Home » Beauty

Sephora Faces Racial Discrimination Lawsuit Over Blocking Asian Customers

A look into the claims and controversy as Sephora confronts allegations of racial profiling and discrimination toward Asian shoppers.

By Medha deb

Created on Sep 30, 2025

A look into the claims and controversy as Sephora confronts allegations of racial profiling and discrimination toward Asian shoppers.

Sephora Accused of Racial Profiling and Discrimination Against Asian Customers

In November 2014, Sephora, the renowned beauty retailer, faced a class action lawsuit alleging that it engaged in racial profiling and discrimination against customers of Asian descent. The controversy erupted during a highly anticipated promotional sale where numerous customers with Asian-sounding names or email domains originating from China and other Asian countries reportedly found their online accounts blocked. This legal action highlights broader concerns about profiling, inclusivity, and bias in the beauty industry.

Background: The Incident During Sephora’s Annual Promotional Event

Sephora’s Beauty Insider program is a popular rewards system allowing customers to accrue points and unlock exclusive benefits. Higher tiers, like VIB Rouge, offer privileged access to limited product launches and exclusive sales events. It was during one such annual sale in November that the issue surfaced, with the website overwhelmed by a sudden influx of shoppers seeking to capitalize on steep discounts, leading to technical glitches and a site crash.

When Sephora restored service, many customers—particularly those with Chinese- or Asian-identifying email addresses, names, or domain extensions—were blocked from accessing their accounts. The company subsequently justified this action as an attempt to curb suspected bulk buying and reselling activities often associated with “gray market” practices. However, affected individuals and civil rights advocates claimed the move was discriminatory and unjustifiably targeted Asian customers regardless of their purchasing history or intentions.

The Lawsuit: Plaintiffs and Their Allegations

Four Chinese-American women—Xiao Xiao, Jiali Chen, Man Xu, and Tiantian Zou—filed the federal class action suit in Manhattan. The plaintiffs were all loyal Sephora shoppers and members of the Beauty Insider program, one of whom had achieved the high-spending VIB Rouge status. Their accounts were allegedly deactivated without explanation, depriving them of the ability to shop the sale and access their rewards.

Plaintiffs contended that Sephora denied them service based on the “ill-founded and discriminatory belief that all Chinese/Asian customers abuse discount sales for bulk reselling.”
Emails with domains such as qq.com, 126.com, 163.com, and other markers associated with Asian descent were reportedly flagged and blocked.
According to the legal complaint, more than 95% of blocked accounts in the incident belonged to individuals within the United States, many of whom were ordinary consumers and not involved in suspected bulk purchases.
The blocked accounts included not just high-tier “VIB Rouge” members but also basic-level Beauty Insiders who did not purchase at a scale associated with reselling.

Plaintiffs and their attorneys argued that Sephora’s use of race, national origin, ethnicity, or perceived descent as a proxy for policing fraudulent activity constituted unlawful profiling and discrimination.

Sephora’s Response and Corporate Defense

Sephora vigorously denied any racial discrimination, issuing a public statement asserting: “This lawsuit significantly distorts the facts in this matter. Among other points, we intend to make very clear that clients from a number of countries around the world have been impacted by a temporary block we needed to place on accounts in order to restore the functionality of our site during a surge of activity by resellers during a promotional event.” The company insisted the block was instituted to control automated bulk purchasing that threatens to disrupt promotions and limit supply for regular customers.

Sephora highlighted that the block was not limited to Asian customers or those with Chinese-oriented email domains, but was part of a broader anti-fraud and anti-bulk-buying strategy used globally.
The company provided a customer service hotline and email address for affected customers to seek assistance in restoring access. However, multiple plaintiffs reported that their attempts at resolution were unsuccessful, and the block remained in place.
Sephora’s parent company, the luxury conglomerate LVMH Moet Hennessy Louis Vuitton Inc., was also named in the suit, reflecting the broader corporate accountability for customer treatment during the incident.

Stereotypes, Profiling, and the “Gray Market” Problem

The lawsuit accused Sephora of relying on harmful stereotypes that disproportionately associate Asian customers with the so-called “gray market”—the unauthorized resale of beauty products, often in high-demand Asian markets outside North America. The beauty industry has long grappled with bulk reselling, leading brands to monitor purchases and impose restrictions on high-volume orders.

Critics contend, however, that Sephora’s method equated ethnic cues—such as names or email domains—with fraudulent behavior, unfairly targeting legitimate customers and reinforcing negative biases. This, they argued, amounts to racial profiling, which not only violates anti-discrimination statutes but also erodes trust with important customer demographics. Asian-American advocacy groups pointed to the dangerous precedent of using ethnic identity as a singular factor for fraud detection, calling for more sophisticated and fair anti-abuse policies.

Customer Reactions and Community Impact

The controversy generated a wave of backlash among Sephora’s Asian-American loyalists and the broader beauty community, many of whom expressed shock and frustration at being locked out during a major sale. Social media saw an outpouring of personal accounts and support for the plaintiffs, with hashtags and posts demanding transparency and restitution.

Longtime customers reported feeling alienated and betrayed by a brand they once trusted, highlighting the emotional damage sustained when institutional decisions perpetuate stereotypes.
Some beauty insiders observed that the incident is part of a wider pattern of microaggressions and underrepresentation of Asians in the fashion and beauty industries.
Advocacy groups urged Sephora to invest in anti-bias training and develop better risk analysis tools that do not rely explicitly or implicitly on race or ethnicity.

Legal Arguments and Potential Outcomes

The class action lawsuit brought several key legal challenges under U.S. federal and state civil rights statutes, including:

Disparate treatment based on race, ethnicity, national origin, or perceived national origin.
Discrimination in access to goods, services, or privileges on offer in a public-facing business.
Claims for damages, injunctive relief (an order for Sephora to stop similar practices), and requirements for better corporate training and oversight.

If the plaintiffs prevailed, the case could establish a landmark precedent for how e-commerce businesses monitor and restrict accounts during periods of high demand—potentially making it much harder to use markers of ethnic identity in fraud prevention systems.

Industry and Media Response

The Sephora lawsuit was widely covered by mainstream and trade media, including leading outlets such as Vogue, Bloomberg Businessweek, Elle, and ABC7 News. Coverage focused on:

The scale of the account deactivations and the demographics impacted.
Insight into common anti-reseller strategies used by luxury and beauty retailers.
Broader conversations on diversity, equity, and inclusion in the beauty sector.
The responses of customers, civil rights groups, and other industry players to the legal and ethical issues raised.

Peers in the beauty industry watched closely, as any court-imposed compliance or damages might influence future risk management and security practices across similar brands.

Sephora’s Actions Following the Lawsuit

While vigorously defending itself in court, Sephora publicly committed to “listening to all our clients and ensuring inclusivity in every aspect of our business.” The brand reviewed its policies and undertook steps to ensure that fraud detection mechanisms would not unduly discriminate against specific groups. However, public critics noted that policy adjustments alone could not fully repair the reputational damage or address systemic issues without external oversight.

Company representatives pledged ongoing dialogue with affected customers and advocacy groups.
Some reports indicated internal training sessions and reviews of technology platforms to prevent identity-based bias.
Industry analysts highlighted the importance of proactive communication and transparency in rebuilding customer trust post-crisis.

Understanding Racial Profiling in Retail

Racial profiling in the retail sector is not a new phenomenon but remains under-scrutinized, especially in online environments. Profiling occurs when companies use race, ethnicity, or national origin as a primary indicator for suspicion or exclusion. In e-commerce, this can manifest in:

Blocking or flagging accounts based on the user’s name, email address, or country of origin.
Deploying automated anti-fraud technologies that embed biased associations.
Customer service protocols that treat certain groups with more suspicion and less accommodation.

Such practices run afoul of anti-discrimination laws, often exposing brands to lawsuits, customer boycotts, and reputational risk.

The Role of “Gray Market” Concerns

The gray market refers to the unofficial buying and reselling of retail goods, often at a markup, and frequently in markets with higher demand or limited supply. Beauty brands like Sephora are particularly vulnerable during events featuring limited-edition items or steep discounts. However, using nationality or ethnicity as a proxy for potential resellers is not only flawed but can have deeply negative social consequences. Legal experts urge companies to develop data-driven, fair risk mitigation strategies that protect both business interests and consumer rights.

The Broader Significance for Diversity and Inclusion in the Beauty Industry

This lawsuit against Sephora underscores the persistent challenges that companies face in balancing fraud prevention with nondiscriminatory customer service. It also spotlights the ongoing need for greater diversity, equity, and inclusion (DEI) in every aspect of the beauty and retail industries.

Brands are increasingly held to account for both overt and subtle acts of bias or exclusion.
The incident prompted greater attention to customer concerns around fair treatment, especially among demographics that drive significant sales and cultural cachet in the beauty market.
Many industry observers called for companies to not only review policies but also invest in workforce training and representation at all levels.

Lessons for E-commerce and Retail Businesses

The Sephora case provides several critical takeaways for retailers operating in a global and increasingly diverse marketplace:

Transparency: Clearly communicate the rationale behind account suspensions or other anti-fraud measures, focusing on behaviors rather than presumed identity.
Non-discrimination: Use fraud prevention tools that analyze purchase patterns, frequency, and IP patterns, not names or email domains.
Customer engagement: Provide timely and responsive customer service channels to resolve issues and restore affected accounts, especially during high-demand events.
Continued oversight: Regularly audit algorithms and manual processes to spot and eliminate encoded biases.

Frequently Asked Questions (FAQs)

What prompted the lawsuit against Sephora?

The lawsuit was initiated after numerous customers of Asian descent found their accounts blocked during Sephora’s annual promotion, leading them to allege racial profiling and discrimination rather than legitimate anti-fraud measures.

Were only Chinese or Asian customers blocked by Sephora?

Court documents allege that the majority of the blocked accounts had indicators of Chinese or Asian identity, but Sephora claimed that blocks were part of a wider strategy affecting multiple countries and were not aimed solely at one group.

How did Sephora respond to the discrimination allegations?

Sephora denied any discriminatory intent, insisting its actions targeted bulk purchase resellers, not specific races or nationalities. The company also provided customer support channels for appealing account blocks, though plaintiffs reported these efforts were largely ineffectual.

What is the significance of the lawsuit for the industry?

The case underscores the risks of using racial or ethnic cues in automated or manual risk systems and has wider implications for anti-discrimination enforcement and DEI commitments across the retail landscape.

What changes can customers expect at Sephora and similar retailers?

In response to public outcry, Sephora and other leading brands are reviewing anti-fraud policies, improving bias training, and reaffirming commitments to equitable service for all consumers.

Conclusion: A Reckoning for Corporate Accountability and Inclusion

The lawsuit against Sephora is more than a dispute over access to beauty products; it is a bellwether for the evolving standards by which consumers judge brands. As the beauty industry expands globally, maintaining vigilance against discrimination, fostering transparency, and ensuring truly inclusive practices are not just legal imperatives—they are the foundation for long-term trust and success.

References

Author

medha deb

Medha Deb is an editor with a master's degree in Applied Linguistics from the University of Hyderabad. She believes that her qualification has helped her develop a deep understanding of language and its application in various contexts.

Read full bio of medha deb