Hermès Faces Class Action Suit Over Birkin Sales Practices

[benjinito]

So...

• should airlines be sued because of their frequent flyer mileage programs? i.e. if you acquire this many miles then you can get these rewards.
• should Starbucks be sued because of their drink rewards program? i.e. you have to purchase this many drinks to get this.
• should I sue Walgreens because in order to get more rewards points, I must make more purchases?
• should I sue the entire hotel industry because of their rewards points system?

I believe this lawsuit against Hermes for "tying" is ridiculous.

IMO, rewards programs are different because non-participants are not excluded from making a purchase. E.g. a returning guest can redeem their points for a hotel room, but anybody can book the exact same room with a credit card.
Quite a different story at H

 

[CTLover]

What a loaded phrase. How do you define this?

You can't. I think being the type of customer SAs and store managers feel are worthy of a B/K/C offer depends on the store, SA and SM.

 

[CTLover]

So...

• should airlines be sued because of their frequent flyer mileage programs? i.e. if you acquire this many miles then you can get these rewards.
• should Starbucks be sued because of their drink rewards program? i.e. you have to purchase this many drinks to get this.
• should I sue Walgreens because in order to get more rewards points, I must make more purchases?
• should I sue the entire hotel industry because of their rewards points system?

I believe this lawsuit against Hermes for "tying" is ridiculous.

Furthermore, Hermes isn't pumping out their "Berkins", Kelly bags, and Constance bags on an assembly line. Everyone knows that each bag is made by hand by a single craftsman and so demand far far outweighs the supply available. Hermes are desired specifically because of their quality, craftsmanship, attention to detail, attention to stitching, attention to the leather quality etc.. It's their business model and has always has been their business model.

Should Hermes now be penalized for their attention to quality and craftsmanship? Should Hermes be ordered to make more bags and make them faster? Of course not - it's ridiculous.

How can Hermes be ordered to sell a bag to every client that walks in a Hermes boutique that requests one and taking it a step further....have said bag available in each and every clients desired spec? Hermes would have to train and hire tens of thousands of artisans to make bags in every conceivable combination and then stock a mountain of bags at each store just so that every client gets what they want. Or, Hermes would have to setup assembly lines to pump out bag production which would then go against the grain of their Business model of the quality and craftsmanship that we all expect and desire.

And doing something like that would kill the secondary market, making the bags overall less valuable.

 

[MonsoonBirkin]

You can't. I think being the type of customer SAs and store managers feel are worthy of a B/K/C offer depends on the store, SA and SM.

Thanks for highlighting the problem, then.

 

[Jktgal]

I've been wondering what better model Hermes could use to revamp its bag allocation methods without leaving people feeling manipulated, but still keep exclusivity.

Auction.

 

[smallbeast217]

What a loaded phrase. How do you define this?

Well in the art world it’s by having a great collection and not flipping works at auction. Supporting the artists long term. Supporting the gallery. So I imagine that Hermes is similar- don’t just buy Birkins and then sell them online. Prove that you are a long term customer. Basically every single thing that about 1000 threads and posts on this forum have elaborated. It’s a loaded phrase because there is no “proof” that you are “worthy”. It is entirely unscientific. Which is one of the many reasons this suit is pointless and silly and will not get anywhere or change anything. Nobody deserves a handbag or a painting. It’s a luxury good, not a human right.

 

[Ladybaga]

So...

• should airlines be sued because of their frequent flyer mileage programs? i.e. if you acquire this many miles then you can get these rewards.
• should Starbucks be sued because of their drink rewards program? i.e. you have to purchase this many drinks to get this.
• should I sue Walgreens because in order to get more rewards points, I must make more purchases?
• should I sue the entire hotel industry because of their rewards points system?

I believe this lawsuit against Hermes for "tying" is ridiculous.

Furthermore, Hermes isn't pumping out their "Berkins", Kelly bags, and Constance bags on an assembly line. Everyone knows that each bag is made by hand by a single craftsman and so demand far far outweighs the supply available. Hermes are desired specifically because of their quality, craftsmanship, attention to detail, attention to stitching, attention to the leather quality etc.. It's their business model and has always has been their business model.

Should Hermes now be penalized for their attention to quality and craftsmanship? Should Hermes be ordered to make more bags and make them faster? Of course not - it's ridiculous.

How can Hermes be ordered to sell a bag to every client that walks in a Hermes boutique that requests one and taking it a step further....have said bag available in each and every clients desired spec? Hermes would have to train and hire tens of thousands of artisans to make bags in every conceivable combination and then stock a mountain of bags at each store just so that every client gets what they want. Or, Hermes would have to setup assembly lines to pump out bag production which would then go against the grain of their Business model of the quality and craftsmanship that we all expect and desire.

BEST POST YET! I agree 100 %

 

[MonsoonBirkin]

BEST POST YET! I agree 100 %

I'm glad to know you'd 100% agree with Hermes switching to a points-based system like all of the ones mentioned in the post you referred to, in which 1) consumers clearly know the terms and conditions before engaging, 2) the items are available for purchase even outside of accumulating enough award points. I'd prefer this model, too!

 

[Ladybaga]

I'm glad to know you'd 100% agree with Hermes switching to a points-based system like all of the ones mentioned in the post you referred to, in which 1) consumers clearly know the terms and conditions before engaging, 2) the items are available for purchase even outside of accumulating enough award points. I'd prefer this model, too!

My whole issue is that I am offended when people call Hermes scarves, shawls, bracelets, etc..."bait" and "crap."
I wear the "bait" and "crap" because I LOVE THESE ITEMS, not because I have to buy them in order to buy a bag. It makes me upset to know that people are buying coveted scarves, shawls, bracelets, etc just to "score" a B/K/C. We "scarf people" find it hard to find these hard to come by items because of those who buy only for the sole purpose of hoping to get a bag. In my own personal experience, I have never had to buy other items to get a bag. During my first year of buying scarves and bracelets, my SA told me that they sell more than scarves and bracelets, "how about a bag?" I didn't start a "journey" to score anything; it just naturally happened.
It would be interesting to know if the two that brought the lawsuit wore their scarves, shawls, and bracelets to court or if they already sold these on ebay. Sorry to be so negative, but seriously!
Sorry, but I don't want Hermes to churn out B/K/C on an assembly line controlled by robots. The quality would go down!

 

[ladysarah]

My whole issue is that I am offended when people call Hermes scarves, shawls, bracelets, etc..."bait" and "crap."
I wear the "bait" and "crap" because I LOVE THESE ITEMS, not because I have to buy them in order to buy a bag. It makes me upset to know that people are buying coveted scarves, shawls, bracelets, etc just to "score" a B/K/C. We "scarf people" find it hard to find these hard to come by items because of those who buy only for the sole purpose of hoping to get a bag. In my own personal experience, I have never had to buy other items to get a bag. During my first year of buying scarves and bracelets, my SA told me that they sell more than scarves and bracelets, "how about a bag?" I didn't start a "journey" to score anything; it just naturally happened.
It would be interesting to know if the two that brought the lawsuit wore their scarves, shawls, and bracelets to court or if they already sold these on ebay. Sorry to be so negative, but seriously!
Sorry, but I don't want Hermes to churn out B/K/C on an assembly line controlled by robots. The quality would go down!

This! I am not exactly offended but I do find it a bit crass. Also if people ‘only’ like birkins they are kind of missing the whole Hermes point.

 

[FrenchNewbie]

TAN article is on the money. I was waiting for someone to pick up on that parallel. Art galleries operate on the same basis because- guess what- art is a handmade object not a something spat out of a factory. Birkins are not art but they are made by hand by artisans, and so limited supply + high demand = waiting list and prove your worth. Shock! Gosh what a silly lawsuit.

Well in the art world it’s by having a great collection and not flipping works at auction. Supporting the artists long term. Supporting the gallery. So I imagine that Hermes is similar- don’t just buy Birkins and then sell them online. Prove that you are a long term customer. Basically every single thing that about 1000 threads and posts on this forum have elaborated. It’s a loaded phrase because there is no “proof” that you are “worthy”. It is entirely unscientific. Which is one of the many reasons this suit is pointless and silly and will not get anywhere or change anything. Nobody deserves a handbag or a painting. It’s a luxury good, not a human right.

Alas, they are not parallel.

Yes, art is handmade; yes, a Birkin is "handmade". The difference is: a Pablo Picasso is not able to be made again by the brand Picasso after he dies; a Da Vinci is not able to be made again by the brand Da Vinci after he dies; so the art is then deemed priceless/precious/one-of-a-kind. But a Birkin is "replicate-able" (in the sense that two Himalayan Birkins will be virtually indistinguishable to the naked eye and they can be made again upon request by Hermes the brand, even after the original artisan(s) dies). A Birkin is not priceless/precious. I am an avid art-collector, so I am very passionate about this topic.

Yes there are galleries that I support long-term, and yes I have a larger collection of some artists than other artists--along with that comes some perks: I've gotten to meet multiple artists personally, I've gotten first-glance access to new pieces, I've had exclusive invitations to parties/auctions, I have preferred pricing, etc. But nothing about my long-term loyalty alludes to the fact that no other person has access to those artworks. If you are a "newbie" and your wallet is big enough and/or the piece is still available, you have the same fair opportunity to purchase that artwork that a VIP like myself has. You are not required to purchase xxx number of sculptures or art books from the gallery in order to purchase the art, LOL. You are not required to purchase xxx serigraphs before you are allowed to purchase an OOC (oil on canvas). You cannot just walk right off the street into Hermes and purchase a Birkin...even if you witness the person right before you, who was on the "pre-spend list", refuse it--it goes in the stockroom and waits for person #2. Sorry, the two subjects of your argument [Birkin vs. artwork] are just not the same.

Yes, I do agree with your last bolded sentence: whether art or Birkin, they are just material things that we do not have to have; you can't take them to your grave. But they are nice to look at while you have breath in your lungs!!

 

[MonsoonBirkin]

My whole issue is that I am offended when people call Hermes scarves, shawls, bracelets, etc..."bait" and "crap."
I wear the "bait" and "crap" because I LOVE THESE ITEMS, not because I have to buy them in order to buy a bag. It makes me upset to know that people are buying coveted scarves, shawls, bracelets, etc just to "score" a B/K/C. We "scarf people" find it hard to find these hard to come by items because of those who buy only for the sole purpose of hoping to get a bag. In my own personal experience, I have never had to buy other items to get a bag. During my first year of buying scarves and bracelets, my SA told me that they sell more than scarves and bracelets, "how about a bag?" I didn't start a "journey" to score anything; it just naturally happened.
It would be interesting to know if the two that brought the lawsuit wore their scarves, shawls, and bracelets to court or if they already sold these on ebay. Sorry to be so negative, but seriously!
Sorry, but I don't want Hermes to churn out B/K/C on an assembly line controlled by robots. The quality would go down!

I see where you're coming from. The good news is, nothing about this lawsuit would force Hermes to factory-produce its Bs and Ks. Even in the unlikely event of a win, the verdict would direct Hermes to change the way it allocates its Bs and Ks. It wouldn't compel the company to produce a bag for anyone who wants one. The silver lining for the scarf fans (and those who love the other items) is that a win would likely cause a decrease in price for all of the items, too, since it's a real possibility that those prices are artificially high due to the existing bag allocation practice.

As to factory producing, didn't Hermes change its production methods on Bs and Ks independent of this lawsuit? I thought I read here (was it from Bababebi?) that instead of a single artisan working on one bag from start to finish, it's now more like the Model T production where one artisan works on one part before passing the bag onto someone else to do the next step. I think a lot of us have lamented this new approach. Personally, the day the company stops making their bags largely by hand is the day I stop buying.

Lastly. I can understand your frustration about those buying "Birkin bait" taking things you would genuinely love to have if they weren't bought up by this demographic. But at the end of the day, isn't Hermes the one choosing not to restock products it knows is selling out? And wouldn't that be the case regardless if the "Birkin bait" people were shopping or not, because of its business tactics re: exclusivity and rarity? Plus, a lot of others seem to value that Hermes produces limited, one-off pieces.

I get that some of the worst aspects of shopping are brought about by those who seemingly only want a bag. But at the same time, Hermes is also the one laughing all the way to the bank, here. I see it as a stroke of genius on their end that they have managed to convince consumers to pay a lot of money for stuff they profess is "crap." The company needs absolutely no defense from anyone who loves the brand for what's really quite the marketing feat on their end!

 

[jellyv]

So...

• should airlines be sued because of their frequent flyer mileage programs? i.e. if you acquire this many miles then you can get these rewards.
• should Starbucks be sued because of their drink rewards program? i.e. you have to purchase this many drinks to get this.
• should I sue Walgreens because in order to get more rewards points, I must make more purchases?
• should I sue the entire hotel industry because of their rewards points system?

I believe this lawsuit against Hermes for "tying" is ridiculous.

Your examples, though, are of typical loyalty programs, in which the company and the consumer both know and agree to rules and restrictions of the rewards system. It can be subject to change over time, but not entirely opaque to the shopper. A different power dynamic in the "relationship," if you will.

As we know, Hermes doesn't have this, so the nature of H consumer empowerment, if it exists at all, is really vague. Is that unlawful, or just unhandy for certain people? A dumb case. Welcome to capitalism.

 

[FrenchNewbie]

Lastly. I can understand your frustration about those buying "Birkin bait" taking things you would genuinely love to have if they weren't bought up by this demographic. But at the end of the day, isn't Hermes the one choosing not to restock products it knows is selling out? And wouldn't that be the case regardless if the "Birkin bait" people were shopping or not, because of its business tactics re: exclusivity and rarity? Plus, a lot of others seem to value that Hermes produces limited, one-off pieces.

I get that some of the worst aspects of shopping are brought about by those who seemingly only want a bag. But at the same time, Hermes is also the one laughing all the way to the bank, here. I see it as a stroke of genius on their end that they have managed to convince consumers to pay a lot of money for stuff they profess is "crap." The company needs absolutely no defense from anyone who loves the brand for what's really quite the marketing feat on their end!

This!
Not sure how blaming the consumer is the solution/right approach.

 

[880]

Well in the art world it’s by having a great collection and not flipping works at auction. Supporting the artists long term. Supporting the gallery. So I imagine that Hermes is similar- don’t just buy Birkins and then sell them online. Prove that you are a long term customer. Basically every single thing that about 1000 threads and posts on this forum have elaborated. It’s a loaded phrase because there is no “proof” that you are “worthy”. It is entirely unscientific. Which is one of the many reasons this suit is pointless and silly and will not get anywhere or change anything. Nobody deserves a handbag or a painting. It’s a luxury good, not a human right.

100% The fact that people cannot walk in off the street and buy the bag of their dreams is not an antitrust violation

The fact that a retailer, a gallery, or other business cherry picks among its clients in this fashion is not illegal

ETA: I say this even when I am not able to get some bags I would like. Arguably, I love other items more than bags, but if I have to wait, or even if I cannot get something at retail, I don’t actually take it personally. if you think boutique merchandise is crap or bait, and if you value your time and want something immediately, buy from a reseller.