Everyone loves a deal, so it stands to reason that group coupons and daily deals have become popular. But, in this rapidly expanding and competitive marketplace, consumers also find themselves running into problems at a growing rate.
Why?
A lot of it has to do with how the deals are sold - typically with an enthusiastic pitch that certainly doesn’t emphasize any of the drawbacks. Before you buy these deals, remember that you’re paying cash upfront with the intention of using it in the future.
That’s a big risk. Will you use it? Can you use it when you want? When does it expire? Do you have to spend additional money to get the deal? You need to resolve these questions before you buy.
Because of increasing complaints about deal sites, Harvard Business School professor Ben Edelman and two students, Xiaoxiao Wu at Harvard and Paul Kominers from MIT, built a free online tool to help consumers write appropriate complaint letters. They recently launched vouchercomplaints.org as a follow-up to a study that Edelman, a lawyer, did on where these deals might run afoul of the law.
“I was struck by my own difficulty in getting voucher services to comply with Massachusetts law,’’ he said. “If this is so hard for me, with … a legal practice that includes work on consumer protection matters, it must be even worse for regular folks.’’
One of the main legal issues is whether the vouchers are gift certificates rather than coupons. Connecticut’s attorney general has launched an inquiry into that question.
In the fine print, Groupon and several competitors say they’ve directed merchants to honor the purchase price, rather than the higher face value of expired deals. Edelman says that’s not enough; if you paid for $50 of merchandise, that’s what you should get.
Edelman also noted that at least a dozen lawsuits have been filed nationwide against Groupon alone over expiration dates.
For now, consumers need to pay attention to the fine print. They should use deal coupons they get, and know there’s a place to help them properly complain if the need arises.
Mitch Lipka is a nationally known consumer columnist and runs TheConsumerChronicle.com. He lives in Worcester. You can find him on Facebook at http://on.fb.me/MitchLipka. He can be reached at ConsumerNews@Aol.com.