Whether you're seeking out fresh fall décor for your home or you just need supplies for your latest creative spark, Michaels may well be your go-to destination. This beloved crafts store chain has locations spread across the U.S., and that's helped make it popular among countless shoppers. But as is the case with all retailers, Michaels occasionally strikes a nerve with its customers. Now, the chain is facing a new lawsuit over something it's allegedly doing to shoppers. Read on to find out why Michaels is under fire.
Michaels has been working to enhance its digital presence.
Like many other retailers, Michaels recently decided to upgrade its digital presence thanks to a shift in customer trends. In Feb. 2022, Jason Brenner, vice president of e-commerce at Michaels, said that the company had been executing its "digital transformation over the past 18 months." According to a press release, this has included a number of updates intended to create a better online experience for its customers, including new programs geared toward buying online for same-day pick-up or delivery.
"We will continue to invest in our robust suite of digital capabilities, further enhancing our digital shopping experience and laying the foundation for future strategic initiatives that will connect content, commerce, and community," Richard Armour, senior vice president of e-commerce for Michaels, told Chain Store Age. "We plan to accomplish this by focusing on expanding our product assortment for customers, as well as update our e-commerce platform to continue to reduce friction."
But amid its major digital revamp, Michaels is now facing heat for its website.
The retailer is under fire over its online presence.
A class action lawsuit was just filed against Michaels Stores Inc. over its website, Top Class Actions reported. According to the legal news outlet, the suit was filed on Sept. 14 in Pennsylvania federal court by plaintiff Jennifer Farst. In her suit, Farst claims that Michaels uses "session replay" spyware on its official site. As software company Quantum Metric explains, session reply at its core is "technology that allows you to watch an end user's session as they experienced it, similar to how you watch a video."
According to Farst's allegations, Michaels uses this technology to monitor customer interactions with its website, including their mouse movements, clicks, keystrokes, and search terms, as well as the pages and content they viewed while on the site.
Best Life has reached out to Michaels for a comment on the lawsuit, but has not yet heard back.
The suit claims that Michaels is violating state law.
Michaels allegedly intercepted, stored, and recorded users' interactions with its website without users' knowledge or consent, according to Farst's lawsuit. The plaintiff claims that doing so violates the Pennsylvania Wiretap and Electronic Surveillance Control Act, which requires the consent of all parties for communication recordings.
In her argument, Farst argues that session replay spyware is not comparable to traditional analytics tools used by companies. Instead, the suit says it is "a sophisticated computer software that allows [Michaels] to contemporaneously intercept, capture, read, observe, re-route, forward, redirect, and receive incoming electronic communications to its website."
According to Farst, the information Michaels allegedly collects from user interactions on its website can be used later to create a video replay of a customer's entire visit to the site. The suit claims that "this information is used not to monitor and discover broken website features, but to capture detailed user interactions and use that information to increase engagement, maximize conversion rates, and otherwise boost their profits." As a result, Farst alleges that Michaels is putting website users at risk of identity theft and online scams if this personal information is leaked.
Other companies have been hit with similar lawsuits.
Michaels is not the only major business facing legal trouble for session replay. On Sept. 8, Bloomberg Law reported that Lowe's Co., Zillow Group Inc., and Expedia Group Inc. had all been hit with nearly identical class action lawsuits claiming that the companies had violated Pennsylvania law through their alleged use of session replay software. All of these suits were filed by the same plaintiff, Jamie Huber, who claims that she had the "reasonable expectation" that her visits to each of the businesses' websites would be private and the companies wouldn't be tracking, recording, and watching as she browsed and interacted with the sites.
Session replay software is used by many businesses with consumer-facing websites who are "interested in making their website more interactive and responsive to consumer tastes," Bryan Cave Leighton Paisner (BCLP) LLP explains. But as early as 2021, lawsuits started being levied at companies for this technology through claims that the software violates certain state wiretap acts—particularly in states that have "all party" wiretap laws, which requires that all parties consent.
"Most states require only one party to consent to a recording, but approximately 13 states require all parties to consent," BCLP LLP says on its website. "Plaintiffs have alleged that because they did not affirmatively consent to the use of the Session Replay Software, the website operator has violated the applicable state's wiretap law."