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Alleged victim of Groupon 'shopping frenzy' sues over expiration dates on discounts
By adamg on Sat, 04/02/2011 - 10:09am
A Massachusetts woman who claims she is out $57 because of expired Groupon coupons has filed a federal class-action lawsuit against the company and at least two Massachusetts merchants that used it to drum up business.
In her lawsuit, filed yesterday in US District Court in Boston, Jennifer Bates charges the expiration dates on Groupon offers, typically several months, violates a federal credit-card law that requires expiration dates of at least five years.
Although she mentioned only two specific companies - a Charles River boat company and a laser hair-removal salon, Bates's suit - filed by a Washington law firm that specializes in such cases - left room for 100 more "John Doe" companies as she seeks to become the lead plaintiff in a class-action case involving millions of people across the country.
Bates says she was sucked in by the "shopping frenzy" created by the time-limited daily-deal nature of Groupon offers to buy $24 worth of river-ride tickets and $33 worth of laser hair-removal treatments, then was unable to redeem either after several months:
Defendants impose illegal expiration dates, among other onerous conditions, on each gift certificate they sell and issue. The expiration dates on gift certificates are frequently just a few months from the date of purchase.
Defendants know that after they have driven consumers to purchase gift certificates as quickly as possible, many consumers ultimately will be unable to redeem the gift certificates before the expiration date.
Accordingly, consumers often cannot take advantage of and/or use the product or service they paid for before the expiration date unilaterally imposed by Defendants. This results in a very substantial windfall for Defendants.
In addition to imposing illegal expiration periods, Defendants impose other deceptive and unfair conditions on consumers. Defendants require consumers to redeem gift certificates in the course of a single transaction. Consumers therefore are forced to redeem their gift certificates all at once and cannot use their gift certificates for multiple transactions or on multiple occasions.
Likewise, consumers cannot redeem any unused portion of gift certificates for the cash amount. Defendants place unfair restrictions on the manner in which consumers can redeem the gift certificates for the products and services offered, even though consumers have already paid in full for such products and services.
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Comments
That waxing place is out of
That waxing place is out of business anyway. They just locked the doors one day and didn't call any of their clients with appointments.
How old is the plaintive? Tweleve?
The judge would probably get into trouble asking that, wouldn't s/he?
Last time I checked, there wasn't someone standing behind me with a gun when I get the email announcing any given day's offering, and I find 24 hours long enough to decided if I'm interested/have time to use the Groupon in question.
I did have one expire on me. I was disappointed, but I'm an adult, and I of course realized that it was my fault for missing the expiration date, not Groupon's; heck, they even emailed me a reminder!
Also, trolling through my wallet I find lots of coupons with less than 5 years on them; store coupons, manufacturer coupons, money-back-pharmacy coupons. What is this federal credit card law, and what does is have to do with coupons? (I'm guessing "nothing", given that it seems that everyone is violating it...)
IANAL but the credit card law
IANAL but the credit card law may come in because you pay for the product. These are less coupons, more gift cards on sale. The coupons you get in circulars are quite different.
Gift Cert or Coupon
There are some interesting issues around these items. Groupon hasn't done a good job of telling customers that the coupons they bought still retain their original (paid in) value. They bury this fact behind some wording about how it might apply in your state. I wish they'd just be honest that you keep what you paid, even if the upside expires. That would make it easier to ensure merchants at least honor the original value.
With some many state laws about gift certs and the fact that they retain value (which state unclaimed property offices what to get hold of) means it will be a while before they sort everything out. Just like them not researching Mass. liquor laws, they didn't do a lot of homework on the legal side (though I believe you should be able to use a Groupon on liquor purchases, up to the price you paid for it...that's not a discount).
The courts are getting hit with several of these kinds of cases...should be fun for everyone.
In the FAQ
Actually, after reading this thread I checked out Groupon's FAQ, and it is pretty straight forward and easy to understand that even once the original deal expires, you can still get your original investment amount back. No, it's not emblazoned on the deal page, but I don't think that putting something in a FAQ counts as burying the information.
I still think this plaintive is out to lunch. She should use one of her expired Groupons! :)
Fine Print
Here's the fine print on the Groupon I have in my online account. I'm not sure if this is changed language or the original terms from a year ago. They do hide behind "applicable laws" quite a bit. They could be more direct -- it's their policy to redeem expired Groupons which the merchant rejects -- just say that!
Fine Print:
However, even if the promotional offer stated on your Groupon has expired, applicable law may require the merchant to allow you to redeem your Voucher beyond its expiration date for goods/services equal to the amount you paid for it. If you have gone to the merchant and the merchant has refused to redeem the cash value of your expired Voucher, and if applicable law entitles you to such redemption, Groupon will refund the purchase price of the Voucher per its Terms of Sale.
Partial Redemptions: If you redeem the Voucher for less than its face value, you only will be entitled to
a credit or cash equal to the difference between the face value and the amount you redeemed from the merchant if applicable law requires it.
Redemption Value: If not redeemed by the discount voucher expiration date, this Groupon will continue to have a redemption value equal to the amount you paid ($10) at the named merchant for the period specified by applicable law. The redemption value will be reduced by the amount of purchases made. This Groupon expiration date above, the merchant will, in its discretion: (1) allow you to redeem this Voucher for the product or service specified on the Voucher or (2) allow you to redeem the Voucher to purchase other goods or services from the merchant for up to the amount you paid ($10) for the Voucher. Vouchers cannot be redeemed for cash or applied as payment to any account unless required by applicable law.
are you using 'plaintive' isntead of 'plaintiff' on purpose?
You did it twice in this thread. Are you trying to say that this person is a sad sack?
Um. Oops?
Hey, if the name fits...
Mea culpa on the spelling error.
I ANAL? That's hot. Dude,
I ANAL? That's hot.
Dude, this isn't usenet in 1993, stop using out of date acronyms.
Got love for my nerds but nerd please.
Fifty seven dollars? Grow up
Fifty seven dollars? Grow up and move on.
Wait...
So there's a river boat company that will perform laser hair-removal during the cruise? SIGN ME UP!
Did she even contact Groupon about this?
I had a certificate for a cupcake place in Brighton Center that went out of business before the Groupon expired and after I contacted them, they gave me a credit for the amount I've paid. Also, if you don't redeem the Groupon before it expires, the company you are redeeming it from is supposed to take it at face value for the amount you paid. So you really aren't out any money, you just missed out on a deal.
Also, for $57 she should calm the eff down.
The suit does mention contact
Several months after she paid for the offers.
Also, yeah, $57? But this is supposed to be a class-action suit affecting millions of people. It adds up - especially if you're the lawyers on the case.
She did it wrong
If you don't use a Groupon that you paid $33 for before it expires, you don't get your money back from Groupon. You just get to use it as $33 towards a purchase from the merchant.
If the merchant goes out of business in the meantime, that's a different issue, but the lawsuit doesn't allege this.
I see no evidence of dishonest or wrong behavior by Groupon or any of its competitors in this market. They clearly state upfront what the conditions are for using these discounts. This lawsuit should be thrown out with great force.
The lawyers will make
The lawyers will make millions of dollars, and the affected consumers will get a $10 discount on future purchases from Groupon.
Perhaps
They have only recently been clear about getting money (or value) back if the coupon expires. They have some vague wording on their coupons that says that state law *may* change the terms.
I think they deliberately have been vague in a hope to keep more of the pie for themselves when customers let Groupons expire. They didn't check out Mass. laws on liquor discounts before including it on Groupons.
exipration?
I thought newish laws stated companies couldn't put expiration dates on gift cards and certificates?
A Boston-based company I
A Boston-based company I recently worked for constantly talked about gift card stored-value-dollars not being allowed to expire for 7 years per MA law.
Yeah, I think she has a case
Yeah, I think she has a case here.
The portion you paid doesn't expire
Just the deal part. So if you pay $10 for a $20 groupon with an expiration date three months from now, you have three months to use it as a $20 certificate. After that, you can use it as a $10 certificate whenever you want. So no money lost.
And every deal has a link to the FAQ that explains this.
It's a little fuzzy...
And I admittedly don't know too much about the law, but I think gift cards and gift certificates are different from coupons. A gift card or certificate is for a pre-paid, set amount. You can still use an expired Groupon for the amount you paid, you just missed out on the deal. I don't think she has much of a case.
Question (slightly OT)
The whole thing about groupons not being applicable to alcohol....You can use a gift certificate for alcohol but not a groupon? Anyone know the rationale? Other than this being MA, we have to make things difficult for people?
I think
because in Mass. you aren't allowed to get any sort of special discount on alcohol sales. With a Groupon you could technically buy say $25 worth of booze with the coupon you paid $10 for. A gift certificate has been paid for the full value it is worth. I think the only way around that law in this state is to offer Groupons for gift certificates of a higher value. It's all completely ridiculous and reminds me of my college days when we used to use our dining dollars at the local pub to buy gift certificates, since we couldn't directly buy beer with our dining plan.
But I think you are right, the only rational as to why this is so difficult is that this is Mass.
Debate
But if you paid $25 for a Groupon or the like, why wouldn't you be able to use that amount toward your alcohol and the discount portion toward your food?
I agree!
That would be fantastic! Especially since I have some Groupon for places where it will now be considerably harder to rack up that $40 bill on food alone with just one other person. Date night now has to be a group outing for that thing to be useful. Then when you add more people in, figuring out who owes what is a headache. It would be easier if they just let you use the the amount you paid towards alcohol.
I guess it could be the restaurants not willing to take time to figure out the math of what get's discounted and what doesn't, what happens when a table goes over the set amount of paid alcohol etc. Again, I'm not going to pretend I'm an expert in this. I have never worked in the food service industry, so I don't really know how complicated it would be to work out the bill for these type of Groupons. Just like, I'm not a lawyer and am only slightly familiar with Mass. sate liquor laws based on my own personal experiences with them. I think it would be great if the laws were revised to cover the sale of alcohol under Groupons (et. al.), but this is still a relatively new issue, I mean look at how long Groupons DID cover the sale of alcohol in Mass.!
In the end, the fact that it doesn't cover the sale of alcohol is not a huge issue. No one is being forced to buy these things. If you look the the value of the Groupon and the place it is being sold towards, you can make a decision to either buy it or not. Will you buy $50 worth of food at your favorite restaurant in the North End without alcohol? Sure, no brainer! Will you buy $40 worth of food at your favorite pub down the street? Perhaps not.
100% Correct
We have a client at the accounting firm I work for that has about $2.5m in sales per year, and has $700,000 in gift certificates out in limbo. People buy them and forget about them or lose them, but can't write them off the books for 7 years.
No Complaints
It's pretty much free revenue, even if you have to wait 7 years to declare it as "profit".
It can be done right...
Nordstrom shows how to do Groupons the right way... very clear. I remembered them noting that if used in MA and a few other states the extra value doesn't expire (interesting)... also says up front that the amt. paid doesn't expire. Nice job Nordstom. Here are the T&C's from their offer last year:
Nordstrom Rack Complete Terms and Conditions
TERMS AND CONDITIONS ARE APPLIED TO GIFT CERTIFICATES/GIFT CARDS
Limit 1 per person
>Good for $50 value of merchandise ($25 customer Paid For value plus $25 Add-On Offer value)
>Add-On Offer Value EXPIRES ON* December 31, 2010 ($25 customer Paid For value never expires)
>Add-On Offer Value is valid from November 19, 2010-December 31, 2010
>May not be redeemed for cash except as required by law.
>Valid only at Nordstrom Rack locations
>Offer may not be used as payment on account
>Will not be replaced if lost or stolen
>Must be used in a single transaction and surrendered in store at time of merchandise purchase
>May not be used to purchase Nordstrom Gift Cards
>Value of merchandise purchased must be at least $50, or remaining balance will be forfeited
>Offer cannot be combined with any other offers, discounts, promotions or with a Nordstrom employee discount
>Offer not valid in Nordstrom Stores, Last Chance, nordstrom.com or by phone
>No adjustments on previous purchases
>Not reloadable
>To verify balance call 1.877.283.4045
*For Nordstrom Rack Groupons purchased from the states of Kentucky, Massachusetts, Maine, New Hampshire and Connecticut, Add-On Offer value will not expire.