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. identicon
    DeAngelo Lampkin, 3 Mar 2011 @ 7:48pm

    The suit has merit.

    As you mentioned, part of the reasoning behind the gift card law is due to unclear expiration dates on gift cards. But another part of the reason is that money was paid for those gift cards (as noted by Scote above). The government said businesses aren't allowed to sell people special currency that magically loses its value over time.

    A groupon is only like a coupon, when you don't have to pay for it. If you are paying for the deal ahead of time, it's exactly like a gift card IMO.

    -DeAngelo
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