Many of you read or heard the news story relating to a class action lawsuit settlement in which the cosmetics industry agreed to provide $175 million worth of free products to consumers whether or not they purchased from any of the brands cited in the lawsuit. I found out about the pending lawsuit in 2004, when the legal firm filing the class action against several major department store chains and several of the cosmetic companies sold there called me for my opinion on the topic. By the way, I declined to comment, and I’ll explain why in a moment.

The issue was price-fixing of cosmetics, including fragrances. As all of us know from simply shopping at most any department store from Macy’s to Nordstom or Neiman Marcus, cosmetics never go on sale. Department stores always run sales and clearances in all areas of the store….except cosmetics. What the suit alleged, and what seems blatantly clear, is that cosmetic companies don’t allow department stores to sell their products below the suggested retail price. Why? No doubt because doing so lowers the prestige such companies as Dior, Chanel, Clarins, Estee Lauder, and Lancome strive to maintain.

Somehow a Lancome or Clinique antiwrinkle cream isn’t as special or elite if it’s 20% off the retail price. Cosmetic companies want women to believe that the expensive products they proffer are worth every penny and of course that means it can never go on sale. How do you reduce the price of a miracle cream or lotion? What those companies want you to believe is that you can’t look younger or more beautiful or like your favorite celebrity on a budget.

All major U.S. department stores are part of this settlement; beginning on January 20th and running for the next week, you can stop by Nordstrom, Macy’s, Saks, Bloomingdale’s, and many others to obtain one free product, no proof of purchase required. The catch? Only a select group of products are part of this settlement, and they were chosen by the cosmetics companies affected by the lawsuit.

Further, not all stores will have free items available from each brand. Nordstrom may offer freebies from Clinique and Estee Lauder, while Dillard’s will have freebies from Guerlain and Chanel. No rain checks will be issued, so it’s first come, first served—and you can expect to wait in line for this perk, possibly as long as an hour.

The list of eligible free items is available at www.cosmeticssettlement.com. Personally, I was disappointed to see most of the products contain fragrance or are simply fragrant body lotions, throwaways for the cosmetics companies and not their best sellers. The skin-care and makeup products are a mixed bag, with many skin-care items not being full retail size but rather deluxe sample sizes. It’s as if the cosmetic companies disassembled their gift sets and used those products to give away as part of the settlement.

I suppose this is consoling or at least exciting for some consumers but the bigger picture is that this week of free cosmetic loot isn’t going to change anything. The cosmetic companies settled with a cash payment to the attorneys and this giveaway to the consumer. They admitted no wrongdoing. You are not going to see sales for Crème de la Mer anytime this millennium.
Department store cosmetic companies will still be charging too much for their wares, and women will continue buying them under the mistaken notion that expensive means better in the world of cosmetics. All it takes is a new product with a slightly different claim, a few eye-catching fashion magazine ads or mention in an “editorial” and a celebrity endorsement to get many women to the cosmetics counters over and over again.

Of course there are some excellent products sold from department store lines; the reality is that in most cases spending the extra money isn’t going to make you $20, $30, or hundreds of dollars more beautiful. I’m afraid all this settlement will accomplish is dangling a shiny carrot in front of consumers to distract them just long enough so they don’t notice that, come February, it’s back to business as usual and the attorneys got their take because their concern wasn’t the consumer. Cash or charge, ma’am?