PREVIEW: The RealReal BadBad: Fashion's next big scandal? 👀🍿🧃

An open lawsuit alleges fraud while customer complaints flood social media

Like all good gumshoeing adventures, I was tipped off about some chaos with The RealReal when seeing a friend’s Instagram stories.

I took to reaching out to some folks also complaining on Twitter but there wasn’t much to find and The RealReal eventually found my friend’s items.

About a month later, I got a tweet from a French woman living in New York City, Aly Sene-Dorsi, who is suing The RealReal for over $5M dollars for allegedly selling what she considers ~$232k worth of clothing, handbags, accessories, and shoes without her knowledge or consent.

Now after Aly’s three-year-long claims that The RealReal forged a consignment agreement to defend selling her belongings, the Manhattan DA’s office is open to starting an investigation; if Aly is able to provide them with a list of other affected consumers.

I connected with Aly after she’d seen I’d been responding to folks sharing their The RealReal complaints on Twitter— I’d done some internet gumshoeing after a friend messaged me in December asking if I’d seen a rising trend in The RealReal horror stories.

Aly tweeted me asking if I’d want to learn about her legal battle with The RealReal. Of course, I did, as the case has already cost Aly over $52,000 and counting. Her case can be found in the New York State Supreme Court E-Filing system: Index Number 100336/2020 in front of The Honorable Judge Louis N. Nock. It was filed on March 2nd, 2020. 

I spoke quickly with Aly and then delved into the lawsuit documents while simultaneously connecting with a breadth of The RealReal consignors and buyers. Through these conversations, it became apparent that many have encountered problems with the service and found its customer service and problem resolution lacking. I’ve been careful to objectively report on a smattering of stories below, providing screenshots whenever possible.

I also reached out to The RealReal via email asking if I could speak to someone for this story but the team replied saying, “We're unable to offer you a comment or an interview at this time.”

Ultimately I wanted to let the stories speak for themselves and only editorialize when I share my own fact-based conclusions when looking at all of the documents of the lawsuit as a sum of its parts. Okay, there’s also some sass, but sparingly.  

This article is long but I promise it is SO, SO, SO WORTH THE READ. It has (alleged) fraud, (alleged) lying, (alleged) stealing, and more!

I’d like to think I even have a Legally Blonde moment when sharing my personal analysis of the case’s evidence.

Without further ado, The RealReal has done some customers dirty… and these are their stories *Law & Order sound*.

Aly’s story begins on September 13, 2018, when she had a Luxury Manager from The RealReal visit her home to pick up dozens of items to assess and price out for a potential consignment. Upon connecting with her assigned Luxury Manager, Aly made it very clear that she was merely seeking pricing before deciding whether or not she would consign with The RealReal.

Like with the one below, all of the screenshots are from documents from the publically available court documents through the New York State Supreme Court E-Filing system, all of which are public records. I’ve highlighted in pink, sections of the screenshots I believe are important.

Between the September 13th visit and October 15th, Aly and her Luxury Manager sporadically communicated about pricing. Upon receiving and reviewing the Luxury Manager Pricing List on October 15th, Aly decided that she would not consign with The RealReal as she felt her pieces had been undervalued.  

Aly texted and emailed her Luxury Manager on October 15th saying, “I just looked at the prices. They are below what I was expecting. I have sold several items on eBay for much more money. There was definitely some time involved in dealing with the buyers but since i am not in dire need to make more [money] off the items I’ll use the services of a freelance seller to deal with them for me. I apologize for taking up some of your time.”

To which the Luxury Manager is shown to have emailed back on the same day, “Noted. Thank you for letting me know” and arranged for the return of Aly’s belongings. 

Per the lawsuit documents, almost exactly a year later, in October of 2019, Aly was complimented on her coat by a woman who said she worked at The RealReal. When Aly mentioned not consigning with the platform in the past due to the low item pricing, the woman allegedly said, "Check us out again because a lot has changed / improved in the past year."

On October 9, 2019 a Senior Group Manager contacted Aly about scheduling an in-home pickup of her belongings to assess their potential resale value. On November 11, Aly responded stating she was again, merely seeking a price assessment before moving ahead with any consignment agreement. On November 15, another Luxury Manager from The RealReal met Aly and picked up 131 items. Four days later, an additional 7 items from Aly’s doorman. Aly claims to have never been presented with a Consignment Agreement from The RealReal. 

Aly estimates that the value of the pieces picked up totaled ~$232,000. According to the lawsuit, 138 items included pieces from Bottega Venetta, Hermès, Christian Dior, Givenchy, Gucci, Fendi, Chloé, Balenciaga, Alexander Wang, Chanel, Yves Saint Laurent, and Saint Laurent. 

Throughout correspondence in October 2019 through January 2020, Aly repeatedly stated (via text, email, and verbally) she was simply seeking pricing again. Below are a sampling, more can be found throughout this piece and via the court exhibits in our appendix below.

Quick very, very important thing to remember: As we’ll discuss in greater detail later, The RealReal’s Consignment/Sales Agreement Contract states that once the items are received at the warehouse and approved by the platform, they are immediately uploaded and listed for sale. 

When reading through the email threads as a third party, it was evident that three things are true: 1) The RealReal was proceeding with what appears to be their standard practice of uploading items for sale upon receipt. 2) Aly had stated in writing that she was only looking for an initial price assessment, so her understanding is that The RealReal team is getting her those prices to review. 3) When Aly had approached The RealReal a year earlier in 2018 for a price assessment, she was indeed given a preliminary price list for her items on which she ultimately decided not to consign with The RealReal.

In understanding those three facts, suddenly the email threads can be read through both perspectives and see the two varying expectations for a final outcome. Intentional or not, The RealReal’s communication feels to me like they’re aware of this misunderstanding– and while reminding Aly of the pricing being uploaded to the dashboard, they *never* outright say: the pricing being live on the dashboard is a result of your items being listed for sale. 

Let’s take a look at an example, this is an email from Aly’s Luxury Manager on December 4th:

Again, the email can be read in two, very true ways ie: “start the consignment process” can mean both “get you an initial price list before listing” AND “process your items for sale.” Starting to see some  🚩 🚩s? Also, “… we aren’t unable to provide final pricing until…” Freudian slip? Couldn’t decide between “we aren’t” and “we’re unable”? Who knows!

So in my opinion (hi lawyers):

At best, this makes The RealReal look incompetent– the Luxury Manager has forgetten Aly’s written request for an initial price assessment. 

At worst, this makes The RealReal look calculating and dishonest– ignoring Aly’s written request and proceeding with the sales process while being deliberately vague in their communications. This allows them to argue that they’ve been telling Aly they’re going ahead with the sale the whole time.

Curious as to which one it was. 

This piece was too long for email but please continue reading here!