Is Monat a Pyramid Scheme?

Monat is technically not a pyramid scheme, but is a multi-level marketing company. What to know about the beauty brand.


Jessica Lee
Updated 26 April 2022
Is Monat a Pyramid Scheme?
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Monat is a pyramid scheme.

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Monat's business model requires actual products to be sold to make money as a distributor. So although you can make more money by recruiting more VIP members, you can't make money just from recruiting more distributors. 

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Sections on this page
  1. What is Monat?
  2. Is Monat a Pyramid Scheme? Reasons It's Not
  3. Why the Controversy?
  4. How You Earn Money Through Monat
  5. How to Test Monat Products at Home
  6. What to Do If You Have an Adverse Reaction
  7. What to Do if You're Charged for Monat Products You Didn't Order
  8. How to Return Monat Products
  9. Monat Customer Service Contact Details

Monat is a global multi-level marketing (MLM) company that sells hair care products, including shampoo, conditioner, and different oils. They have also recently branched out and started selling skincare and wellness products too.

Although the company has had its share of controversies, it is technically not a pyramid scheme.

What is Monat?

Monat is a beauty brand that sells haircare and skincare products that it develops. It promises that its products are free from parabens, sulfates, and animal-derived ingredients. Monat is best known for its line of shampoos, conditioners, and hair masks, as well as for its sales approach.

is monat a pyramid scheme

Monat is a multilevel marketing company that makes most of its sales through individual reps (also known as market partners) who sell the product directly to consumers instead of through a retail store. While popular, some users have found that using its shampoos and conditioners has led to issues such as hair loss, breakage, skin irritation, and scalp flaking.

It is just one of the many direct sales companies that people call a scam due to its questionable business model that mimics a pyramid scheme.

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Is Monat a Pyramid Scheme? Reasons It's Not

Before diving into why Monat is, in fact, a legitimate multi-level marketing company and not a pyramid scheme, it's essential first to understand what a pyramid scheme is. 

Pyramid Scheme Definition (Source: Investopedia)

A pyramid scheme funnels earnings from those on lower levels of an organization to the top, and are often associated with fraudulent operations. The vast majority of pyramid schemes rely on profiting from recruitment fees and seldom involve the sale of actual goods or services with intrinsic value.

Pyramid schemes are sketchy business models, essentially making people pay for a membership with nothing in return unless you recruit more members. 

Monat is not considered a pyramid scheme because, although you do make more money as a market partner (sales rep) if you sign up new members/recruits, you still need to sell products to make any profit—you can't make money just by recruiting.

If Monat's business model meant you could profit without selling products and earn via recruiting other sales reps or market partners, it would be deemed an illegal pyramid scheme.

Why the Controversy?

Since 2014 Monat has been at the center of 11 lawsuits, over 300 reports to the FDA, over 450 reports to BBB, and investigations by both the FDA and the Florida Attorney General.

The consumer complaints and the resulting investigations relate to issues including:

  • The adverse effects of Monat products on consumers
  • Misrepresentations about ingredients
  • Unclear disclosures for returns policies
  • Misleading claims related to product performance
  • Failure to obtain proper authorization before initiating Electronic Funds Transfers

So, Is Monat a Pyramid Scheme?

Despite the numerous complaints, Monat's business model has proven effective. The company was recognized by Inc., making the top 5,000 list of the fastest-growing companies in America with a reported 718% growth rate and recent market expansion into Ireland, Poland, Spain, and Australia.

Florida Attorney General Investigation into Monat

In 2020, the Florida Attorney General completed a 2-year investigation into whether Monat violated the Trade Practices Act. The resulting 33-page report focused on the areas of concern related to Monat’s business practices and did not result in a fine or legal action from the Attorney General.

Instead, Monat agreed to enter into an Assurance of Voluntary Compliance without admitting that they violated any law. The report requires Monat to:

  • Maintain a customer support telephone number with a call wait time under 10 minutes.
  • Provide an email address for consumers to file a complaint.
  • Ensure all complaints are responded to within 3 business days.
  • Provide clear disclosures on their refund and cancellation policies.
  • Provide supporting data concerning any clinical test or study.
  • Obtain written authorization from consumers for EFT transfers before initiating any transfers.
  • Provide clear disclosures regarding the VIP Program and minimum purchase requirements before obtaining billing information and/or payment from any consumer.

BBB Complaints about Monat

Monat is not accredited by the Better Business Bureau (BBB). In the last 3 years, BBB has received 458 complaints, with 92 coming in the past 12 months, including:

  • 55% related to a "Problem with a Product or Service"
  • 19% related to "Guarantee/Warranty"
  • 18% related to "Advertising & Sales"

Recent complaints mainly relate to claims of unauthorized charges by customers who had signed up for the VIP program without realizing the adverse effects of Monat products (particularly haircare) on consumers' health. These complaints weren't directly related to its business model or its similarities to a pyramid scheme.

Is Monat a pyramid scheme
Example of complaints reported to the BBB. (Source: Better Business Bureau)

When consumers enroll for the Monat VIP program, they are signed up for the Flexship Program, which requires them to purchase a minimum of 3 orders of $84 or more, which is automatically charged to their credit card.

If a customer decides to leave the VIP Customer Program before making the 3 qualifying purchases, they are charged a cancellation fee.

A majority of the people who were signed up for the VIP membership shared that their sponsor was the one who ordered everything for them and didn’t inform them about being a part of any VIP membership.

Why Are Customers Being Signed Up for VIP Memberships?

Market partners (i.e., sales reps) make a $60 bonus for every four VIP members they sign up with within a month. This is likely why many people are being signed up for VIP membership without their knowledge or authorization. 

One person even noted that they hadn’t ordered or talked to the market partner who sold them their Monat product in almost three years, but they recently saw a charge on their card. Her market partner had been signing into her account, pushing back the flex ship order. However, when she had to change the password, her market partner could no longer log in to push back the flex ship order, so it went through.

In all of the cases reviewed on BBB, Monat responded to customers quickly and extended them refunds in line with their policies. In some cases, particularly where consumers suffered adverse effects, they were offered partial refunds outside the specified policies.

FDA Investigation into Monat

According to a 2018 news report from KTNV, the FDA sent inspectors to the Monat manufacturing facility after receiving more than 300 reports from consumers of adverse reactions to their products, including hair loss and allergic reactions.

Their report found “cosmetics being prepared, packed or held under insanitary conditions whereby it may have been contaminated with filth,” according to the KTNV story.

How You Earn Money Through Monat

There are several ways to make money by selling products with Monat, with the lowest level being as a market partner. From there you can work your way up to a Managing Market Partner, Associate Market Builder, Managing Market Builder, and the list continues.

As you work your way up the ladder, you have the potential to earn more money, but you have to meet certain qualifications first.

Monat compensation plan 2019
Monat's Compensation Plan (2019)

How Market Partners Make Money

At the lowest level, market partners make money by selling at least a Personal Volume (PV) of 200 in a month. This is the only requirement for those at this level to make money.

You will then earn:

  • 30% on sales from retail customers
  • 15% on sales from VIP customers
  • 7% off sales the market partners underneath you

In addition, if you sell more products, you can earn more money:

  • Earn 3% by selling 1,000 - 1,999 PV
  • Earn 5% by selling 2,000 - 3,499 PV
  • Earn 10% by selling 3,500 PV or more

You can also earn a $60 bonus by enrolling 4 new VIP customers in a single month. There are also other bonuses you may qualify for.

What is Personal Volume?

Personal Volume (PV) is anything you buy or your customers buy from your Monat website link or directly from you. It doesn't include any purchases your market partners or their customers make. Each product is given a point value that is added to your PV.

How to Test Monat Products at Home

The American Academy of Dermatology Association recommends testing any new skincare products on small areas of skin to see if you have any reaction. They recommend some of the following steps:

  • Apply the product to a test spot twice daily for 7 to 10 days
  • Leave the product on your skin for as long as you would normally
  • If you have a reaction, gently wash off the product as soon as possible, and don’t use it again.

If you have any concerns, talk to a certified dermatologist. They can run further tests to determine the ingredient causing the reaction, which is helpful to know so you can avoid products that contain that ingredient in the future.

What to Do If You Have an Adverse Reaction

  1. If you have used any Monat products that have caused a negative effect, stop using them immediately.
  2. Seek medical advice from your Doctor or Dermatologist.
  3. Report it to the FDA via the MedWatch website.
  4. Contact Monat customer service and request a refund.
  5. If you are unhappy with the response, you can post a complaint on the BBB website and/or contact the Florida Attorney General

What to Do if You're Charged for Monat Products You Didn't Order

  1. Do not open any of the products.
  2. Contact Monat customer service immediately and request a refund.
  3. If you are unhappy with the response, you can post a complaint on the BBB website and/or contact the Florida Attorney General

How to Return Monat Products

If you are unhappy with the products for any reason, Monat has a 30-day money-back guarantee from the delivery date. You, as the customer, are responsible for the return shipping costs. 

If you return the product between 30 and 90 days of the initial delivery date, you can get a 90% refund of the purchase price (you're still responsible for the return shipping costs). After 90 days, there is no refund available.

Apply for a Return Authorization Number

To get a refund, you must apply for a Return Authorization Number (RAN) by contacting Monat Customer Care. They will provide you with details on returning the products and processing your refund.

Cancel VIP Flexship

If you have signed up for the VIP Flexship Program, you can cancel it by contacting Monat Customer Care. Monat may charge you cancellation fees if you have not completed the minimum lifetime requirement of 3 orders. 

If you have only completed your enrolment order (1 of the 3 orders), you may be charged $25 for canceling. If you have completed your enrolment order plus one Flexship order, you may be charged $19.

Monat Customer Service Contact Details

Contact the Monat U.S. Customer Care department at the details below:

Customer Service Hours

  • Monday: 8 am – 11 pm EST
  • Tuesday: 8 am – 11 pm EST
  • Wednesday: 8 am – 11 pm EST
  • Thursday: 8 am – 11 pm EST
  • Friday: 8 am – 11 pm EST
  • Saturday: 8 am – 5 pm EST
  • Sunday: 8 am – 5 pm EST
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