No “Deal” When Your Coupon Expires – LivingSocial and Groupon Profiting Illegally

livingsocialThanks to LivingSocial and Groupon, online connoisseurs of “daily deals” in the Puget Sound area, tens of thousands of consumers in Washington have eagerly purchased coupons to restaurants, salons and theaters at significant discounts, ranging from 35-78% off the retail price, with hopes of saving money. Unfortunately, these consumers are soon, collectively, thousands of dollars out-of-pocket. The consumers’ loss are significant profits for LivingSocial and Groupon. The reality of this harsh injustice hits consumers only after they purchase their coupons online and first have the opportunity to learn there is an expiration date on the coupon and that it’s fast-approaching. With restrictive terms on the coupons, consumers are soon left with an expired coupon with no value.

Selling coupons and gift certificates with an expiration date in Washington State is illegal. The Attorney General Office explains the Washington States Gift Card Law, RCW 19.240 et. al. on its website. The Gift Card Law went into effect in 2004 to ensure consumers receive what they paid for every nickel of a gift card or gift certificate’s purchase price.

If Groupon complied with Washington State’s Gift Card Law, it would impose a significant financial loss to some of its most popular merchants, such as Nordstrom Rack. Last November, in preparation for the holiday shopping season, and the much-anticipated biggest shopping day annually, the day after Thanksgiving, Nordstrom Rack offered a $50.00 gift certificate for $25.00 on Groupon. In just a couple days, 49,794 coupons were purchased in Washington State. If Nordstrom Rack were to honor all of the purchased coupons, it would incur $1,244,84 in lost revenue. So, in order to protect its desired customer (Nordstrom Rack), Groupon placed an expiration date after the shopper passed the point of purchase of the coupon online. Now hundreds, if not thousands of Groupon coupon holders have invalid coupons.

Some hungry shoppers, with extra energy, time and finesse, navigate the hierarchy of the coupon’s merchant’s management to try to strong-arm them into honoring the value of the coupon, not the purchase price. Some smaller merchants, valuing their customers, honor the value, others, refuse.

If you have been refused the value of a Groupon coupon, contact Alexandra Filutowski to discuss your legal rights and options for recovery.