UPDATE 2-Overstock.com going fur-free

(Adds statement from J.C. Penney)

SAN FRANCISCO, July 10 (Reuters) - Overstock.com Inc (OSTK.O), which sells excess inventory of clothing, accessories and furniture, will no longer sell fur on its website, the online retailer said on Thursday.

The decision to go fur-free came after the company was contacted by the Humane Society of the United States, which now counts some 100 retailers and designers -- including Calvin Klein, Tommy Hilfiger and BCBG -- who have pledged to shun the use of animal fur in their goods.

"The more we heard about the fur industry, the more we thought we didn't want anything to do with it," said Overstock.com Chief Executive Patrick Byrne during a conference call.

Overstock sold between $1 million to $5 million per year in furs before making this decision, Byrne said, adding that sales growth of fur-related products had been about 30 percent on the site.

The Humane Society, the largest animal protection organization in the country, has been testing garments made overseas, especially in China, after undercover investigations revealed that garments sold in American stores were mislabeled.

The fur from domesticated dogs, cats or raccoon dogs, a type of canine, was found on clothing in which the label indicated the fur was fake; at other times it was found to be from other animals such as rabbits.

Some retailers have pulled the garments off their shelves, but others, including Macy's Inc (M.N), JC Penney Co Inc (JCP.N) and Neiman Marcus have been slow to respond, said Humane Society Chief Executive Wayne Pacelle.

"We believe they may be selling dog and cat fur or raccoon dog fur," Pacelle said, adding the organization has met with the Federal Trade Commission to seek civil and criminal penalties for retailers who falsely advertise fur garments.

Macy's spokesman Jim Sluzewski said the company has a strict policy against selling products with dog or cat fur and that vendors must certify a garment's accurate labeling. He acknowledged an "isolated case or two" in which garments were mislabeled, adding that the clothing was immediately removed from racks.

Neiman Marcus said it was in compliance with U.S. law and J.C. Penney said it does not sell any products containing dog or cat fur and has no plans for fur in its merchandise assortment.

The Humane Society, which supports the sale of fake fur, has been trying to close loopholes in U.S. law that allows these fur labeling mishaps to occur.

Overstock.com will be sending out an email to its customers to alert them of the new fur-free decision, Byrne said.

"It's our hope ... that when companies do make socially responsible decisions, they attract the support of humane minded consumers," Pacelle added. (Reporting by Alexandria Sage; Editing by Andre Grenon and Gunna Dickson)