A class action was filed yesterday in U.S. District Court for the District of Columbia accusing Groupon Inc. of placing unlawful expiration dates on its gift certificates.
The Web site, which has headquarters in Chicago and an office in Palo Alto, Calif., works with businesses in cities across the United States and around the world to offer consumers discounted rates on goods and services, from restaurant meals and flowers to hot air balloon rides. The company sells these “Daily Deals” online.
The class – represented by Charles LaDuca of Washington’s Cuneo Gilbert & LaDuca – alleges Groupon violates federal laws governing electronic sales by placing expiration dates of less than five years on these “Daily Deals,” which the suit classifies as gift certificates. In a phone interview, LaDuca noted that similar class actions are pending in Illinois, Minnesota, California and Florida federal courts.
“There are a lot of angry consumers across America on this issue,” he said.
The suit also alleges that Groupon “preys on unsuspecting consumers” by requiring users to agree to “boilerplate” terms and conditions that include a class action wavier. LaDuca said that in addition to claims for damages, the class is seeking a court order requiring Groupon to change its practices.
Groupon, through a spokeswoman, declined to comment, citing the pending litigation. The company did not have an attorney listed for the Washington suit as of this morning, nor did it have representation listed yet for most of the class actions filed this year in other states.
The suit was filed on behalf of a Washington man who claims he bought a $20 Groupon for a one-month gym membership worth $305, only to have it expire before he could redeem it two months later. The complaint quotes anonymous Web-based comments from other Groupon users expressing frustration with the expiration dates.
Groupon use misleading and deceptive selling practices?
After registering the other day and making my first purchase I received my email to say 'here is your voucher'
I received this after 12pm on the Wednesday 22.2.12. I open my emails on Thursday 23.2.12 and proceeded to follow the instructions. It did not work and after contacting their website for support and reading and re-reading the email 3 or 4 times I noticed that voucher is Valid from 22.2.12 to the 22.2.12. THAT IS NOT EVEN 12 HOURS TO REDEEM MY VOUCHER!!!
And the response from the support team?? "I am sorry to inform you that in this case, your voucher has expired." and "We are unable to refund expired vouchers as it is displayed on the voucher and part of our terms and conditions." Nowhere in your terms & Conditions or Fine Print does it say that I have less than 12 hours to redeem this voucher.
Buyers BEWARE!
Posted by: Andrea | February 24, 2012 at 04:56 PM
Once the expiration on the groupon has passed..you can then use your groupon like a gift certificate. For instance, if you you paid $18.00 for $40.00 worth of steak you will only get your $18.00 worth of steak after the expiration. Does this make sense? If you have problems using your groupon in this manner (as a gift certificate) then e-amil Groupon. They will credit your account. It's not their fault that you let your groupon expire. However, all is not lost.
Posted by: Natalie Marksman | May 08, 2011 at 01:49 PM
Another great victory for the parasitic plaintiffs' bar.
Darren McKinney
American Tort Reform Association
Posted by: Darren McKinney | March 11, 2011 at 11:10 AM
Seems like Groupon isn't in the wrong here. They are outlining their policy in print. It seems like those who are purchasing the coupons aren't paying attention to the expiration dates until it is too late. It's unfortunate to lose money after purchasing coupons, but can't really blame Groupon.
Posted by: Harrison Aguilar | March 11, 2011 at 06:34 AM
I have been nothing but happy with Groupon and found them extremely honorable. When I had trouble with a company, I CALLED THEM on the phone and they immediately put the money I'd paid back into my account. This nit-picking that allows careless people and greedy lawyers to put their energies into stuff like this is maddening. I will be glad to testify for GROUPON and will tell them so. Good luck....their deals can't be beat!
Posted by: Lois E. | March 10, 2011 at 08:25 PM
I agree that Groupon clearly discloses the expiration dates and that consumers "should" recognize that a short expiration date is part of the great deal. But, as the prepaid industry (gift cards, etc.) has experienced, reasonabilty and expecting consumers to understand what they're buying are not enough. Groupon, it seems, did not recognize or ignored that it is providing is an electronic form of a gift certificate, and there are state and federal laws with which it must comply. Being a fun, funky online business doesn't make it immune to laws and regulations to which other businesses must comply. By (apparently) ignoring the law, Groupon has opened itself up to much woe. These class actions are entirely predictable. And, wait until the consumer advocates begin addressing Groupon's breakage levels.
Posted by: MB | March 10, 2011 at 01:25 PM
I think lawyers need expiration dates stamped on their foreheads and limits placed to how much they can extort from businesses. What do you call a hundred lawyers on the bottom of the ocean - a good start. I say make an e-lawyer computer program and put them all out of biz.
Posted by: Byron | March 10, 2011 at 10:36 AM
Groupon advertises with each offer the following
"Promise":
"Our Promise To You [P] Nothing is more
important to us than treating our customers
well. [P] If you ever feel like Groupon let you
down, give us a call and we'll return your
purchase -- simple as that."
Since Groupon has not limited this "Promise",
e.g., to instances of customer dissatisfaction
arising from objectively reasonable criteria, a
customer unhappy with the application of an
expiration date, however prominently it may have
been advertised, should be able to use this
"Promise" to at least unwind the transaction. To
the extent Groupon fails to honor its "Promise"
when a customer's dissatisfaction is connected
with the application of an expiration date,
customers should be able to challenge that.
An unfortunate problem with "New Economy" (i.e.,
Internet) enterprises is that their business
models often rely on hypertechnical application of
arbitrary and unilaterial policies, while their
short time in the sun leads them to prioritize
profitability of each small transaction over a
long-term relationship with the consumer. Because
companies in this position are largely immune to
market discipline through customer reputation
mechanisms, litigation may be the only viable
solution for aggrieved customers.
Posted by: Neil C | March 10, 2011 at 03:04 AM
Read the print, it's not that hard
Posted by: Lawyerfy | March 10, 2011 at 12:14 AM
Are we really such idiots that we get so enticed by the deals that we don't read the terms of the deal which are plainly stated as part of the deal? Is this really worth a class action case that will again serve to clutter up the court system and give the lawyers bringing the action yet another windfall? Is Mr. DeLuca actually prepared to litigate this or is he looking for yet another class action settlement that provides exorbitant legal fees to him and his firm? As an attorney, I have to say that this is but another example of lawyers giving the profession a bad name at the expense of an entrepreneur that is giving consumers what they want. I'm sure that Mr. DeLuca has agreed to give his fees to charity, since he claims to be doing this for the good of consumers. What a joke!
Posted by: Edward Rich | March 09, 2011 at 08:12 PM
I too let an expiration date pass. It was maddening, but I blamed myself, not Groupon. The situation resolved happily when the vendor made an exception and honored the terms.
I think this is almost a viable claim, but not quite. Groupon trades a great deal for restrictive fulfillment dates. Gift cards, if discounted at all are only modestly so. Groupon states the terms clearly, so there is no notice problem. I don't think the class will win on the merits, but will probably survive summary judgment, and then settle. The members will get a pittance, and the lawyers will get a million bucks.
Posted by: Andy | March 09, 2011 at 07:19 PM
Groupon ALWAYS has the expiration date listed, so I don't understand why someone would buy something and then complain that they couldn't use it before the expiration date. You knew the expiration date before you purchased it!
Posted by: Living in Arizona | March 09, 2011 at 05:43 PM
I guess some deals are too good to be true. Fairly new company is going big and with big mistakes to follow. Nothing new, Groupon is a fishing pole and you are a dumb fish. I had great experience with them. Nice guys but need to put their stuff together too busy making that buck. Too bad.
Posted by: kat g | March 09, 2011 at 05:42 PM
The only people who are upset about Groupn are morons who can't read. The expiration dates are clearly stated. I bought a Groupn for Barnes and Nobel, They were very clear about the expiration date, I used it and got exactly the benefit I thought I would get. These are not gift certificates. Business can't be forced to dumb itself down so that it talks only to morons.
Posted by: John Stone | March 09, 2011 at 05:37 PM
For all you Groupon fans out there...
Posted by: Tconnick | March 09, 2011 at 05:30 PM