The New Herbalife vs. The Old Herbalife

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.

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.