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    Home / The Facts / The New Herbalife vs. The Old Herbalife
    • The Deception Continues
    • The Herbalife Pyramid Scheme
    • The Herbalife Compensation Plan
    • About Nutrition Clubs
    • The New Herbalife vs. The Old Herbalife
    • The Perpetrators

    The New Herbalife vs. The Old Herbalife

    Herbalife claims that it has cleaned up its act in the past few years.

    But it’s important to remember that the small changes that Herbalife has made don’t change the fundamental aspects of the business that make Herbalife a pyramid scheme.

    Herbalife has caused distributors to lose billions of dollars.

    SOME OF THE CHANGES INCLUDE:

    1) Herbalife banned lead generation systems. For over a decade, new recruits were encouraged to purchase expensive leads and other ancillary items and services for their business. You can watch some distributors talk about their experiences with these systems, here: https://youtu.be/Hx3zdjgOuCc. Herbalife banned those systems in late 2013, after benefitting from their existence for years, and while this is certainly a positive step, it is irrelevant to whether or not the company is a pyramid scheme.

    2) Since 2012, the Herbalife return policy has undergone a few changes, but it remains a convoluted, daunting process that few distributors use.  HLF announced it would do away with the 10% restocking fee and would no longer deduct duplicative logistics fees and packaging-and-handling fees from the reimbursement. Almost a year later, it started to cover the cost of return shipping.

    Still, in order to return product, a distributor must persevere through a lengthy process:

    1. Complete and submit an Inventory Repurchase Request form (which includes “I have permanently resigned my Herbalife Distributorship”)
    2. Complete and submit an inventory list of all products one would like to have repurchased (no product that is open or greater than 12 months old will be accepted and, of course, distributors are encouraged throughout their first year to open products and give away samples)
    3. Provide proof of original purchase from Herbalife for all product being returned (credit card statements, cancelled checks or money orders, even though HLF must have proof itself that the product was sold)
    4. Provide sales records (receipts) for all products sold from this/these order(s) to retail customers and/or downline
    5. Agree that Herbalife will not pay for or assume responsibility for re-returning items to the distributor that are not repurchased (meaning if a distributor attempts to return product and Herbalife declines to repurchase the product, the distributor will not even get the rejected product back)
    6. Await pre-clearance from Herbalife to determine which items Herbalife is willing to accept
    7. Box up those products approved tentatively for return to Herbalife
    8. Ship the box to Herbalife or arrange for pick-up
    9. Await Herbalife’s decision whether products tentatively approved for return are, in fact, accepted by Herbalife
    10. Await return of payment

    Importantly, these changes have nothing to do with whether Herbalife is a pyramid scheme, and have barely made the return policy itself less onerous.

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    3) The company expanded the qualification methods to move up or maintain status in the marketing plan. The idea was to make obtaining supervisor status more achievable for lower income individuals and “level the playing field.” In actuality, this change keeps people on the hook longer, increasing the chance of making them “accidental” supervisors. More people reaching supervisor is a statistic Herbalife can use to lend credibility to its business model. Unfortunately, this change is also irrelevant, as many distributors are still encouraged to make bulk purchases, and nothing about the payouts at the top of the plan changes at all.

    Herbalife doesn’t disclose the average costs associated with starting an Herbalife business. For Nutrition Club owners in particular, this can mean thousands of dollars of unforeseen costs.

    Disclaimer

    The website factsaboutherbalife.com (the “Website”) is maintained by Pershing Square Capital Management, L.P. ("Pershing Square").

    Pershing Square currently maintains an investment position in the common stock of Herbalife Ltd. (“Herbalife”) that will profit if the price of Herbalife common stock declines. Pershing Square may change its views about or its investment positions in Herbalife at any time, for any reason or no reason, and at any time may change the form or substance of any of its Herbalife investment position.

    The information and opinions contained in the Website are based on publicly available information about Herbalife and other companies. Although Pershing Square believes the statements it makes in the Website are substantially accurate in all material respects, Herbalife and others may dispute the accuracy of such statements. Pershing Square makes no representation or warranty as to the accuracy or completeness of these statements, and expressly disclaims any liability relating to these statements.

    The statements Pershing Square makes on the Website are not investment advice or a recommendation or solicitation to buy or sell any securities. Herbalife shareholders and other investors should conduct their own independent investigation of Herbalife and any other companies to which these statements or communications may be relevant.

    I confirm that I have read the terms of this website.

    The Facts

    • The Deception Continues
    • The Herbalife Pyramid Scheme
    • The Herbalife Compensation Plan
    • About Nutrition Clubs
    • The New Herbalife vs. The Old Herbalife
    • The Perpetrators

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