I was recently looking at a letter that Mary Kay Inc. wrote to the FTC in 2006. The FTC was coming up with a Business Opportunity Rule to protect consumers, and MLMs were scrambling to get themselves an exemption. (MLMs certainly shouldn’t be confused with those scammy “business opportunities!”)
The gist of the rule that was implemented (and its later revisions) was that it:
- Would protect people who were getting involved in “business opportunities” (any sort of work-from home arrangement)
- Would require certain information to be disclosed to those getting involved
- Would require those signing up to have a waiting period (a period of time after being given the disclosures, before they could sign the contract).
You can see the 2011 version of the business opportunity rule (and the disclosure form) here. The FTC explains more about the rule here.
You might notice that MLM companies aren’t specifically discussed anywhere. So while the FTC doesn’t actually say MLMs are exempt from these rules, it’s pretty clear in the rule and the discussion of the rule that they aren’t really a part of this.
Why? Because the MLMs lobbied so hard to be exempt from it, because God forbid they’d have to make certain disclosures about how terrible the “business opportunity” is.
Mary Kay wrote their letter to the FTC as well, and I was amused by this portion of their letter:
Requiring a seven day waiting period will stifle this enthusiasm and lessen the chance of the individual’s participation and/or success. In our opinion the presale disclosure requirement is a significant barrier to entry – and makes the simple decision of becoming an Independent Beauty Consultant unnecessarily burdensome and complicated while delaying the ability to “hit the ground running” after her introductory experience.
Furthermore, we believe the proposed Rule’s disclosure requirements and waiting period needlessly creates an “air of suspicion” in the mind of a prospective Independent Beauty Consultant. A prospective Independent Beauty Consultant trusts the Mary Kay experience shared by her family, her friends, and her coworkers. If, in the future, prospective Independent Beauty Consultants are required to be presented with a pre-sale disclosure document and wait a period of time for review, analysis, and examination, it would be natural for her to think “what is wrong here?” despite her general trust in her family and friends’ experience. Such suspicion would be misled in light of our 43 year history with legitimate and ethical business practices coupled with our built-in consumer safeguards, but nonetheless, these concerns would impact Mary Kay’s ability to continue to tell the Mary Kay story. This disclosure requirement would suggest a level of risk that simply does not exist.
Well look at that. It’s a “simple decision” to start a business and invest hundreds or thousands of dollars. Oh I know… They’ll say it’s only a $100 decision because that’s the cost of the starter kit, and anything after that is a separate decision. (Incidentally, the inventory decision is one that involves a whole lot of arm twisting, guilt, and con games.)
And how dare we stifle some enthusiasm or create an air of suspicion! Mary Kay and others worried that giving people 7 days before they could sign their MLM contracts might make them rethink signing up. No kidding! If people have (true) disclosures about income and they have time to research before they sign up, there are at least some people who will change their minds.
It doesn’t really delay the ability to hit the ground running. If someone wants to sign up for MK, she can go ahead and get the process started, and during her waiting period she could start lining up parties. What a great use of time! It takes some time to set up appointments anyway.
So this air of suspicion… Yes, indeed. There SHOULD be an air of suspicion surrounding MLMs. More than 99% of people lose money in MLM. The fact that Mary Kay Inc. has been skilled at selling their con for decades doesn’t change that fact. It would be natural for her to think what is wrong here??? Yes! Exactly! People should be given time to research this “opportunity.” What is Mary Kay so afraid of? If the company is as wonderful as they say, a week shouldn’t have much impact on recruiting efforts.
Oh, wait. There is a problem with the company and its bogus business opportunity. And the time would give people a chance to research. And they would be more likely to research because they would wonder what might be wrong. And they’d find websites like Pink Truth. And they’d start to see facts about MK that bother them. And they’d see all the tired lines and scripts that were used on them, and realize they’re used on everyone to manipulate them into signing up.
And the concerns of potential recruits “would impact Mary Kay’s ability to continue to tell the Mary Kay story.” Really? You can’t tell your story if people are concerned? No. What you really mean is that it would impact MK’s ability to sell their nonsense to unsuspecting recruits.
The risk that simply does not exist… An outright lie. There is tremendous risk, and women who sign up as Mary Kay consultants are almost assured of not recouping their initial investment. And Mary Kay Inc. knows this.
I know it has nothing to do with the post, but I would like to say that this photo by MK (the woman) gives me the creeps.
In every photo I’ve seen of her, it’s like there’s nothing in there. No sparkle of humanity in her eyes. It’s…off-putting, for sure.
Her eyebrows always creeped me out. Do a search for her photos and tell me what you think.
The photos of MK with wig certainly are weird. For a while now MK stuck in the 1960’s has been more of a caricature. What’s even more disturbing is the condescending nature of her philosophy and books. If you look at the NSD’s they copied an elitist self entitled air of superiority. My SD had it. My NSD had it and our local princess Diva NSD had it. The pretend that being successful requires honest hard work certainly abounds. The blame game also covers up a multitude of sins. Factory workers were exploited in 1911. Child labor laws came into being in 1929. Unions helped make changes for workers too. It seems though that monopolies are in an unchecked abundance, mlm’s proliferate, some cults continue at the expense of even children, workers in Seniors homes are often underpaid, farm laborers and ware house workers are still exploited and mlm are mostly unregulated. MK managed to arrogantly thwart better regulations. It wasn’t because her company was exemplary. It was because MK was flawed from day one and knew from her long history in sales how to skirt the flimsy laws. Along the way she had to change the rules and standards to claw back maximum profit for herself. She packaged it rather nicely (Calling us her daughters, talking about go give spirit, giving false hope (products fly off shelves), instilling false praise for herself and NSD’s, that MK positivity song and supposedly empowering women. When NSD’s are encouraged to fake it and even their I stories, MK herself becomes suspect. The nonsensical made up titles: Senior Executive NSD, Future executive NSD, Diamond area etc. just scream of bogus cult.
Do any photos of MK without a wig even exist?
It’s the same if any of Dolly without a wig exist! But, who doesn’t love Dolly, she’s the exact opposite of what Mary Kay stood for.
Dolly is awesome. The fact that her production company produced “Buffy” still blows my mind.
We have seen the FTC come down hard on some MLMs over the years – Herbalife and Advocare come to mind. Warnings have been issued this year thanks to COVID, so I’m wondering when or if we will the FTC will take a stronger look at MLMs and their claims of employment, success, and whatnot.
Re: Mary Kay and her photos – I actually saw her at Seminar a couple of times. Honestly, she always looked fluffed and coifed like a doll — without substance. The smile was plastered on for hours on end. And that bouffant wig! (Like I’m one to talk – I had the spiral permed, can of Aquanet a week hair in the 80s.)
But at least it was your own actual hair! That 80s style didn’t spray and tease itself, it took work!