The company says it intends to fight Mary Kay’s lawsuit, stating that it "believes the allegations in this lawsuit are without merit and intends to vigorously contest this matter".
“RetailMeNot, Inc. takes concerns related to third party intellectual property very seriously. RetailMeNot, Inc. continues to believe that it operates in compliance with law and in the best interests of consumers and its retail partners by aggregating information to help shoppers save money using its websites and mobile apps,” the company’s official statement read.
RetailMeNot is king of online discounting
RetailMeNot was bought by WhaleSaleShark Media in 2010 and has grown rapidly, claiming 450 million consumer visits in 2014 and a generated $200 million in affiliate revenues, making it the largest provider of its kind in North America.
Bearing in mind its size, the lawsuit could have serious repercussions for its business model if the law courts rule in Mary Kay's favor.
Although the language in its official statement is far from conciliatory, experts believe that it may be in its interest to negotiate a settlement on the matter to avoid damaging the future of the business.
Details of the lawsuit...
The suit was filed at the U.S. District Court in Dallas, home of Mary Kay, and states that RetailMeNot has not been authorized or permitted to list deals, sales or codes that use the company’s name.
In the lawsuit, the business models for each company are clearly explained, followed by Mary Kay’s reason for its objection to RetailMeNot offering coupons in the company’s name.
Mary Kay is not a retailer, suit claims
Mary Kay states in the lawsuit that it is not a retailer and does not sell products direct to the consumer because consumers can only purchase products directly through its Independent Beauty Consultants.
The file then goes on to explain the fact that RetailMeNot has been advertising online coupons and offers for products that Mary Kay sells on its websites, which in fact can only be bought through its consultants, meaning the discounts are not redeemable.
It then goes on to underline the fact that the discounts offered through RetailMeNot are from the merchant, which is not feasible in view of the fact that it sales model relies on Independent Beauty Consultants.
“In essence, RMN is running a fraudulent Mary Kay couponing scheme. Upon information and belief, RMN does this solely to drive consumers to its website so that it may charge higher advertising rates and other fees from its affiliated retailers and merchant partners,” the lawsuit states.