Lululemon's lawsuit against Costco highlights the rise of fashion ‘dupes'
It's not even the first time Lululemon has encountered what it says are knockoffs of its clothing, which often carry steep price tags of over $100 each for leggings and sporty zip-ups. Without specifying additional sellers beyond Costco in Friday's complaint, Lululemon noted that a handful companies have 'replicated or copied' its apparel to sell cheaper offerings — including those popularized online through hashtags like 'LululemonDupes' on TikTok and other social media platforms.
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Dupes aren't new
For years, marketers have rolled out less expensive fashion and beauty alternatives for consumers to buy instead of pricey designer brands. Unlike more traditional counterfeits, which are illegal copies of the product that feature an unauthorized trademark or logo of a patented brand, 'pure' dupes that resemble certain features of more expensive products are generally legitimate. They can even spark awareness of the original items.
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But the rising frenzy for dupes signals that many shoppers want a taste of luxury, but no longer want to pay for (or care about) getting the real thing.
Late last year, for example, discount chain Walmart created a buzz when it started selling a leather bag online that resembled Hermès' coveted Birkin bag. The $78 item — sold by Kamugo, which doesn't appear to have its own website — was a fraction of the price of the original, which goes from $9,000 to hundreds of thousands of dollars on resale and auction sites. Influencers labeled the leather bag a 'wirkin.' Other suppliers including BESTSPR, YMTQ and Judy were listed on Walmart's site selling similar totes.
When dupes venture into uncertain legal territory
Experts say some dupes move into shaky legal territory, including copyright and trademark infringement, particularly when a dupe marketer makes false claims about the duplicate or the original.
Look-alikes can also frustrate the targeted companies.
Following the viral fame of the 'wirkin,' for example, Hermès Executive Chairman Axel Dumas said he was 'irritated' and 'annoyed' by the cheaper look-alikes.
'Making a copy like this is quite detestable,' Dumas said in a corporate earnings call in February. Still, he acknowledged that it was 'quite touching' to see so many consumers want a bag with the Birkin style — and that 'difference in quality' was still evident, noting that nobody bought the dupe thinking it was from Hermès.
Meanwhile, Benefit sued E.l.f. for trademark infringement over its $6 Lash 'N Roll mascara, which is similar to Benefit's $29 Roller Lash mascara. But in December, a California judge found that E.l.f.'s mascara didn't deceive shoppers and didn't infringe the trademarks and trade dress of Benefit's item.
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That was the first lawsuit of its kind in E.l.f.'s 20-year-history, and the judge's decision was 'a resounding win for us,' CEO Tarang Amin previously told The Associated Press.
Amin doesn't like to call his version dupes, referring to them as 'holy grails' instead. 'The basic reality is we always put our E.l.f. twist on it,' he said. 'It's an E.l.f. product that's a much better value.'
Lululemon sues Costco
In its lawsuit, Lululemon argued that Costco had 'unlawfully traded' on Lululemon's reputation and that it was suing as part of wider intellectual property enforcement 'directed to retailers who have chosen to copy rather than compete.'
A message was left Tuesday seeking comment from Costco on the lawsuit.
The litigation could be more complicated because Lululemon also alleges that customers know Costco uses manufacturers of popular branded products for its private label Kirkland brand, although the companies involved don't reveal that information. Due to this, Lululemon claims at least some shoppers may believe that Kirkland-branded products are made by the authentic supplier of the 'original' products.
Lululemon accuses Costco of making duplicates of several producings, including its popular Scuba hoodies, Define jackets and ABC pants. Lululemon says one of the duplicates that Costco sells is the Hi-Tec Men's Scuba Full Zip, with the lawsuit showing a screenshot image of Costco's website showing the item priced at $19.97.
Lululemon found itself in a similar dispute with Peloton back in 2021, when it sued the exercise bike company over alleged 'copycat products' in its then-new clothing lines. Two years later, the companies announced a five-year partnership that included Lululemon becoming the primary athletic apparel partner to Peloton.
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AP Business Writer Michelle Chapman contributed to this report.
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Parker Seidel, a 26-year-old YouTube creator from Orange County, got blowback when he tested the limits of Costco's return policy with a series of stunts, getting his money back for a half-eaten chicken bake and three-week-old flowers he never put in water. Next up: Returning a Vincent Van Gogh Sunflowers Lego set after completing it. 'I was getting so much hate. I was like, 'Oh my god, I was not expecting this at all,'' Seidel said. For Juarez, what she calls 'carpetgate' blew up on TikTok, where she has 2.4 million followers. 'You are so classless,' one person commented. 'Girl what, your kids stained (the rug) and now you are making it Costco's problem?' 'You are paying for the perks of having products that you can buy and products that you can return,' she told USA TODAY. 'It's a really good way that they hook you in. I am sure that they make way more money off of us purchasing stuff than they lose from returns.' 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"Our view is, even with these changes, we still have the best return policy in the retail industry," former chief operating officer Richard Galanti told the Wall Street Journal at the time. A lenient return policy is even more important for today's inflation-weary shoppers, said Anna Brennan, principal analyst for club and specialty retailers at marketing data and analytics firm Kantar. 'It all ties back to reducing some of that stress and risk on the shopper and members' part, especially in an environment like the one we're in today, where every purchase feels particularly weighted,' Brennan said. 'I think that really helps the member make some purchases maybe they wouldn't have otherwise.' How Costco hooks you Come for the hot dogs, stay for the gold bars That was the case for Troy Pavlek, a 31-year-old software developer from Edmonton, Alberta. A Costco executive member since 2012, he says he pays to shop at Costco for 'the confidence that anything you buy in the store, the store will stand behind or your money back' and he has rarely had to return anything. While remodeling his house, he splurged on two $900 toilets. When the manufacturer refused to replace a cracked plastic piece that joined the lid to the toilet on one, he returned the other one unused and still in the box — minus the lid. Should I return this to Costco? Ethics debated According to Ayelet Fishbach, professor of behavioral science and marketing at the University of Chicago Booth School of Business, an ethical dilemma drives the spirited controversy over Costco returns: 'Should people follow the letter of the rule or the spirit behind it?' Fishbach got an inkling of where most people stood when she surveyed hundreds of consumers on whether they would return lightly worn clothing. About 40% said yes, but that number dropped significantly when they were asked if they would do it repeatedly. 'It seems many people are comfortable occasionally bending the spirit of a policy, and may even find it amusing, but hesitate to make a habit of it,' she said. Take Susana Rodriguez, a mother of seven from Henderson, Nevada. She returned a canopy used by her small business, Cocos Frios El Primo, after the wind tore it apart in less than two months. But Rodriguez, 45, said she draws a line for returns after a certain amount of time. Costco told her she could return a TV that was a few years old. 'I didn't do it," she said. "It lasted what it lasted.' Behind the Costco returns counter Costco employees on the returns front lines have seen it all, from dirty and stained mattresses to half-eaten trays of cookies. Then there are the shoppers who rent from Costco. Televisions bought before the Super Bowl and returned right after. Chairs and tables purchased for an event and wheeled in the next day. A couple of the staffers spoke with USA TODAY on the condition of anonymity because they feared they could lose their jobs. While they wish people wouldn't take advantage, they say the return policy does exactly what it was intended to do: It breeds loyalty, drives sales and entices new members. 'It's great because it gives members peace of mind,' one Illinois employee told USA TODAY. 'I'm sure that works in our favor all the time, because people buy things and then they decide they love them and it's worth keeping.' While most returns are accepted, some repeat offenders get flagged, a Connecticut employee said. One shopper kept returning lighting fixtures purchased nearly a decade ago as she remodeled her home, lightbulbs and all. After a few months, the store turned her away. 'That is pretty common,' the employee said. 'People will remodel their homes and they will literally pull up their flooring and return it.' In rare cases, when the return policy is 'really abused,' Costco revokes memberships, the employee said. But for most shoppers, she said, 'we'll take anything.' The store tries to donate as much as it can, she said, but some returns go to waste. Returned food that needs to be temperature controlled, for instance, gets tossed in the trash. She estimates her warehouse throws away 'a few hundred dollars' worth of food every day. But the policy usually benefits Costco, the employee said. She recalled one instance where a customer was torn between a Costco vacuum and a cheaper model from Macy's. 'I said, 'Well, what if you have to return it? Are they going to accept your vacuum return six months down the road? Probably not. But we will.' So she spent the extra couple hundred dollars and got it from us,' the employee said. Could abuse end Costco returns? Increasingly, retailers are under pressure to ditch anything-goes policies as fraud and abuse erode profit margins. Of the $685 billion in merchandise returned in 2024, $103 billion was lost to fraudulent and abusive returns and claims, according to a recent report from Appriss Retail. In 2018, L.L. Bean traded in its lifetime return policy for a one-year limit, noting that some customers expected returns for heavily worn products or items purchased at yard sales. Duluth Trading Company made a similar switch in 2019. Retailers have also begun charging restocking fees or for return shipping to recoup losses. Not Costco. It can afford to absorb the losses because it relies on a membership business model, analysts say. Last year it earned $4.8 billion in revenue from membership fees alone. Returns are an important part of keeping those members happy, said USC Marshall School of Business marketing professor Kristin Diehl. Research shows that shoppers often base purchases on how hard or easy they think it will be to return something. More than half of consumers decided not to buy from retailers due to restrictive return policies and almost a third of consumers stopped shopping at stores due to negative return experiences, according to a recent report from Appriss Retail. On the other hand, 7 out of 10 consumers say they made at least one additional purchase because of a positive return experience. Costco members are less likely to abuse the privilege because returns are tied to their membership and they don't want to get blacklisted, Diehl said. They also consider themselves part of the Costco community. The return policy fosters a sense of belonging and good will, something Costco has in bulk. It's also 'great word of mouth,' said Neil Saunders, a retail analyst at the research and analytics firm GlobalData. That's why it's here to stay, he said. Whatever "miniscule cost' from return policy abuse is worth it to Costco. 'It's one of the magical things people like about Costco,' Saunders said. 'There are certain things in Costco that are pretty set. The price of hot dogs is one of them, the return policy is another.' This article originally appeared on USA TODAY: Are shoppers abusing Costco's liberal return policy?
