Luxury Labels Accused of Sharp Practices

Louis Vuitton and Chanel are among luxury labels that have come under fire for dubious exchange policies.

One common practice by luxury labels that may violate consumer laws is to charge customers extra when they exchange a faulty product if the price has gone up since they bought it.

For example, some Louis Vuitton handbags and wallets manufactured in 2018 and 2019 have been the subject of complaints about foul odor. Until a few years ago Louis Vuitton flatly refused to exchange its products, but it grudgingly started doing so after mounting complaints from customers.

But exchanges are given only when a strict review frees the customer of any fault, and the customer then has to pay more if the price has gone up since. 

"I couldn't believe what I heard, but I just paid more money and took a new product because it would have been such a hassle choosing one that matched my original purchase price," one unhappy customer said. 

Chanel also charges customers more to exchange a product if the price has gone up. In one internet community of more than 650,000 luxury product users, a post says, "I asked for my Chanel Mini 2.55 handbag to be checked and it turned out to be faulty. I wanted to exchange it but was told to pay another W900,000 to cover the rise in price" (US$1=W1,275). 

Chanel Korea said this is standard practice. "If the defect issue raised by the customer falls within the range recognized by Chanel, a product will be exchanged at no additional cost," it said. "But if the problem goes beyond the range recognized by Chanel, it will be regarded as an exchange stemming from a customer changing his or her mind and will be made only if the price difference is paid." 

A majority of luxury goods companies including Dior, Cartier and Van Cleef & Arpels have the same policy. A Cartier staffer said, "For jewelry, we charge the difference in price for customers who want to change to another color since the materials are different." 

But experts warn luxury goods makers are walking on thin ice.

One staffer at the Korea Consumer Agency said, "No other businesses demand more money from the consumer to cover price changes, like when they use old gift certificates or already signed up for subscription services, unless there's a separate agreement stipulating it."