Groupon Sued For Having Short Expirations On Coupons

from the class-action-madness dept

While I'm still not as convinced as some that Groupon really is a sustainable long-term business, it is an interesting one to watch. And, with any massively successful business, it's no surprise that lawsuits -- especially of the class action type -- follow. The latest is that Groupon is being sued for having its deals expire too soon under the Credit Card Accountability Responsibility and Disclosure Act of 2009. That act does include a provision that gift cards cannot expire for at least five years. So it seems that the basis of this class action is to claim that the deals offered by Groupon are the equivalent of a "gift card," rather than a standard coupon, which can expire in much shorter time frames.

This seems like a pretty big stretch. It's not hard to see that Groupon is much closer to offering a coupon for sale, rather than a gift card. Furthermore, if we just look at the reasoning behind this provision in the law, again, that suggests this lawsuit is frivolous. The idea behind the five year expiry on gift cards is that it's often not entirely clear when those cards expire (they're often not marked) and since they work differently than a coupon (i.e., stored value of some kind, rather than a discount on a particular item) people often hold onto them for much longer. In this case, the expiration date of what's being sold is clearly stated, so comparing it to the situations with gift cards is misguided. The whole thing just seems like yet another attempt by class action lawyers to cash in at the expense of a successful company.
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Filed Under: class action, coupons, expirations, gift cards
Companies: groupon

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  1. icon
    Rose M. Welch (profile), 3 Mar 2011 @ 10:10pm

    Re: Not a coupon

    Since I have to pay for the services in advance, I don't see how it could be called a coupon.

    In marketing, a coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product.

    Ergo, a coupon.

    Its a *pre-paid* gift certificate or card.

    Yes, it's that, as well. Isn't it grand how items can be multiple things at once?

    A coupon implies that you only pay for the services at the time those services are rendered.

    No, it doesn't.

    Groupon offers *prepaid* services and they should be held to the laws that govern such things.

    No one has said that they shouldn't be.

    The question at hand is whether or not they've broken the law, since the portion that you pay for expires just like a gift certificate, according to the law. If you pay $20 for the Groupon, you keep that $20 as long as the law requires.

    In fact, better than the law requires, because if the business closes, Groupon refunds you. If you purchased that certificate directly from the business, you'd be SOL.

    Any questions?

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