Shein agreed to pay $100 million to settle a U.S. Federal Trade Commission investigation into shipping delays, disputed delivery confirmations and poor customer service.
First reported by Reuters on Friday, the agreement follows a 40 million-euro ($45 million) fine in France over misleading discounts and a $700,000 settlement in California over failures to ship orders on time and provide the required delay notices or refund offers.
“We have reached a constructive outcome with the FTC, and additional information will be shared soon,” a Shein spokesperson said in a statement.
The settlement amounts to nearly 44 percent of the Singapore-headquartered firm’s second-quarter profit, which fell 67 percent year over year to $228 million. Shein had warned in a July filing for its Hong Kong IPO that it could face significant fines resulting from an FTC probe into its U.S. operations.
“The outcome of the investigation, whether in settlement or otherwise, may require us to make significant monetary payments that could have a material adverse effect on our financial condition and results of operations,” it wrote in the filing.
Reuters reported that consumers had made more than 12,000 complaints about Shein involving more than $11 million in purchases between January 2020 and June 2026. In several shipping-related complaints to the FTC and the Better Business Bureau, customers said that they hadn’t received packages Shein had marked as delivered and that Shein’s customer service failed to resolve the issue.
The news comes as Shein shares have tumbled roughly 22 percent from their IPO price of 48.56 Hong Kong dollars ($6.19) amid a confluence of regulatory pressures, weaker financial results and higher logistics costs.
The FTC has penalized other retailers for deceptive practices in the past, including Fashion Nova, which agreed to pay $9.3 million in 2020 over shipping delays and issuing gift cards instead of refunds, and Hey Dude, which reached a $1.95 million settlement in 2023 over shipping notification failures and suppressing negative reviews. In 2015, Backcountry.com, Bed Bath & Beyond, J.C. Penney and Nordstrom were fined a combined $1.3 million for mislabeling rayon products as “bamboo.”
The agency also continues to crack down on false “Made in U.S.A.” claims, most recently those by Oak Street Bootmakers, which had touted its boots, loafers, moccasins and other footwear as “handcrafted 100 percent” in the United States.