Whimseybox, and a cautionary tale about subscription services and how not to shut down a startup
As you think about holiday gifts this season, I’d like to warn you about the subscription service Whimseybox. This is also a cautionary tale about subscription services in general and the wrong way to go under if you’re a failing startup.
Whimseybox is (was?) a subscription service for people into DIY crafts. For $45 for a 3-month subscription, subscribers get a box every month in the mail that includes instructions and equipment for a DIY project. My daughter, who is a maker and very crafty, begged me for a subscription back in May. We signed up for a three month trial subscription.
Unbeknownst to me, the subscription autorenewed in August. The fourth box came late and was a very lame project that involved gluing cotton balls and straws together. No boxes came after that. There was no communication from Whimseybox about the state of the company or whether we’d ever expect to get the boxes. The remaining two boxes never came.
My card just got charged again in November even though the boxes have stopped coming. I’ve called the company every day for the last week but no one picks up the phone or responds via phone or email. I’ve left messages with their customer service email and still no answer. I had to call my card company to dispute the charge and never accept charges from this company again.
Yet, I cannot recover the remaining charges to my card in August since we are 3 days past the date when I can recover the funds (in my case, Chase gives customers 90 days from the original charge to file a dispute).
All attempts to contact the founder, Alicia DiRago, have failed. The last time anyone posted to the Whimseybox accounts on Facebook or Twitter was in September. I did learn from Patrick Navarro, the cofounder and CTO, that the entire team was let go in September.
The issue for me is not the $45 the company owes me (though on principle, it is annoying). The issue is that this website is still live and running, accepting signups and charging people’s credit cards even though no boxes are being shipped. Just look at the wall of posts from angry customers on the company’s Facebook page (on the left column, see “Posts to Page”).
The company is rumored to have filed for bankruptcy. And yet the site is still running. Whimseybox is a sham site and Alicia DiRago is not operating with integrity. Enough complaints to the Better Business Bureau have been filed that the Colorado State Attorney General’s office is allegedly running an investigation.
Startups come and go all the time. When a company has to shut down, the right thing to do is to communicate with your customers, be transparent, and fulfill your obligations to the extent possible. Then shut the site down. Stop taking signups and stop charging credit cards. It’s not that hard.
What’s more baffling to me is that this company was backed by Techstars, a well known startup incubator. Techstars’ involvement gave me enough confidence in the company to sign up. Now I will think twice before considering Techstars’ involvement in a startup as a measure of credibility. As investors and advisors, I would expect better coaching from them on how to shut down a startup if it is failing and not have fraudulent practices. I understand there is only so much an advisor can do if the CEO does not seek or act on advice. However, surely there is a governing board for this company that is also accountable?
This whole experience has also left a bad impression on me with subscription services. Because Whimseybox is a 3 month (recurring) subscription, 90 days can pass before one realizes that there is actually no product. By that time, the funds from the credit card company have been disbursed, and there is nothing you can do to reclaim that money by filing a dispute. Worse, if you are gifting the subscription to someone else, you may never know whether the products are coming or not, and the whole time you are paying for a service that doesn’t work.
This is not to say that all online subscription services are bad. I’ve subscribed to Birchbox with medium satisfaction (I canceled my subscription after a year — how many fragrance samples can one really use?). But if you sign up, watch your credit card statements carefully and note whether and when the product actually arrives. It’s too easy to let that slip through while you’re going about daily life.
Update: In response to this post, Techstars reached out to a former member of the technical team at Whimseybox and has worked to have the service stop taking signups and charging credit cards on file. It looks like at least a few accounts if not all have been refunded for charges made for which no boxes were delivered. Thank you Techstars for following up!
The opinions expressed here are my own and do not reflect that of my employer(s) or any organization(s) I may be affiliated with.