Rapped by the OFT – will Groupon start to behave itself?

After an investigation by the Office of Fair Trading, Groupon has been given three months to change its practises to make sure it stays within the law. Will the ruling make you more likely to hunt for ‘daily deals’?

About nine months ago I went to a comedy club with my sister. We were promised fun, laughs, live-music and a free buffet. Although this night apparently cost £80, we were offered it for the bargain price of £15 on Groupon – who could resist?

We had quite a nice time – one of the comedians happened to be a firm favourite of mine – so we were certainly entertained. But perhaps the loudest laughs came when we saw the quality of the buffet.

I’ve had better sandwiches from cheap service stations. The food was greasy, cold, and served on paper plates in a venue that even the most optimistic of estate agents would describe as ‘poky’ and ‘dismal’.

So, although a fun night was had, I’m convinced no one would have paid £80 for it. I went away with a slight suspicion that the cost of the evening had been unrealistically inflated, so as to make the discount seem even bigger.

Groupon gets put in detention

The OFT’s investigation uncovered a wide array of practices which it thought breached consumer protection regulations. As a result, Groupon’s been asked to behave itself, and has agreed to a number of strict rules.

Not only will it have to make sure that its promises of huge savings are (ahem) accurate, there are a number of other changes which are more than welcome.

From now on Groupon has promised to take reasonable steps to make sure that health and beauty product claims can be substantiated. We’ve discussed health products and Groupon before on Which? Convo, and our health researcher Joanna Pearl is thrilled by the news:

‘Some of the most common deals on group buying websites are health and beauty treatments, such as laser hair removal. We welcome the OFT’s demands that claims made are adequately substantiated.

‘Some of these treatments can carry significant risk of harm if they’re not done properly, and we believe that good information is the key to people consenting to treatment, including the limitations as well as the benefits.’

Will you give them a gold star?

So at least two pieces of good news here, and I think there’s another one. The daily deals site has also promised to abide by the Distance Selling Regulations, which means you should be able to get your money back within 7 days if you happen to change your mind about a purchase.

I’m delighted, but I’m not sure it’ll save the reputation of this type of website. When we’ve discussed group buying sites before, many of you have shown a healthy level of scepticism – citing concerns about some of the issues mentioned above.

Will the OFT’s investigation, and Groupon’s promise of change, make you feel safer when buying from group buying sites? Or would you rather pay full price elsewhere and not take the risk?

Comments

wavechange says:

19 March 2012

I have stopped getting unsolicited emails from Groupon and seeing their pop-ups on Web pages. Nikki’s report further reinforces my opinion that they are up to no good. If they want my custom they will have to re-launch under an new name. I might then consider using their services if friends make recommendations.

Colin says:

* I`m a born sceptic but the Groupon vouchers my wife has obtained have been wonderful value & so far good experiences. * Each time we do look at the company who will provide the service to understand their normal pricing policy. * Common sense approach of evaluating a purchase before you commit is needed to understand why the offer is being made. * So far we have had several week-end away offers where the package includes bed & breakfast – the hotel hope you will buy an evening meal or the location would be off the normal beaten path or the offer will not include a Saturday? * A variety of different meal vouchers that have provided good value; where the venue is new or not obvious. * “Fingers crossed” were going to Swange for a long week-end; large hotel that probably could not sell it`s bedrooms outside peak times? * My world is that the glass is always half full! * Paying £15 for a good night out still appears cheap without the food?

clint kirk says:

22 March 2012

Although this is not about Groupon, I have a story about a similar group-buying site. I recently bought some goods at a discount using a voucher I bought from a group-buying site. The goods turned out to be faulty. I am left wondering whether my claim under the Sale of Goods Act is with the group site or with the supplier, or both. I wish I hadn’t bothered buying the stuff in the first place and will probably stay away from group-buying sites in the future.

M. says:

I have used Groupon many times, the wife & daughter had a lovely massage & mud bath somewhere in central London on Tuesday.
I have never been let down or have any complaint about any Groupon deal I have purchased.
This is my procedure:
I normally see the offer I want; contact the provider direct; explain I am purchasing via Groupon; ask if the deal is as explained; If all is OK I take the name of the person I talk to and inform them that I will be taking them up on their offer.
If there is any differences between what I am told and what Groupon are offering I inform the business and do not purchase the offer.

Inevitably when I or the person/s I have purchased for arrive at the venue / restaurant or whatever, we are addressed by name or as Ms party and are treated well.
I can only advise by my experience, do not take any offer at face value, do your homework, if you are the kind of person to check beforehand, businesses know you are the kind of person who will gain them referrals.

saralou says:

23 March 2012

I have used Groupon several times over the past year and have only positive feedback to give here. On the few occasions when I have been unable to take advantage of an offer purchased, either because a company is no longer participating in a particular deal or, in the case of a hotel, the rooms were all booked on the dates I requested, Groupon have been tremendously helpful and have credited my account within hours. As previously stated, it is always a good idea to check all the details; surely this is common sense advice which should be followed prior to making any purchase? Thumbs up to Groupon and the service they are providing.

adele rose says:

25 March 2012

I have used Groupon since it started and have nothing bad to say about them. They have always returned my money immediately when I’ve had need to request it and have honoured their obligations. BUT I’ve never looked at the alleged ‘original price’, just looked at what I’m being charged and decided whether it’s good value, at that price, or not. Everything I’ve purchased has turned out to be good value, so I’m still a fan and still buying their deals.

Nimo says:

29 March 2012

I have bought GROUPON few times. On two occassions what we got was reasonable if not quiet right.
On one occasion, in a restaurant we were treated very badly. One of us ordered a cheap meal in the list. Mine was most expensive in the list, but they brought me a cheaper dish, which I returned. My wife finished her food, but I was still waiting for mine. I complained loudly and demanded two free glasses of wine. Eventually I got a better dish than what I had beforeas well as the wines. So I just had it and left. By the way, bread came when there was no food, and when food came there was no bread. This was supposed to be a top table restaurant!