The subscription box industry is booming – raking in billions of dollars a year. But one company has riled up hundreds of customers. They say they paid for boxes they never got, and vendors say they’re out big-time money, too.
There are subscription boxes for premade dinners, beauty products and even shaving supplies.
Hillary Jones has subscribed to Alltrue for years. It’s a quarterly box full of socially conscious products.
“The entire purpose of subscribing to the box, for me, was to support these brands and meet new brands and find out about these new companies,” Jones said.
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Jones paid for a year’s worth of boxes upfront, about $200. But she’s not getting them all, and she’s not alone. The Better Business Bureau says it’s received nearly 400 similar complaints, and the company doesn’t respond.
“You try to call customer service at this place and they’re overwhelmed. They don’t have any customer service. There’s an 800 number that doesn’t get picked up. The information email address doesn’t get responded to,” said Steve McFarland with the Better Business Bureau.
Product suppliers are also chiming in, saying the company hasn’t paid them. Majid Mousavi with Mudmasky told the I-Team Alltrue has $500,000 worth of their skincare products it hasn’t paid for.
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“We don’t have any investors. We grew this company by ourselves with our own money. So it’s a lot of money for us,” said Mousavi.
Attorney and former Southwestern Law School professor Edward Wolkowitz says there likely isn’t much hope that vendors or customers will see any money. That’s because the company recently filed an Assignment for Benefit of Creditors, essentially an alternative to bankruptcy.
“Generally these are companies that are financially distressed and they can’t pay their bills,” said Wolkowitz.
This assignment lets a new owner take over the business and its assets, and nothing more.
“The old business has found a new buyer. And that new buyer is taking over the operations of the old business. But they’re not assuming any of the liabilities,” said Wolkowitz.
The I-Team tried to track down the former and current Alltrue owners. But no one responded to our emails. And the addresses on paperwork filed with the state led us to a Santa Monica apartment building and a Bay Area UPS store.
“You should communicate with your vendors, the artisans creating things for you and your subscribers,” said Jones.
But Wolkowitz simply has blunt advice to any consumer paying for something upfront.
“If you’re willing to do it, then you should be willing to take the risk that something is going to go wrong and you won’t see what you prepaid for,” he said.
