Hermès sued over Birkin bag sales model

Two California residents allege that Hermès is illegally requiring customers to purchase ancillary products before offering them the opportunity to purchase a Birkin bag, in an illegal practice known as “bundling”. The company’s sales associates are pushing the scheme by pressuring customers to buy shoes, scarves, jewellery and other items for the chance to buy a Birkin, according to the lawsuit. “Only consumers deemed worthy can buy one.”

“The binding product is separate and distinct from the ancillary products that consumers must purchase. Plaintiffs have alternative options for the ancillary products and would prefer to choose among them regardless of their decision to purchase Birkin bags.” One plaintiff explains that after spending “tens of thousands of dollars” at Hermès, she was told that Birkin bags were reserved for “customers who have been consistent in their support of the brand.” The other, meanwhile, was told to “buy other items and accessories”.

The lawsuit uses the “sales associate compensation structure” as evidence of the company’s unlawful practice, claiming that retail employees do not earn commission on Birkin sales. Instead, sales associates earn 3% commission on ancillary products and 1.5% commission on non-Birkin bags. Hermès has previously denied the claim. “Hermès strictly prohibits the sale of certain products as a condition for the purchase of others.”

“Although Hermès salespeople receive no commission on the most valuable and coveted products sold by their company, defendants direct them to use Birkin bags to compel consumers to purchase ancillary products sold by defendants (for which the salespeople receive a 3% commission) in order to accumulate the purchase history necessary to be offered a Birkin bag,” the lawsuit states.