Shein Agrees to Pay $100 Million in U.S. Investigation as More Than 12,000 Consumer Complaints Are Recorded

E-commerce and fast-fashion company Shein, founded in China, has agreed to pay $100 million to settle an investigation conducted by the U.S. Federal Trade Commission (FTC) into delivery delays and consumer complaints. The amount represents 44% of the company's second-quarter profit. Founded in China and headquartered in Singapore, the company faces various regulatory investigations in the U.S. and Europe.

More Than 12,000 Consumer Complaints Filed Against Shein

According to FTC records, more than 12,000 consumer complaints were filed against the company between January 2020 and June 2026. The total value of purchases associated with these complaints exceeded $11 million. Some complaints reported that e-commerce orders had not reached customers despite being marked as delivered. Some consumers stated that their attempts to resolve issues through customer service were unsuccessful. The details of the complaints and whether they were subsequently resolved could not be verified.

In a statement to Reuters, Shein said it had reached a constructive outcome with the FTC and would share details of the settlement shortly. An FTC spokesperson declined to comment. In documents published in July as part of its Hong Kong stock exchange listing application, the company had stated that the investigation could result in significant financial penalties.

European E-Commerce Regulations Increased Shein's Costs

The company, which sells its own branded clothing products, also operates a marketplace that allows third-party sellers to offer products in categories such as toys, home appliances, and home decor. An additional processing fee of €2 will be introduced on November 1, 2026, on top of the European Union's existing €3 fee on low-value e-commerce shipments. As a result, the total fee will increase to €5 for separate customs codes.

Mike Ryan, Head of E-Commerce Insights at Smarter Ecommerce, stated that the way the tariffs are implemented has particularly severe consequences for the company. Shein CEO Sky Xu announced plans to develop higher-priced brands to improve profitability.

Shein Shares Declined by 22%

The company's shares have lost 22% of their value since its Hong Kong stock exchange listing on September 1. According to Jefferies analysts, downloads of the company's mobile application declined by 42% year-on-year across 10 markets in September. The European Commission is continuing its investigation into illegal products sold on the company's marketplace. Meanwhile, France's data protection authority imposed a €150 million fine in 2025 for violations related to cookie usage.

E-Commerce Deliveries Face Regulatory Scrutiny in the U.S.

The FTC previously imposed a $9.3 million penalty on Fashion Nova in 2020 for failing to fulfill delivery commitments and a $1.95 million penalty on Hey Dude in 2023 for violations related to delay notifications and negative customer reviews. While artificial intelligence-powered operations are also used across retail and e-commerce platforms, the disclosed grounds for the current FTC investigation do not include any violations related to artificial intelligence applications.