The international skin care and cosmetics company Mary Kay is hitting back against what it is calling a “fraudulent couponing scheme” operated by the online digital coupon marketplace, RetailMeNot. Earlier this month, Mary Kay filed a federal lawsuit against RetailMeNot (RMN) alleging that RMN’s online coupon business violates federal trademark and advertising laws, as well as federal and state unfair competition laws.
At the heart of Mary Kay’s complaint is the company’s direct-sales business model. Since it was founded in 1963, the company has sold its products exclusively through a network of independent contractors known as Independent Beauty Consultants (IBCs), who then sell the products directly to consumers through direct sales channels such as house parties and personal websites. IBCs are not permitted to sell products through retail channels or brick and mortar establishments, and Mary Kay does not sell products directly to consumers.