11/th...

(Far more details on TheFunded for those who are members.)

[uptown]

You want to know how to make it crystal-clear what the buyer is opting-into? Add the VIP membership as a line-item in their cart with an explanation of what it is underneath that item.

I bet they'll never ever do that.

[tripzilch]

> We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company.

I don't think anyone is pleased to know that you believe this is to a scam company.

> I just went to the site -- you can do this -- picked a random pair of boots and put them in my shopping cart. I then clicked checkout, and here is what that page looked like:

> http://imagesup.net/?di=15138026329215

Yup, that's misleading.

> Seems pretty clear to me. You can get the boots for $39 if you join the VIP program. "With this purchase, you will be activating your VIP membership"

Yep it's pretty clear to me, there's a pair of boots in the shopping cart and you can continue to checkout.

> It's in plain English, and in the same font size as everything else on the page.

Fontsize schmontize. The checkout button is bigger.

The "checkout with no monthly fee" not-really-a-button is both smaller and misleadingly labeled.

It's also in muted colours, and it is very purposefully placed AFTER the big bright pink checkout button.

In the sidebar, where you normally place information that leads away from the current task (reviews, 'recommended items', advertisements, etc).

YOU are being very dishonest if you claim the above is not purposefully misleading.

Is there ANY reason why these terms are not in between the shopping cart and the checkout button? Any reason except tricking people into missing this rather important bit of info?

Because all other websites that actually want you to read those terms do so. They even make you check a checkbox to pull your attention to it.

You know why other websites do that (oh yes you do), it's because they don't want to trick their customers.

The fact that you're defending this and feigning ignorance makes you quite scummy as well.

[r0h1n]

> We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company.

I'm sorry, but the second half of your sentence does not follow from the first.

Your due diligence as an investor in no way reassures users that they are not being scammed. For instance the very "dark patterns" that Justfab seems to be relying on (https://news.ycombinator.com/item?id=6455927) might look great to you as an investor focused on increasing revenue and profits, but are designed to trick users.

That said, kudos for jumping in to defend your investee!

[NelsonMinar]

jdh's user page here on Hacker News says "VC at Matrix Partners. 10 year entrepreneur -- founder of Betfair (UK based, IPO) and eHow." That appears to be Josh Hannah: http://www.matrixpartners.com/team/josh-hannah/

Due diligence cuts both ways. If you're looking to raise money for a startup, research the VCs you are talking to. Consider their other investments and the way they conduct business.

[wenxun]

This is their previous checkout page:

https://news.ycombinator.com/item?id=4592827

[anonymoushn]

The previous one seems less deceptive - it makes the user check a box that mentions the VIP program.

[shiloa]

Thank you for this.

I was going to say OP's (your) girlfriend went through this 8 months ago, which probably meant a completely different looking checkout page. We all know startups are constantly trying different things in their UI to increase conversion.

[agsamek]

Thanks. For me - they are and were good enough. In particular you can get your shoes for past credits. This is far from scam.

[rjbwork]

You're being disingenuous. I don't think it was at all obvious, and it took me at least 10 seconds to fully realize where these extra charges were described, and that's only because I knew it was there somewhere. It took another 5 seconds to find the link to the place where you can buy it as a "regular" member.

This is automatic and opt-in, and non-obvious opt-out recurring membership fee. It's scummy and the default should be to purchase as a normal member, then try to genuinely upsell me in the sidebar. It's the equivalent of being automatically enrolled in amazon prime when I go to buy anything from amazon, and having to click a tiny link to the right that says "don't enroll me in amazon prime, just let me buy this" if I don't want amazon prime.

The entire shopping cart is an example of a dark pattern. http://darkpatterns.org/ and I personally wouldn't use a site whose entire business model clearly hinges on tricking or ensnaring its customers.

[mruniverse]

I'm happy you're an investor and I hope you get everything you deserve.

[franze]

from your HN profile

> founder of Betfair (UK based, IPO) and eHow

"betfair" is an oxymoron, a fair betting company is a betting company that does not stay in business long

"eHow" is the pioneer of the "content farm" business

"justfab" fits quite nice into this portfolio

[skelsey]

Did his reference to Betfair and eHow just disappear?

[grey-area]

I just went to the site -- you can do this -- picked a random pair of boots and put them in my shopping cart. I then clicked checkout, and here is what that page looked like:

The reason for the dissonance here is that justfab.com works just like a proper shopping site (in fact very like fab.com), except it's also a subscription site which signs you up for subscriptions. This is a dark pattern which uses user expectations (this is a shopping site), to sign them up for something that very few people want (book clubs for shoes). If lots of people did want this, the site could be far more honest about what it does, but it's telling that it presents itself as a checkout first and a club second (in a sidebar that many won't read), and requires action every month in order to skip a payment. How do you buy the product you're interested in, is that the tiny 'checkout as a regular member' link on the right?

It's entirely up to justfab.com how they present themselves of course, and I do dislike internet mobs piling on to criticise a company, but I thought it might be useful for you to hear the measured reaction of someone coming across the page for the first time:

I'm surprised, having heard of fab.com, that you trade under the name justfab.com - this seems a little shady to me, but perhaps it's just a coincidence - I see that justfabulous (now justfab) actually started first.

Looking at the home, I see no mention of subscriptions or subscribe, even in the small print. If the default experience is a subscription, that should be your big selling point, not something hidden away - this makes me distrust you once I find out what the company does.

I'd never expect to be auto-signed up for a VIP program - if it is a VIP program, how can it add everyone automatically? That is not what VIP means and is misleading - this makes me distrust you.

On the home page, the clearest message is that this gives you recommendations, there is no indication of subscriptions - this makes me distrust you.

On the shopping page, the layout is very confusing if this is a subscription and not a purchase - there should be a clear choice, with equal weight, between buy and subscribe. Text in sidebars won't be read by around half your customers, because usually it's meaningless fluff. Putting a warning in a sidebar suggests to me the company knows exactly what it is doing - this makes me distrust you.

The default should be to buy, not to subscribe, or at the very least there should be an explanation of why you should subscribe beside the buy button - when I find out the default is a subscription but is not presented as such, this makes me distrust the site so much I wouldn't ever shop there.

So this build up of distrust is an accumulation of small fibs or misleading statements which build up until I no longer trust what the site says. Now I'm not the target market for your site, but I find it hard to believe that the lack of mentions of subscriptions is a mistake, or that many other people wouldn't be tricked by it until they had signed up and realised their mistake in the second month.

Folks are right to be skeptical -- a lot of businesses have done this, tried to hide the fact there would be future charges. Does JustFab?

I'm afraid it still does in my opinion, yes.

Your summary above is a great statement of what you think works about the company, and how it all works, but it's at odds with the presentation of the site, which is far from clear or honest. If I hadn't read your statement from going to the home page and shopping pages I wouldn't have understood that subscriptions are the default.

If you don't want the site to have a shady reputation, it needs to be far clearer about what the proposition is to customers. Being completely honest and upfront with customers will lose you some profits in the short term, but make it more likely the site will prosper long term.

Perhaps consider a choice for customers - build up style recommendations and buy a la carte at higher prices OR build up style recommendations and subscribe for lower prices?

[theklub]

Their target market is clearly "stupid customers who don't fully read pages and probably don't fully read credit card statements either"

[6d0debc071]

> I just went to the site -- you can do this -- picked a random pair of boots and put them in my shopping cart. I then clicked checkout, and here is what that page looked like:

http://imagesup.net/?di=15138026329215

You must realise that people are just going to follow their eye down the screen to the checkout button and assume that it's going to work like every other site. Putting something off to the side in the same font as everything else is what's misleading - it's likely that some significant number of people are going to click through without realising what they're signing up for. If there were a confirmation screen that just said 'Hey, this is a subscription!' Or something like that, then it would be less shady. As is it seems dishonest to claim that it was 'clear'.

[stigi]

| http://imagesup.net/?di=15138026329215

"Continue Checkout" surely is not the same as "Continue Signup" and definitely not the same as "Become a member of our VIP club for 39$/m".

A sustainable business model wouldn't need to trick people into this. It would broadly (not in small print as it's done right now) advertise the benefits of the VIP program and convince people to sign up.

[CRidge]

People scan web pages - they don't read them. Especially in a typical scenario like this, you just check that you've ordered what you thought and look at the price and move on the the wizard.

I looked at the picture you linked to, and even when I knew what I was looking for, I spent at least 5 seconds before I noticed the VIP membership. 5 seconds is more than I'll use on a step like this when purchasing something.

In my mind this is a scam and I will not recommend anyone to use this site. Don't get me wrong - I like the business idea in general, but there should be an option during checkout where you have to actively choose if you want to be a member or not. Anything which cost you money (especially recurring fees) should always require an active action from the customer!

[ttctciyf]

If purchase entails buying into "VIP membership", why doesn't that show up in the shopping cart, where people are actually looking?

If purchase commits the buyer to additional monthly payments, albeit under some conditions, why isn't the user alerted to this in the shopping cart, where they are looking?

At what point does a UI disaster become a scam? As an uninvolved observer, somewhere around here I'd have thought.

[mvembu]

Mr. VC, great explanation. You blame it on the purchaser for the poor usability & cheap business manipulation. Customer buys a shoe, you added a VIP membership by default & you wanted customer to remove that before checkout.

Why can't you just have a intermediate page saying "Save 50% by subscribing to VIP membership at $39 / month" with all the explanation & have "Yes, subscribe me as a VIP member" & "No Thanks" instead of adding that by default ? JustFab won't do that because they know conversion will be much lower.

In every site I have purchased, I have never seen this experience. So how do you want me as a user to SUSPECT a monthly recurring charge like this ?

[satjot]

jdh - is this a scam? http://i.imgur.com/s9bsLzK.png

[jaap_w]

Ok, it's not illegal as I look at it. But it still feels like shady business. People tend to focus on the checkout button and don't realy see the VIP-announcement because it looks like a kind of advertisment. People are therefore (at least in my opinion) tricked into a subscription. It's not a way of doing business I like.

[mcv]

> http://imagesup.net/?di=15138026329215

This is definitely sleazy. The monthly payment is not mentioned anywhere near the pricing info. The page is designed to look like you make a one time payment, and only at the very bottom of the sidebar (and you know very well that sidebars never get read) does it mention that they're charging you every month.

It is obvious that many people will miss this. The creators of this site intentionally mislead their customers.

[solnyshok]

@jdh - how long it will take you to realize, that the biggest scam they pulled off were those financing rounds? EDIT: Just noticed that you were a round A investor. Good for you then.

[Fuxy]

If they're being so clear why are they exploiting advertizing blindness to inform their customers of the recurring charges.

Why isn't there an entry after the "TOTAL" informing you of the subscription charges.

They do count as charges and should be shown in a statement listing all charges.

[photorized]

How can you compare this company with Netflix? Netflix is advertised as a subscription service, and there are no hidden charges.

Your company's business model is based almost entirely by hiding charges.

The fact that you successfully tricked a million people does not make it Okay.

[coolrhymes]

I usually dont comment on HN but just came to say you're full of shit. Thats a classic dark pattern on tricking customers into things that they didn't want in first place.

[DanBC]

> I just went to the site -- you can do this -- picked a random pair of boots and put them in my shopping cart. I then clicked checkout, and here is what that page looked like:

> (http://imagesup.net/?di=15138026329215)

> "I wonder how much of this $100 million are from people like my girlfriend who simply didn't read their entire 2,500 words Terms of Service and were unaware that they were charged $39.95 a month for nothing" -- Seriously, please look at the link above to the checkout flow and tell me that's how you see it, that you have to read the 2,500 word TOS to figure out that this is the case.

That screenshot looks pretty bad to me. I'd expect recurring charges to appear in the same bright pink colour, and in the same "sub total, total continue checkout" box, as the other charges.

[znt]

Thanks for being upfront about your affiliation with a shady business practice, this way startup founders can skip you right away when they look for credible investors.

[alan_cx]

Or, scam type start up founders know where to get investment from.

[vagarwa]

$100MM+, you should at least expect a proof read page? "with this purchase your are activating your VIP Membership"

(I am just going by the text on the image you have supplied)

[Peaker]

I hope you, as an investor in this company, are also held (at least financially) liable for this scam.

Unfortunately, you're likely to greatly benefit from scamming so many people.

[btmorex]

JustFab is a trash company and you're a trash investor. They won't last and you won't last.

[Jare]

> More than half of the people who subscribe to the service are still subscribers after two years

In the context of the original poster's story, this reply only reinforces the idea that JustFab is scamming many many thousands of people and not just the odd person here and there.

[RougeFemme]

If I went to your site, I would see all of that text, choose NOT to read it and then choose NOT to purchase the shoes. Because I would recognize that there was something hinky and I would not want to expend the mental energy to figure out what it is. And I would NOT return to you site or recommend it to anyone else.

I buy running shoes from an online retailer that also provides a VIP membership. And it can be clearly understood in 5-10 seconds. And you have to opt-IN to the membership and opt_IN to auto-renewal of the charge. And guess what?? It's 1.99 per YEAR - clearly not a great source of income to the company. And my discount is considerably more than 1.99. (I guess they just don't want me to check out as a guest.)

[joonix]

Are you kidding me? I don't even see a price for the subscription fee anywhere on that page. When you buy something, you expect to see a price when you checkout your shopping cart. Do you buy groceries and pay for things that don't show up on the register too?

People are conditioned to get enrolled in things like loyalty/rewards clubs that give points for purchases. No big deal. That's what this looks like if you happen to notice the block in the upper right corner. Most people ignore what's in that area anyways. You're full of shit.

You should lose your job for being unable to find a better investment for your clients' funds than a scam website.

[xmodem]

I was with you right up until i looked at the screenshot. It looks like it has been very carefully laid out and A/B tested to optimize for the maximum number of signups, not for making sure users know what they're signing up for.

[kriro]

It seems that you invested in a scam. Hopefully they will be out of business soon.

[51Cards]

Here's the biggest issue with this checkout page... there is a Continue Checkout button at the top right... about as far away from the checkout and membership details as you could put it and very likely to be one of the first things seen. This is VERY intentional misdirection to induce quick checkouts before people read the details. I don't see how this isn't obvious.

[harryh]

Josh, this is a bunch of malarky. You should be ashamed of yourself.

[zazi]

If what you say is true, Justfab isn't a scam company, and most of the customers know about the monthly fee, they should have no problems making the fee explicitly clear on the checkout page.

Why hide it like you are doing so now? In the sidebar, where ads are usually placed (and ignored), and in non-emphasized font.

[jasonlotito]

Here's your screenshot, with the bottom part cut off. The part below the shopping cart. This is important, because the shopping cart is also the Order Summary.

http://i.imgur.com/dmxIwHr.png

So, it's obvious that the intent is to hide the fact that membership is $39.95 a month. The goal is to trick the person into getting the membership. I guarantee that's intentional.

Porn sites don't even go this far.

Edit: I should also note that you are fabricating a story here.

"By asking members to commit to come back to the site once a month..."

You aren't asking. You are including the person automatically, and requiring them to opt-out. And you are keeping that as hidden as possible by including this important information "in the same font size as everything else on the page."

[barrynolan]

Thanks for jumping in. It's great to get 'the other side'.

That said, where I checking out, my eye gravitates toward that big red 'Continue Checkout' button, not the fact that I'm signing up for $479.40 a year. A more blunt but upfront UX would hit them with interstitials.

[aestra]

You sound like the Ebay scammer that got pwned by Judge Judy on national TV who just kept saying "it's not my fault she couldn't read."

http://www.youtube.com/watch?v=W5i_m9k7Wos

[marklittlewood]

On your example, the most obvious buttons are bright pink saying 'Continue Checkout' with the VIP Membership program in a separate set of boxes on the side. They are definitely not presented as part of the workflow of the checkout process for a consumer.

'With this purchase you are activating your VIP membership' is smaller and in black. Incredibly easily overlooked.

It is possible that the JustFab UI designers aren't very good and have made a terrible mistake but the overall look and feel of the rest of the site would suggest that they have put a LOT of thought into steering their prospective customers down a very clear route to purchase and know EXACTLY what they are trying to do here.

[nachosarefunny]

Not sorry to contradict but this is usual trickery used by scammers. This page and checkout flow are obviously designed around making people not understand they're subscribing to a recurring premium fee. I have a hard time believing you, as a VC, are unable to recognize this as this usually means a high short term ROI.

If it weren't trickery you'd have two same size button next to each other, one saying "VIP checkout" and the other "regular checkout " but this would significantly reduce the number of subscriptions.

[GrinningFool]

" More than half of the people who subscribe to the service are still subscribers after two years, which is unusually high for a subscription service."

In other words, nearly half of the people who get tricked into subscribing cancel?

Let's also not forget that this will typically be on a credit card - many consumers do not examine their statements closely and will just continue forking over minimum payment. (Of course we won't forget it - it's part of the business model, after all.)

[dools]

What a mother fucker. Go to hell.

EDIT: haha founder of betfair and eHow. Delicious.

[darkarmani]

> Under "How VIP Membership Works", it explains: " If you do not take action between the 1st and the 5th of the month, you will be charged $39.95 for a member credit on the 6th. Each credit can be redeemed for 1 JustFab item, so use it to shop later!"

How much does the service cost that takes action automatically for you between the 1st and the 5th? Isn't this what computers are for to do things automatically for you?

[juanbyrge]

LOl that screenshot proves beyond a doubt that they are a scam company. What the hell are you guys thinking? Those bastards should be in jail in my country.

[cowls]

I think trying to defend this scam was a really bad idea.

[alan_cx]

I think it is interesting to see how an investors in such activities tried to justify themselves.

[maxmem]

It's put in the bottom right corner, where if someone isn't parsing the whole page will be pretty sure to miss it. Most people scan pages http://www.nngroup.com/articles/f-shaped-pattern-reading-web... and it's conveniently places where people tend to skim or skip.

[JaakkoP]

Now I know I never need to go for Matrix Partners for anything, knowing they have people like this person working there.

[jblow]

There's no nicer way to say this: you're scum. Have fun trying to sleep at night.

[kitsune_]

What a load of bullshit, this page is clearly designed to trick people into a subscription.

[glazskunrukitis]

No, it looks excatly like a scam.

[darkarmani]

How is this any different than the Nigerian scam emails? It seems pretty clear that Nigerian scam emails are in fact a scam, so anyone "falling" for them are just agreeing to be scammed, just like JustFab.

[mariusz331]

I think you know what you're saying here is wrong and that JustFab is intentionally misleading.

However, one must admire how committed you are as an investor to go down hard with this sinking ship.

[Pitarou]

So, Mr. Investor, you believe that this is normal, acceptable business practice, and you can't imagine why anybody would put a stop to these guys.

And I bet you wonder why VCs get a bad name!

[davidascher]

Is the NPS measured with visitors to the site, customers on site, or people being charged? I'd wager for some companies the differences could be telling.

[NonEUCitizen]

Instead of defending the indefensible, you should go to your next board meeting and tell the CEO s/he has to change this.

[madaxe]

This is bait and switch. You liken it to h&m or Zara - but they offer continuity services - they do not trick their customers. I may let them know (as I know C-levels at each) that you are attempting to trade off their good names. I am surprised you have not yet been fined under the distance selling regulations.

You can self-justify all you want, but you just smelt green and wanted in on the dodgy action.

Can you say "Columbia house record club?"

You exploit people. Be ashamed.

Edit: I see from your profile you founded betfair. This all makes rather more sense, given the cloud that has perpetually hovered around that business, due to them, y'know, not paying out when people win "too much". Also repeatedly fined by the Advertising Standards Agency, IIRC.

You like your dodgy businesses. It's your call as to what you do, but a business that provides mutual benefit, rather than being parasitic, will survive in the long term. If you bleed your customers dry and rip them off, they will go elsewhere. You talk about retention, but you are not retaining - you are duping and imprisoning. I dare say you do not care, however, so long as the money keeps rolling in, and will simply move onto the next scam when this one gets too hot.

[DominikR]

I usually don't do this but I hope you'll do some time in prison for this scam.

You can do mental gymnastics all day long if you want to, but it'll be hard to find anyone that doesn't think that what you are doing is malicious fraud.

Edit: I see you are the founder of eHow (content farm) and Betfair (gambling). It doesn't surprise me at all. Maybe next time you could invest in human trafficking and brothels.

[estel]

For what it's worth, eHow only really moved towards being a content farm after being sold to Demand Media. I don't think it's fair to compare legalised gambling with human trafficking...

[tiatia]

"if we assume the investors in this business do perform due diligence, is there another possible explanation? "

Wrong. Investors decided that they can make money with a business with an obvious predatory business model. It might be good money - at least in the short run, in the long run you run out of stupid people as I have seen with other types of such businesses - yet it is a company with a terrible business model.

Yes, I have looked at the picture you provided.

Shame on you.

[lawnchair_larry]

I started reading your post thinking you sounded level headed and that I'd hear you out.

I checked the link. Nope, you are scum. This is theft. Shame on you.

[unclebucknasty]

Same here. In fact, when I read the OP, I thought it was a little emotional and perhaps all a misunderstanding. I then read the investor's reasonable-sounding response, which lent more credence to that notion.

Then, checked the screenshot and there was no question. Pure scam.

[ebbv]

This comment is a perfect example of how people who are involved in evil business practices justify it to themselves.