Introduction
Ipsy has a membership service, but it’s not like the one we all know and love. Ipsy is a subscription service for beauty products and cosmetics. You can get it for men, women (who also have to pay), kids and even pets. The main benefit is that you get a massive selection of products from brands ranging from high-end luxury brands to super-budget beauty product brands.
I personally love Ipsy because it’s great for me as someone who spends a lot of time in the beauty aisle: I love discovering new products and getting them at awesome prices. I also think it’s great for people who spend a lot of money on makeup; if you are going to spend $100+ on makeup, you may as well get the best stuff.
Ipsy has some notable perks: You can get almost anything you want with no shipping cost ($25 or less). You can cancel at any time (which is highly convenient!). And lastly, I apologize if this section is too long – these are just some of the benefits that make Ipsy stand out from other subscription services (and from others in beauty).
Background
This is a question about ipsy, an online beauty subscription service where people can receive a subscription to monthly beauty products at a discounted price. A lot of people are asking why they’re cancelling their membership, and some people have been wondering if they could sell their membership to someone else.
But here’s the thing: no matter what you do, you can’t get the money back that you paid for your membership. If you bought your membership on credit, then even if you cancel it now, it’ll cost you $55 to get your money back. And if you paid with a gift card (or any other method), then after cancelling, that gift card will be worth less than $0.
So this is how it works: If I were ipsy and wanted to cancel my membership for some reason I would send them an email telling them that I want to cancel my membership and what I want in exchange for my refund. They would give me an email back telling me how much money I owe them and they would send me my refund. What they don’t do is put any money in escrow or transfer any funds into escrow; they have no control over the funds being sent out of the ipsy system (directly or indirectly).
So if someone sends me an email saying “hey! You cancelled your ipsy membership! Here’s your refund check!” then that sounds fine but it doesn’t mean anything because since I never received anything in the first place and never sent anything back either, it doesn’t matter how much that person owes me so long as i don’t owe them anything in the first place . . . That kind of seems like an awful lot of work just so I can get a few bucks back from someone who doesn’t owe me anything at all.
And if anyone wants to buy ipsy for themselves or anyone else (and think about just how much stuff there is on ipsy right now), well thanks but no thanks; i don’t want one either — so why would i pay more than $60-70 a year? So yeah, let them go ahead and put their money in escrow until they figure out that i don’t owe them any money anyway.
And speaking of which: If someone really really really really wants to buy ipsy (and apparently we have lots of places where people are
Reasons
Two reasons why I think this is a bad idea.
1) People who cancel due to no-shows risk getting a bad reputation and being viewed as unreliable or dishonest.
2) Cancellation rates are not sensitive to the original cancellation reason, since people cancel due to things like “I lost my phone” and “I was in a car accident”. As such, cancelling due to no-shows will result in high cancellation rates.
Let’s look at these two points one by one:
People who cancel due to no-shows risk getting a bad reputation and being viewed as unreliable or dishonest. I can see the logic here: cancelling if you don’t make it seems like you are not paying attention (at least at first). The worst thing that can happen is people do not show up; but that could happen because of bad weather, mechanical issues… etc. The more reasonable scenario is that people show up for free drinks, but never pay for them; or maybe they do pay for drinks when they do show up, but their account simply does not get billed for them. Either way, this makes it difficult for someone looking at cancelled accounts to conclude it looks like you are trustworthy (or at least relatively reliable).
If you don’t mind having your cancellation rate look suspicious, then yes: there is some value in having no-shows cancel on your behalf so that your cancellation rate looks lower than it would otherwise be. It is important though as long as there are other valid cancellations that do not come with the same level of suspicion, that you still want people to feel comfortable cancelling on your behalf (in case they were no-showing after excessive rain). For example: if someone cancels because they were hit by lightning and never shows up again (even though they cancelled), then cancelling on their behalf gives them a lower cancellation rate than if they had cancelled themselves.
But here’s why I think this approach isn’t good: People who cancel due to no-shows risk getting a bad reputation and being viewed as unreliable or dishonest . Obviously this is an unfortunate side effect of the decision making process in these cases – but what if we can avoid it? Let us suppose that we have eliminated any possibility of human error from the equation in these situations (e.g., if all those who cancelled did so under protest from the event organizer). If we increase our attention
Analysis
We have posted a new blog called “Analysis” and this will be where we do our analysis. We have done some pretty big analysis in the past but in this particular post, it is time to look at the IPSY numbers.
The IPSY numbers are a great way to see how big your product has been in terms of sales. There is also a lot of data available on that, as well as some of the lessons learned from analyzing those numbers.
However, remember that IPSY is based on sample size (usually less than 100). So while you are using ipsy as an indicator of your potential success — you are only seeing how many people signed up for the free trial.
As we have said before, our goal and main challenge is to build something people want to use, not just sign up for a free trial and then cancel when they don’t like it. It’s about building something people want rather than building something that nobody wants.
With that said — my analysis will be focused on how many people signed up for product-market fit trials and how many people bought into our value proposition (specifically what percentage bought into our value proposition).
We will be looking at:
• How many people signed up for the free trial?
• How many people bought into the value proposition?
• How much money did we make?
• Which people did we convert? And why did they convert?
Conclusion
By now you no doubt have an idea of what ipsy is and why you should join. But before you commit, here’s a quick summary of the steps ipsy has taken to make joining easy, secure and fun.
The process of signing up is as follows: 1. Click on the “Join Now” button at the top right of every product page (or view it by clicking on “Product Page Banner” in your browser). 2. The form will load and populate with your information (email address, etc.). 3. You will be asked to confirm that you are over 18, your email address is confirmed, we confirm that you are a human person and so forth.
4. We will verify your email address against our system via a text message as soon as possible after you sign up for the first time (but not more than 24 hours later). 5. You will be given access to an ipsy credit card account where you can use an internal payment system for purchases made with ipsy credits or balance transfers from your credit card. 6. Your account is not affiliated with any other credit cards or banking systems; however, there is no need for you to set up any further payment methods if you do not wish to do so at this time (only certain products require additional payments).
7. Your access to the iPerk system is limited by both time and number of products purchased each month; therefore, it’s important that once a month’s subscription period has expired a new account be created as soon as possible to avoid cancellation without notice during these first few months’ use of the IPSY system.
8. Once your four-month subscription period has ended (or shorter if cancelled), we will automatically cancel your account if it hasn’t been renewed within four months of its initial date — this won’t happen if you were in our shopping cart when we did our verification text message but have since cancelled the order or paid via checking or online banking and initiated a new order through our online store instead (this happens behind the scenes after the order has been processed through our online store and verified).
9. Once all payments have been completed, any remaining balance on your account must be transferred into another virtual currency such as bitcoin or cash through an easy-to-use web application such as PayPal or Venmo before being debited from your account again via iPerk’s internal payment system once every four months (or sooner if