A merchant wants me to get a refund from Groupon and pay him directly

When Doreen Shoba tried to use her Groupon, she found that the merchant wouldn’t honor it. And her attempts to self-advocate her case have failed. Now Shoba wants us to advocate for her — but with the wrong party.

Shoba’s case is a reminder to consumers to read the fine print in any contract extremely carefully before accepting the terms. Otherwise, like Shoba, they may find themselves at the mercy of companies that exploit contract provisions to avoid otherwise-binding obligations.

Shoba purchased a Groupon for Skyline Cleaning Services in Newark, N.J. But when she tried to use it, she was told that the Groupon was valid only within a 25-mile radius.

She then contacted the owner of Skyline Cleaning Services, who told her that her address is outside the service area covered by the Groupon, and that he was willing to offer her the cleaning service she had purchased at the same price she had paid Groupon. But she would have to seek a refund from Groupon for the payment she had already sent.

Shoba then tried to contact Groupon at the “Customer Service” toll-free number listed on its website, only to receive a message that the number is no longer in service. The message also directed callers to contact Groupon through its customer support page. But three attempts by Shoba to seek help through the website proved unsuccessful.

She next tried to call and fax a letter to two executives of Groupon, Andrew Mason and CEO Richard Williams, but could not reach them. Having no success at reaching anyone at Groupon, she then contacted our advocates. (Executive contact information for Groupon can be found on our website.)

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Shoba told our advocates: “Your response is the first I have received, and I thank you for that.”

Unfortunately, our response wasn’t what she wanted to hear.

We told her that this is a case we didn’t think we could successfully advocate for her.

First, we felt that she didn’t have a case against Groupon. Its terms of use contain the following disclaimer:

You are solely responsible for your interactions with Merchants and other users of the Site. To the extent permitted under applicable laws, you hereby release Groupon from any and all claims or liability related to any product or service of a Merchant, regardless of whether such product or service is a Merchant Offering available through the Site, any action or inaction by a Merchant, including, without limitation, but not limited to any harm caused to you by action or inaction of a Merchant, a Merchant’s failure to comply with applicable law and/or failure to abide by the terms of a Merchant Offering or any other product or service purchased or obtained by you from the Merchant, and any conduct, speech or User Content, whether online or offline, of any other third-party.

So Groupon accepts no responsibility for the refusal of third-party merchants to honor promises made in offers purchased by customers such as Shoba.

In addition, Shoba told us that she didn’t read the fine print of her Groupon, which contains the 25-mile service area limitation, and that all of her communications with the merchant were by telephone. She has no documentation of those communications.

We generally can’t assist consumers who want more than they are entitled to. Because Shoba lives outside the service area, which was listed in the fine print of her Groupon which she didn’t read, she doesn’t have a case against Groupon. It also doesn’t help that she contacted the CEO of Groupon directly before first trying lower-ranking executives.

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We advised Shoba that she might have a case against the merchant, who wanted Shoba to pay him in advance for his services at the same rate as the Groupon she purchased, and then seek a refund from Groupon. This is a position that, to us, isn’t kosher. Our advocate offered to contact the merchant and ask him to honor the Groupon, because we feel that he should not be receiving the benefits of Groupon (bringing in new customers) while not paying Groupon for them.

But Shoba decided to drop the matter altogether and accept a loss of her payment to Groupon.
We’re no longer involved in her case. But we’re asking our readers:

Should Doreen Shoba have attempted to pursue a refund from the merchant?

View Results

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Jennifer Finger

Jennifer is the founder of KeenReader, an Internet-based freelance editing operation, as well as a certified public accountant. She is a senior writer for Elliott.org.

  • sirwired

    I don’t see how the quoted Groupon terms of use are relevant. That’s language releasing Groupon from liability if, say, you get maimed on a rafting trip you bought through Groupon.

    In this case, she purchased a voucher that wasn’t valid for her needs, nothing more, nothing less. Groupon does not owe her a refund because the merchant is simply refusing to do something the voucher doesn’t require him to do. It’s no different from neither Expedia nor an airline issuing a refund because you bought airline tickets for Rochester NY, instead of Rochester MN.

    I can’t blame the merchant here either; he (understandably) doesn’t want to pay Groupon’s 50% cut for the wrong service area.

    Groupon most certainly will issue a refund if, for instance, the merchant goes out of business.

  • Steve Rabin

    I have found Groupon to be very accommodating when an error or problem arises. But they do warn you to read the terms of the Groupon before buying, and the 25 mile radius limit is in there (and this makes sense for a cleaning service–they don’t want to travel 100 miles to clean a house). In this case, Groupon is in the clear, as is the merchant…the purchaser wasn’t living up to her end of the bargain by insisting the merchant exceed the limits of the Groupon.

    And a question: why is the American Airlines logo on the vacuum cleaner? It isn’t AA’s fault (for a change :-)

  • DReid

    It was the purchaser’s obligation to read the fine print. Years ago I saw a Groupon for roof cleaning within a nearby metro area, I called the company up before ever buying the Groupon deal to see if they would consider coming to my place if I payed an extra travel charge. It was a win-win. They agreed on an additional travel charge, so I bought the Groupon deal and the service was provided.

    The bottom line is to be a good consumer and know what you’re signing up for!

  • greg watson

    I am quite surprised………………..any Groupon that I have purchased & not used within the required time frame………………..will become a credit in my Groupon account.

  • redragtopstl

    Most Groupon, LivingSocial, etc. offers I have seen like this (i.e., offer services only within a stated mileage radius) have a link to enter your zip code, so you can check eligibility before you click “buy.” Perhaps the OP missed that.

  • LeeAnneClark

    The right thing happened here. I almost always side with the customer, but in this case it’s clear the customer didn’t read the conditions. I’m not a fan of “fine print” restrictions, but with a Groupon, they are often such good deals that there HAVE to be some pretty serious limits. There’s almost always some important details in the fine print of Groupons such that you really need to read the whole thing.

    On a side note – I don’t understand the poll. Was she asking for a refund from the MERCHANT? Or Groupon? Seems to me if she wanted a refund, she would have had to get it from Groupon, right? Until you use your Groupon, I don’t believe the merchant has received any money, have they?

  • Extramail

    I recently purchased a groupon for a service and, after purchase, discovered that there was one phone number to call if you purchased a groupon and a different number listed for the business. I called the groupon number and was told it would be six weeks before the service could be performed. I called the business number and was told they could get me in in the next week. I understand wanting to take care of your regular customers but you won’t get me as a regular customer if I have to wait six weeks. I contacted Groupon and explained the situation. Groupon wouldn’t give me a refund because it was after their 24 hour cancellation window but they would give me a credit that I could use on another groupon if I purchased that new groupon within 24 hours. (Don’t understand why it had to be within 24 hours but whatever). Not entirely satisfactory but at least I didn’t have to do business with someone who didn’t really seem to want my business but I also didn’t have to throw away the money already spent. Bottom line, I only check groupon if there is something I want to purchase to see if groupon has a discount just like I check to see if there is a coupon out there. I rarely do business with Groupon anymore because their fine print has gotten a little too fine for me.

  • cscasi

    Never miss a chance for a shot across the bow of American Airlines;even though it had nothing to do with this.

  • mmbNaples

    I just assumed that the ‘merchant’ was Groupon, even if it is a very clumsily use.

  • LeeAnneClark

    Good point. I hadn’t considered that.

  • pauletteb

    Interesting. I tried to purchase a Groupon for a cleaning service, but I live outside the service company’s area. I got an “out of area” message after I entered my zip code, and the sale didn’t go through.

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