LuLaRoe Retailers Claim They Have Not Received Promised Refunds

CEDAR KNOLLS, N.J. (CBSNewYork) – Women who went from customers to retailers for the popular clothing company LuLaRoe say the company is leaving them out in the cold.

As CBS2 first reported in May, they say they're getting stuck with damaged or defective merchandise. The company says they will be reimbursed, but sellers are still skeptical.

When CBS2 spoke with Deborah Israeli in May, she was finding great success selling clothing by LuLaRoe.

The California-based multi-level marketing clothing company was made popular by its unique printed leggings.

But just two months later, she is sending back $32,000 worth of unsold merchandise and is concerned she won't receive the refund LuLaRoe promised her and many other retailers, CBS2's Hazel Sanchez reported.

"I know people that haven't, but I'm trying to be optimistic about it," she said.

Israeli said remaining optimistic isn't easy when former and current LuLaRoe retailers and customers are flooding social media with complaints saying they've been waiting weeks or months for refunds for returned or damaged clothes.

LuLaRoe's "Make Good Program" promised full refunds for returned products purchased between January 1, 2016 and April 24, 2017.

One woman tweeted, "@LuLaRoe we want our refunds. Because of LuLaRoe I am owed thousands." Another warned, "@LuLaRoe I hope you are ready for a big lawsuit. Withholding approved refunds is illegal."

LuLaRoe would not address CBS2's questions on camera. It sent an email, saying reimbursement checks should be delivered within approximately 30 days and gave no explanation for why refunds were delayed.

"I've had it," said one New Jersey woman, who resigned from selling LuLaRoe.

She's hopeful the clothing company will be better about refunding nearly $4,000 worth of unsold clothing she's returning. She's still waiting on a $7000 refund for damaged products promised in an email to her last month.

"Checks are going to be mailed out no later than Wednesday July 5," she said, reading the email. "I'm hoping that by us speaking out about this issue, it will help them expedite the process and do it with integrity."

Israeli said if you don't like the way things are done, find a way to do it yourself. She's doing just that by starting her own line.