When I rented a Rent the Runway dress two months ago, along with a second dress they offered at a discount for first-time customers, I thought I had hit the fashion jackpot.
The two designer dresses cost me $99 total, despite each retailing for well over $250 each, as is the promise with the retail company. But in reality, Rent the Runway (almost) hit the jackpot with me.
The company’s concept is simple: It amasses designer dresses, then allows women to rent those dresses for a fraction of the original retail cost.
All renters must do is drop off or ship the dress back by the designated date, in the pre-labeled bag the items arrive in. Their tagline: “Because we believe the key to looking great is feeling great.”
If a dress goes missing for any reason, by your own fault or the fault of UPS, the company’s sole carrier, the renter becomes liable for the dress, and in addition to a $50-a-day late fee, Rent the Runway can, and does, charge “up to 200%” of the full retail cost of the dress—each dress—rented.
Of course, the last part is in the fine print, which I didn’t read until I found myself at the 200 percent whim when my dress bag went missing.
I misread the label that appeared only in the reminder-to-return confirmation email instructing me to mail via UPS, not USPS or FedEx, along with warning of the $50-per-day late fee.
The message appeared in the email reminding me of my return date and time. It did not include anything about the 200 percent policy, which was actually tucked away in the FAQ and Terms and Conditions section on the website.
In a rush to work, I mistakenly dropped off the package on time at a USPS drop bin. But I was one letter off. A few days later, Rent the Runway sent me an email claiming my package never arrived and that the company charged a $50 late fee to my account and would do so every day the package didn’t show up at its Secaucus, New Jersey, warehouse.
I took responsibility and called the company, the post office, and UPS (in case the post office handed it off to them) to see what I could do to retrieve the package and made sure the dresses made it back.
But there was nothing I could do. USPS shipped the package back to me, but didn’t track it, so my package was in the package abyss, wherever that is, all while my finances hung in the balance. (I accept this was my mistake; what I am questioning are the punitive measures Rent the Runway institute.)
Every day, I’d speak with a customer service representative over the phone, hoping and praying my package would arrive. After a week, they gave me good news and bad news: They would freeze my account so I would not be charged $50 per day. Cool. The bad news: They told me about the 200 percent policy that former Rent the Runway renters have called “predatory.”
Despite company policy that uses the language that it can charge “up to an amount not to exceed 200%,” the representative on the phone explained to me I would, in fact, owe a hard $1,700 should the dresses not return after 20 days, in addition to the $50 late fee I already paid.
But don’t worry, the rep assured me. They had payment plans available. A sleepy mistake I made at 8:30 a.m. on a Thursday was about to cost me over $2,000.
At first I blamed myself, even though the 200 percent policy was nothing like I’d seen before. But a few quick Google searches unveiled more than 50 reviews, postings, and oftentimes, downright pleas and calls for legal advice for Rent the Runway to return money taken from renters’ accounts as late fees. Many made the same mistake I did—but others did not.
Mary Taylor Renfro, a teacher from Charlotte, North Carolina, rented a $35 dress to wear this past New Year’s Eve. She claims to have returned the dress to a UPS dropbox in Charlotte on Jan. 3 (and showed Rent the Runway emails detailing the address of the dropbox to The Daily Beast), a day before the dress had to be mailed back.
A few days later, she noticed Rent the Runway charges piling up on her credit card, specifically, at least three charges for $53.52, two charges for over $200 and $400, respectively and one last charge—$1,072.36.
“The fees they charged me beyond exorbitant,” Renfro said in an email to The Daily Beast. “And when I addressed the issue with customer service representatives, I kept being rebuffed and dismissed with lines like, ‘These our terms and you accepted them, sorry.’”
According to Renfro’s mother who helped with her case, a rep for Rent the Runway said Renfro dropped the package off at a FedEx, not UPS like Renfro claims. Rent the Runway confirmed this to The Daily Beast and that they actually charged her $1,125.98 (despite Renfro’s credit card statement showing otherwise).
But Renfro stands by her claim that she dropped her package off at UPS. She claims that when she gave Rent the Runway the exact location of the UPS dropbox that she put the package into, they never responded.
“I did have to cancel my card to avoid subsequent charges,” she said.
Lindsay Nourse, a new mom who now lives in Olympia, Washington, also claims she dropped off her package as instructed. But UPS allegedly never scanned it in.
“[Rent the Runway] basically told me they would charge me a late fee every day and two times retail of the dress which would have been $1,000,” she told me over the phone, with her baby cooing in the background. “What are you paying insurance for?” she added, referring to the $5 insurance fee tacked onto each order per dress. According to Rent the Runway, that fee only covers minor stains and damage.
She claims to have canceled her card as well to prevent future charges, and hadn’t heard from the company after that.
“Maybe it’s because I told them I dropped it off, I have no idea,” she said.
Since its inception in 2009, Rent the Runway—founded by Jennifer Hyman and Jennifer Fleiss—has revolutionized the rental wear-and-return corner of the retail industry.
Their model of bringing designer clothes to everyday women clicked with consumers, and though other brands exist, they have become a name-recognized retailer in the space.
Though Rent the Runway would not confirm to The Daily Beast past or present revenue or user demographics, a Forbes article reported that in 2016 the company catered to 6 million women and expected to “surpass $100 million for the first time.”
In 2016, Hyman and Fleiss launched an “Unlimited” subscription service that allowed women to consistently rent-and-return multiple dresses for $139 month—now $159. A year later, they launched a cheaper subscription tier called “Update” for $89 a month. Hyman said herself: “Women on average are receiving around $40,000 to $50,000 worth of apparel per year for $1,600.”
“Rental is offering that at a much lower price, so either you save that money or you might use it on other things in your life, like paying for school or food or other things that important to you,” Hyman, CEO of Rent the Runway, told Recode’s Kara Swisher in a 2017 podcast.
As a consumer, I was happy to work with a company founded by women for women.
But were they really helping women? After my own shipping mishap with the company, I wondered how many other women trying to buy into the business fell prey to the totally-legal-but-awful return policy.
I also wondered how much of that “late fee” money contributed to their revenue—especially when similar designer rental retailers like Le Tote and Vow To Be Chic only charge for the retail cost of missing or lost items.
Rent the Runway said they couldn’t provide those numbers, claiming the company was private, but Lena Auerbuch Anderson, the company’s director of communications, told The Daily Beast that it charges the 200 percent fee to cover the cost of the dress and to pay back other renters who would’ve received the dress and didn’t.
“If someone loses a piece of clothing, we have to purchase that piece all over again. The reason [the cost of the dress(es)] is doubled is because we have to refund whoever we rent it to next,” she said.
But when asked where the other hundreds of dollars in fees go—specifically, if Rent the Runway only has to cover the $50 that the next renter paid for her item—Anderson did not have an answer.
A 2015 BuzzFeed report that found Rent the Runway often sold dresses similar to ones that buyers could purchase at cheaper prices elsewhere online.
But even without exact numbers, understanding the late fee policy was enough to make renting seem more like a game of Russian roulette rather than a convenient way to wear a one-time designer dress. And an ironic one to play with a customer base whose income isn’t exactly disposable.
Brick-and-mortar stores do exist and accept returns, but anyone living outside of the New York City area must use the shipping service. After sifting through more reviews, it appeared the 200 percent fee didn’t guarantee the next renter received the dress after all.
One woman claimed on the Better Business Bureau site that Rent the Runway did not refund her for a dress that did not show up on the date promised, or at all. The company claims to always offer full refunds to customers when a selected style becomes unavailable, but if the BBB review is true, some customers may fall through the cracks.
“I was NEVER contacted about the unavailable gown or asked if I wanted a replacement,” one customer wrote. “It is now too late for me to cancel my order and I may be out $75 AND I won’t have a gown for our upcoming event.”
Rent the Runway told The Daily Beast: “Given we consider RTR to be a community, we charge late fees so that our members truly understand how important it is to return the item on time and that her actions are impacting not only the RTR business, but more importantly our customer community.”
In response to an emailed a list of questions regarding profit, income of non-subscription renters, and the breakdown of where the 200 percent goes to specifically, Rent the Runway emailed the following statement:
The customer is at the center of everything we do at Rent the Runway. We can control almost everything we do, but we don’t own the last mile yet. In order to get pieces to our customers’ doorsteps, we work with shipping companies like FedEx and UPS. [A Rent the Runway spokesperson later clarified that they only use FedEx for specific outbound orders; UPS is the sole carrier for returns.]
We take delays very seriously and know that when customers rely on RTR, it’s often for a very high-stakes event—whether it’s a wedding or an important business meeting—and we will do whatever we can to always get it right for our customers. We’ve had RTR employees get on a train or drive to hand-deliver a shipment to a customer. That’s how important it is to us to get it right.
When a woman who rents for an event doesn’t return something on time, she directly hurts other women who have already reserved that item for a future event.
Leslie Voorhees Means, founder of wedding dress retailer Anomalie, says she understood what Rent the Runway aims to achieve in its fees and charges, but doesn’t see it working long term for the company.
She explained her business provides a 100 percent refund no matter what for lost dresses, from either end, because as a startup the customer’s satisfaction comes first.
Though I personally managed to avoid the 200 percent fee by a few hours and the grace of my guardian angel—and vowed to always read the terms and conditions—I have sworn off Rent the Runway. The risk is simply too great.
Plus, if I had the money to spend $1700 on dresses, I’d simply buy clothes off of an actual runway, not a rented one.