Fashion Faux Pas, As FTC Fines Fashion Nova A Record $9.3 Million For Customer Refunds

CBx Vibe:High Fashion” by Roddy Ricch

By Christian McKenzie

  • The FTC fines Fashion Nova $9.3M in settlement fees for violating its return policy by issuing store credit only
  • Famous collaborators include Cardi B and Megan Thee Stallion

Fashion Nova, the not so fast-fashion label beloved by Instagram models has been caught by the government for violating their own customer shipping policies. The Federal Trade Commission has demanded Fashion Nova pay $9.3 million in settlement fees, the highest amount ever charged for violations of the mail-order rule. Some of their famous collaborators include Cardi B and Megan Thee Stallion, but the most Googled fashion brand has made some questionable business decisions leading up to and during the COVID-19 outbreak that’s costing them big money.

Why This Matters: Its success is rooted in a robust social media strategy, as Fashion Nova has worked with 3,000 influencers and posts every 30 minutes on Instagram. The label actually sent a text to customers encouraging them to use their stimulus checks to shop their online sales. All while customers have experienced shipping delays and issues with processing returns. Of the total $9.3 million payment, $7.04 million will be sent to the FTC for use in refunding consumers and $2.26 million must be refunded directly to consumers. Fashion Nova customers who received gift cards instead of refunds when the company violated the Mail Order Rule will be eligible for refunds under the settlement.

Of the total $9.3 million payment, $7.04 million will be sent to the FTC for use in refunding consumers

As an effort to recover from its global pandemic PR blunders, it launched Fashion Nova Cares with Cardi B. running until May 20th. This initiative will donate $1 million in emergency grants to people in need. All of these efforts seem to further solidify who Fashion Nova believes its customers are: “an urban demographic that’s not always prioritized by brands and retailers.” Black consumers are estimated to spend $1.5 trillion in 2021. Women control 70-80% of consumer purchases. Fashion Nova could become even wealthier if its customers are swayed by this apologetic gesture.

Situational Awareness: Fashion Nova has garnered negative press for perpetuating mainly one type of beauty: women with fair skin tones. However, inclusivity in fashion is resonating with customers right now. Brands like Aerie have had success in promoting body positivity and diversity; its sales rose 20% in 2019. Although Fashion Nova is noted for being size inclusive, it isn’t inclusive in other areas. This short-sightedness could eventually affect its popularity and sales which topped $554 million in 2019.

CBx Vibe:High Fashion” by Roddy Ricch

CONTRIBUTOR

Christian McKenzie

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