Smartwool adds forced arbitration to EULA: Difference between revisions

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[[File:Smartwool Email.png|thumb|Smartwool email advising consumers of changes to arbitration agreement and process for sending USPS Priority Mail or hand delivery within 30 days.]]

On March 29, 2024, '''[[Smartwool]]''' emailed customers in their database, automatically opting them in to their new terms of use. These new terms of use contained a forced arbitration clause and were unreasonably difficult to opt-out of.

Smartwool is an American clothing company specializing in the sale of wool clothing. The incident described in this article is a example of[[Post-purchase EULA modification| post-purchase EULA (End User License Agreement) modification]] (colloquially referred to as "EULA roofieing") that includes a revised [[Forced arbitration|forced arbitration clause]]. To illustrate the magnitude of risk posed by a clothing-related EULA, one can imagine a less responsible company accidentally including toxic dyes or coatings due to supply chain mishaps. In such a case they might avoid paying damages to the harmed consumers.   

This instance of post-purchase EULA modification is an example of the strategic use of asymmetry. The business delivered their opt-in notice in an inexpensive, unexpected, and casual nature. The consumer has to do absolutely nothing to opt-in, and in fact can be opted-in without having read the email at all. Opting out is difficult, tedious, and relatively expensive.   

On March 29, 2024 Smartwool emailed a list of their account holders stating that they were opting them into [[Forced arbitration|forced arbitration]]<ref>

{{cite web  

|first=Louis

|date=2 April 2024

|title=Forced Arbitration On SOCKS! Purposely Difficult Opt Out Scam Explained

|url=https://www.youtube.com/watch?v=670rwHz1WV8

|website=Youtube

|url-status=live

|access-date=19 Feb 2025

}}</ref>, and to opt out, they were required to send a letter through USPS Priority Mail. So, in addition to being a post-purchase action, the customers were opted in via email and could not simply reply to the email to opt out.<ref>

}}</ref>  

 

This requirement is in itself more involved than the process of opting in. Additionally, USPS Priority is not the First Class mail that people typically use for mailing letters. This (seemingly minor) difference in mail type is the difference between a $0.56 postcard and a $10.10 Flat Rate Envelope at the time of writing<ref>

{{cite web  

|author=<!-- not cited-->

|title=Mail & Shipping Services

|url=https://www.usps.com/ship/mail-shipping-services.htm

|website=USPS.com

|url-status=live

|access-date=19 Feb 2025

}}</ref>, which preys on an individual's reasoning that the effort involved in attempting to opt-out is not worth the time or money.  

According to the EULA available before the opt-in wave of emails, the original EULA<ref>

}}</ref> available on Smartwool's website stated:

#A higher priority on contacting Customer Service first, but does not explicitly make it a prerequisite before arbitration.

#A specific line reading: "Any dispute or claim relating in any way to the Website and our services, any representations made by us, and/or your use of our websites [...] will be resolved by binding arbitration, rather than in court..." This line does not specify products sold by the company, which would be the most likely cause of a class-action lawsuit.

The new EULA terms lock down on the existing terms, and state:

#An informal dispute resolution process where the complaining party must send a written notice describing the dispute and allow 30 days for resolution before arbitration can begin.[[File:Screenshot from "Forced Arbitration On SOCKS! Purposely Difficult Opt Out Scam Explained".png|thumb|400px|Text from the EULA as it appeared.]]<blockquote>Your opt-out notice must be sent to General Counsel at the address below via USPS Priority Mail or hand delivery within 30 days of receiving this notice, and shall include your name, address, and the same email address you used to create an account with us and an unequivocal statement that you wish to opt out of the updated Terms of Use. Opt-out notices sent via email will not be effective.</blockquote>

[[Category:Forced Arbitration]]