Class Action Settlement Sets Up Massive Cosmetics Giveaway

Do you like free makeup? How about free cologne? Macy’s, Bloomingdale’s, Filene’s, Lord & Taylor, Neiman Marcus, Nordstrom, and Saks Fifth Avenue have all settled a class action by agreeing to give away $175 million worth of cosmetics starting early next year. No proof of purchase is necessary, but the freebies will be handed out on a first-come-first-served circus basis. Details inside…

The lawsuit alleged that department stores and cosmetics companies conspired to sell products at the manufacturers’ suggested price only – never at a discount. It also alleged that special promotions were coordinated in a way that ensured there would be no competition among stores.

In addition to the $175 million giveaway, the department stores and cosmetics companies agreed to pay up to $24 million in attorney fees, and enter a court order that prohibits them from engaging in price-fixing schemes and certain marketing practices.

The settlement was originally reached in 2004, as reflected by the dated registration site, but the giveaway will start in January 2009. Consumers will be required to sign a form declaring that they purchased the covered products between May 29, 1994 and July 16, 2003 in order to receive free merchandise worth up to $25.

To sign up for giveaway notifications, call (877) 604-5776 or visit the settlement’s website.

A sweet deal in antitrust case [The Boston Globe]
Cosmetic Cases Information Website
(Photo: Getty)

Comments

Edit Your Comment

  1. pinkbunnyslippers says:

    Good lord – this suit has been going on for literally 4 yrs. I entered it back then!

  2. Dustbunny says:

    So does this mean that there will actually be price competition from now on, or do you get a free lipstick and it’s business as usual?

  3. thelushie says:

    Is this legitimate? I didn’t know it was illegal to sell at the manufacturer’s suggested retail price. Why have it if you can’t sell at it?

  4. timmus says:

    $24 million in attorney fees

    This is just wrong. I’m sorry, it should not take $24 million to compensate some attorneys for some consumer protection work. The system needs an enema.

  5. MickeyMoo says:

    @thelushie: I think the illegality stems from collusion on the part of manufacturers with competing retail outlets, ie: pricefixing

    conjecture on my part: should a vendor choose to undercut the MSRP, they would no longer be an authorized vendor or would have to pay a higher wholesale price for product, thus eating into their profits. Not unlike the Microsoft Anti Trust trials of the ’90’s

  6. thelushie says:

    @MickeyMoo: Ohhhhh, thanks for the clarification.

    I honestly think that this antibiotic I am on is making me stupid.

  7. iCanhasLs2plz says:

    My ebay store is gonna make a killing off of this!!!

  8. Stavro Mueller says:

    @timmus: It’s an (up to) 14% fee on a 5+ year long case. Pretty cheap if you ask me, since my lawyer charges 35%. Besides that, the fee is being paid by the company, in addition to the $175M ruling, it’s not coming out of anyone’s pockets.

    Perhaps you would prefer to see the lawyers come away with nothing more than a packet of free makeup and a gas card to cover travel expenses for their five years of time that they could have spent fighting more important cases?

  9. Robobot says:

    The registration site isn’t loading for me. It’s probably facing a MASSIVE amount of traffic, so anyone interested in registering may want to try later.

  10. Hongfiately says:

    @Stavro Mueller: The companies are paying those attorneys fees, huh? The fees will be passed on to customers and/or employees.

    Lawyers should be compensated for their work, the same as anyone. But let’s not think that those fees are paid in a vacuum.

  11. Geekmom says:

    Couldn’t get to the registration site either close to midnight central time. I might call that number tomorrow. I know I bought purfume and my grandmother has bought some as well. I’m going to call her and tell her as well.

  12. Reeve says:

    @thelushie:
    I don’t think selling at manufactured suggested prices alone was the problem. The problem was an antitrust price fixing issue that the case was based on.

  13. mythago says:

    @Hongfiately: Actually, the companies’ insurance companies are paying those attorneys’ fees.

  14. Sorshha says:

    Are those the words “Free” and “Makeup” in the same sentance??? Sign me up… oh wait i just did

  15. loueloui says:

    This is why I read Consumerist. Consumer product info, and weird-ass artwork. Don’t get me wrong, this picture makes astatement. Unfortunately that statement is, ‘This is fugly’.

  16. Meathamper says:

    Let the riding commence…

  17. ,I really wish lawyers got the same compensation as regular people. I don’t think it’s fair for them to get cash. While their clients get something that probably costs $10,

  18. ZekeSulastin says:

    @hypochondriac: Well, last I looked, in most non-class-action suits – which obviously have MUCH fewer people to share the pie with – people tend to get cash, in some cases far more than they deserve but cash nonetheless.

    Your idea concerning the destruction of rewards for a lawyer in a class action is obviously crap as far as actually having them happen AT ALL, but some might say that’s a good thing, so who knows which way to go?

  19. AshleyKeen says:

    Heh. This is awesome. I’ve never felt put out by the prices of professional cosmetics, I’ve always felt they were fair and reasonable (granted, I also usually wait and buy when they offer a ‘free’ gift) so essentially, as far as I’m concerned, this is getting stuff completely for free :D

  20. Carso says:

    I think it’s important to point out here that the cosmetics, fragrance, and jewelry departments in all of these stores (including Macy’s) are all leased to separate companies. That means that other companies (Revlon, Lancome, etc.) rent space in our store and sell their products in that space. The employees in that area are not Macy’s employees – they are employees of the leasing company. Also, the companies that operate in our stores are free (within certain limits) to do pretty much whatever they want in terms of sales, promotions, or advertisement. This, incidentally, is also why Macy’s coupons are almost never good for cosmetics, jewelry, or fragrances – because they are separate companies not necessarily bound by our promos.

    But yeah, otherwise this article is pretty much right on the money, unfortunately.

  21. HogwartsAlum says:

    Woo hooo! Free makeup!

    I KNOW I bought Lancome from Macy’s during that time period. Not my usual makeup because it’s way expensive, but if I can get a free lipstick, I’m all over this. I lve their lipstick. :)

  22. angryhippo says:

    “the freebies will be handed out on a first-come-first-served circus basis.”

    The lawyers get theirs, the victims get to fight for the leftovers. Ahhh, justice.

  23. mythago says:

    If only lawyers worked for free for the benefit of all, like you do. Oh…wait….

  24. BrianDaBrain says:

    Can’t say I care much about free make-up… but I absolutely LOVE the picture!!

  25. SOhp101 says:

    oooh… free $18-25 worth of product after I know people who’ve spent hundreds if not thousands a year on this stuff?

    Even their “free with product purchase samples” that they usually include with some combo purchase “retails” for $35+, and each of those bottles have barely anything in them for more than a couple of uses. Usually just asking for samples after a large purchase will net you more product than what those things give you.

    This will be a joke.

  26. dyzzypyxxy says:

    Just my opinion, but lawyers should expect to be compensated on an hourly or daily rate according to their years of training, their relative skill and their experience.

    Plaintiffs should be compensated according to how much they lost by the illegal price fixing. i.e. we never got to buy cosmetics on sale. Presuming we would have only bought the cosmetics on sale, we deserve to be compensated somewhere between 20% to 50% of what we spent. Unless you kept all the receipts, how can you calculate your loss?

    For me it probably adds up to around $50 per year. No idea how many years I bought the various brands, though. So if I can score a freebie of my favorite makeup, it’s as good as an apology from the manufacturer. Works for me.

    Works for me.

  27. ElizabethD says:

    Not loading…. We’ve overwhelmed the site!

  28. AMetamorphosis says:

    I wish the lawyers got 18 – 25 dollars worth of makeup as their compensation.

  29. mythago says:

    @dyzzypyxxy: That makes it a little hard to hire a lawyer unless you’re wealthy. “Contingency fees” are just a fancy term for being paid on commission – a payment method that free marketer types otherwise think its wonderful.

    But hey, if you’d rather pay a lawyer $200+ an hour regardless of the result, you can probably make those arrangements.

  30. docfreud says:

    I’ve tried accessing the form to sign up since this was first posted. I don’t think it’s a case of us overloading it. I think the site is dead.

  31. arilvdc says:

    @Carso: Actually this is untrue. While some lines are leased, mainly MAC, the majority of people working at your macy’s counters are employed through macy’s. The only ones who aren’t are the special event vendors and makeup artists wo come in for time to time. So the argument that the coupons aren’t valid on those items doesn’t really work. And while I worked there, there was a strict schedule for sales/promotion times. Your posters wouldn’t go up while nordie’s across the way were up too. Our gifts would only overlap during christmas, and then they would be the same thing. So this lawsuit seems very valid to me.

  32. ohforheavensake says:

    I’m not an attorney but I’ve seen plenty of friends and family go through law school and it’s hell on earth. Lawsuits are incredibly expensive and plaintiff’s attorney firms often assume that cost. If they lose, they get nothing. Quite a risk. So yes, when a case is won the payout can be big. Also, we aren’t talking about two or three attorneys or law firms here- we are talking about dozens of firms who devoted five years to this case. When you consider the man hours, time resources, physical resources, and pure labor that went into the preparation of this case, I’d say the compensation is pretty fair.

    Also, to answer a question asked previously: yes, you can charge whatever you want for what you sell- WITHIN LIMITS of the law. What you cannot do is price-fix, price-gouge, or limit competition as defined under the Sherman Anti-Trust Act-which the defendants of this were accused, as well as violation of the Cartwright Act and UCL. Did anyone at all in this thread actually bother to read this case? It was a NEGOTIATED SETTLEMENT for crying out loud. The defendant AGREED to this- all of it.

    It is often impossible to really actually equitably settle a class action because of the nature of how many potential plaintiffs are involved. It is almost impossible to equitably comensate everyone involved and its’ not really the point- the point is really to make sure the behavior stops. It will be interesting to see if it does.

  33. lipstickbimbo1 says:

    I heard that some of the retailers want to offer these free products on January 20th. I dont know about the rest of you but I will be on lipstick rehab that day. I find it disrespectful to offer free products and take the focus off our presidents day to be sworn in in office. I hope they dont offer these gifts on inuguration day!!

  34. lipstickbimbo1 says:

    I heard some of the retailers are offering free products on January 20th. I think they should pick a Saturday for it. Its silly to pick the day our president is being sworn in as a day to give away products. Im going to be on lipstick rehab that day. I find the inuguration is far more important than free lipstick.

  35. Sam Kigelman says:

    I honestly feel bad for all these companies… No one was hurt here, or… even misled, from what I understand.
    And… come on, a quality cologne costs $40-$60. My aunt got me Coolwater for a lil over $60 a few years ago. But how in the world do we know when we bought the products?
    I don’t mean to look a gift horse in the teeth, but… wouldn’t a $25 gift certificate make a looot more sense..?

  36. Anonymous says:

    I went to a Macy’s today (Jan 22) and there was a sign at the entrance informing everyone that they are out of stock of items for the class action lawsuit. I then went to Nordstrom’s in the same mall, and they only had Clinique Night Serum and Clinique Daytime Moisturizer left. I’m not complaining since I got something for free!