Warning! Don’t be blinded by these flash sales

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At first it looked like an unexpected wedding present for Matt Parisi and his wife, Kimberly. The deal-of-the-day site LivingSocial was offering a week at an all-inclusive resort on the pricey Caribbean island of St. Maarten for just $1,658.

But it proved to be no gift. Shortly before he left for his honeymoon in the fall, Parisi, an engineer from Marlton, N.J., learned that the resort was closed for the season and that his reservation had been transferred to a full-service hotel on St. Maarten.

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“The new hotel was not an all-inclusive,” he says. “We were completely caught off guard and very disappointed. We had intentionally planned an all-inclusive to avoid worrying about any additional expenses for food and beverage at the resort on our honeymoon — especially after paying off our wedding only days before.”

His disappointment deepened as the week progressed. It turned out that the resort hadn’t just failed to make arrangements to transfer his “all-inclusive” status. Parisi was forced to pay for his room over again, setting him back another $2,138. He protested, pointing out that he’d already paid LivingSocial, but a hotel representative said that the all-inclusive resort had failed to pay its bill when it transferred the reservation. Parisi was told he was ultimately responsible.

When Parisi checked with LivingSocial, it claimed to be just the middleman. “They did everything in their power to avoid any involvement in this situation,” he says.

Weeks ago, I wrote about the explosion of “flash” sales offered by airlines and hotels. But some of the biggest and best offerings can be found on sites such as LivingSocial and Groupon. These limited-time offers, which aggressively discount everything from tours to resort stays, come with their own set of problems and solutions. It helps to know them before booking.

LivingSocial says that it isn’t entirely clear what happened to Parisi and his wife or why their all-inclusive package fell through, but it promised to investigate. “The ball was clearly dropped here,” says Elizabeth Hebda, a LivingSocial spokeswoman.

It’s hard to miss LivingSocial’s travel product, called Escapes, which according to general manager Nick Stafford, features about 175 flash-sale offers at any given time. “They represent a select, curated group of great travel experiences to buy at a discount and are generally available to consumers for a window of two weeks,” he says.

LivingSocial also features a selection of about 1,000 properties and high-demand destinations on an ongoing basis. Travel is a significant portion of LivingSocial’s empire: Escapes accounts for up to 25 percent of its business in Europe and 15 percent of its U.S. sales.

What about your rights as a consumer? In some respects, LivingSocial’s vouchers are more flexible than a traditional travel product. About 90 percent of its travel vouchers are dateless, meaning that you contact the resort to make a reservation for whenever you choose. The company also offers a 30-day refund on the purchases, no questions asked. But the fine print in its contract is clear: It offers no warranties of any kind for its services.

Groupon, another popular site for flash sales, works similarly. It runs “hundreds” of limited-time offers every week, according to Simon Goodall, the site’s general manager of travel. As with LivingSocial, that category is a big business. On Groupon, travel accounted for $696 million in sales last year.

Average discounts on its flash sales are between 15 and 60 percent, and Groupon also offers what it calls “Market Picks” — select hotels in each market offered at a rate comparable to that of an online travel agency, but with a 5 percent rebate in Groupon credits, called “Groupon Bucks.”

Groupon does have a warranty, called the Groupon Promise. It says that if you take a Getaways trip and are disappointed with your experience, “we’ll work with you to make it right or give you a refund.” However, Groupon also has disclaimers similar to LivingSocial’s, limiting its liability, and it’s unclear how matters are reconciled in the event of a conflict. (No one has complained directly to me about a Groupon trip, so I have yet to find out.)

As a practical matter, most of the trips purchased through the major flash-sale sites are relatively problem-free, according to an unscientific survey of my readers.

Lauren Schaal booked a recent vacation in Cancun, Mexico, through Groupon. The package included all meals and drinks and some water activities. “The experience was definitely better than we expected,” says Schaal, a marketing coordinator from Arlington Heights, Ill. “Everyone at the hotel was really nice and accommodating, and the hotel was really clean. I would definitely book another Groupon or LivingSocial vacation again.”

But Schaal recommends doing your homework before booking. Carefully read the online reviews before buying a voucher, which is great advice for any travel purchase. But it’s not foolproof. No one could have known, for example, that Parisi’s all-inclusive resort would transfer his honeymoon reservation and then default on the payment to his new hotel. Sometimes, these things just happen.

If you ever run into a problem with a deal-of-the day site, at least in travel, it’s best to invoke its service promises and guarantees, such as they are. The site may be correct, legally speaking, in telling you that it has no obligation to help you, but it probably isn’t right in doing that.

After I contacted LivingSocial on Parisi’s behalf, the company severed its relationship with the resort where the couple was supposed to honeymoon. It also created a policy guaranteeing that if a hotel can no longer provide accommodations, LivingSocial will ensure that the substitute property matches the Escapes package as it was purchased.

LivingSocial refunded Parisi’s $2,138 and offered him a $250 credit “as an added apology for the troublesome experience.”

Are deal-of-the-day sites a reliable place to book travel?

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32 thoughts on “Warning! Don’t be blinded by these flash sales

  1. The poll question really depends on how you define reliable, anything and everything is “reliable” until it isn’t. What level of risk are you willing to accept?

    In this case the moment my vacation had been transferred, i’d be on the phone to the company to get my money back, and if necessary dispute the charge on my credit card. I bought “A” the company didn’t deliver.

  2. Chris, both Groupon and Living Social are #BBB accredited businesses with an excellent record of handling and resolving complaints filed with Better Business Bureau. If any of your readers have difficulties with vacation vouchers, please have them file a complaint at bbb.org and we will assist them.

    Katherine Hutt
    Council of Better Business Bureaus

      1. Donna, businesses that have a good rating, commit to our Standards for Trust and have been accepted for BBB Accreditation do, indeed, pay dues. This enables us to provide our services and information free to consumers.

        1. Many of the businesses that illegally leave flyers at my door claim to be “BBB” Members. Ethics are obviously not a prerequisite.

    1. Katherine, with all due respect, a good BBB rating means absolutely nothing – sorry. BBB was no help at all in my horrible experience with a travel agency.

    2. Since companies have to pay dues to belong to BBB and can use the clout of leaving if negative information about a company is disseminated, BBB ratings are far from reliable. I have much faith in organization like Consumers Union, publishers of Consumer Reports, which accepts no remuneration from companies and conducts extensive tests on products and services that they rate. A BBB rating is worthless.

      1. Jim, BBB revokes accreditation all the time if businesses won’t cooperate in handling complaints. Consumer Reports has given BBB positive coverage a number of times. We recommend that people use CR to find the product they want to buy and use BBB for figure out the best place to buy it.

        1. The more I talk to business people, the more negative comments I hear about BBB.
          It seems that BBB while carrying a decent reputation as a source to learn about member businesses, it also becoming a place for people to whine and complain.
          The bottom line is this….People are becoming more and more high maintenance and are demanding more and willing to pay less.
          For example, customers who ALWAYS try to not pay full price. And when the vendor states he expects full payment for his work, the customer makes a complaint to BBB.
          That’s a bunch of nonsense.

    3. You would be the same Katherine Hutt in this March 19, 2013 Time magazine article: http://business dot time dot com/2013/03/19/why-the-better-business-bureau-should-give-itself-a-bad-grade/ correct?

      My experience with the BBB is the same as others who have replied to you: if the company pays you money for accreditation, they’ve now acquired a Teflon seal with which to deflect customer complaints. That’s been my personal experience and the Time article is a good summary as to why BBB is not trustworthy.

      1. No amount of BBB perfume will remove this stench:

        It turned out that the resort hadn’t just failed to make arrangements to
        transfer his “all-inclusive” status. Parisi was forced to pay for his
        room over again, setting him back another $2,138. He protested, pointing
        out that he’d already paid LivingSocial, but a hotel representative
        said that the all-inclusive resort had failed to pay its bill when it
        transferred the reservation.

      2. Jeanne, the Time article was related to the former BBB in LA, which was expelled from BBB for failure to meet standards. A difficult chapter in our 100+ year history, but one that is behind us.

        1. That article did address the closure of the Southland BBB, but pointed out that the general climate and operating principles of the BBB are antithetical to the actual consumer and that Southland wasn’t alone.

          My personal experiences, and those of my fellow commenters, reinforce my very low opinion of the BBB in general. If you care to respond to the rest of the article’s points, that would be a better promotion of the organization itself than your reply to me.

    4. Ugh. BBB makes me vomit. Filing a BBB complaint is the absolute pinnacle of useless. Does anyone except really, really old people even think the BBB is remotely trustworthy?

    5. The BBB can’t do a thing to help someone with a complaint. All one needs to do is respond and you guys say it was resolved, whether it was or not. Because these companies pay to belong, you aren’t “unbiased” and have absolutely no power to get a resolution that is acceptable to a complainant.

      1. Actually as the compliance officer for our company I respond to the BBB complaints, and one, they will mediate regardless of whether the business is a member or not, and two, even if your business is a member, they calculate your record exactly the same.

        1. Annie, there are thousands of people like William at businesses around the country who are responsible for responding to consumer complaints filed through BBB. You are right that we cannot force a company to resolve a complaint but, if they do not, they cannot keep a good grade or BBB Accreditation.

          1. As Annie pointed out, there is no “resolution” at all. If the company responds at all, BBB is satisfied. Period. Useless, useless organization.

          2. Well what about the companies that respond, have multiple complaints and still a A rating? These complaints may not be resolved to the satisfaction of the consumer – but when I see mutliple complaints and an A rating, I totally disregard the BBB. And so do other smart consumers. There is nothing fair or even logical about how you grade. All a company has to do is respond and that counts as a point for them.

  3. Glad to hear LivingSocial did the right thing. I am a big fan of theirs and Groupon but have never purchased any travel deals through them. That may change knowing they stand behind their deals of the day.

    1. Pushing back and being a whole pile of uselessness until Chris gets involved hardly qualifies as “standing behind” their deals.

      1. Maybe, but I’m not convinced he did everything he could before involving Chris. I’m sure you’re right though, isn’t that what you want to hear? Thank you for clearing this up for me.

  4. Maybe a coupon for a local restaurant or site. But for a foreign trip or vacation? You’ve gotta be crazy 🙂

  5. We’ve all heard it once…. twice…. many times; over and
    over again:

    If it seems too good to be true, it probably is.

  6. At least they had a room to sleep in. Why people fall for this stuff is incomprehensible, other than greed and ignorance of course.

  7. Here’s where we need some good old-fashioned regulation.

    If you’re a third-party offering these kinds of deals, the law ought to make the third party liable to the consumer for fulfillment of the contract. If I buy a vacation package from Living Social or Groupon or Travelocity or BrickAndMortarTravel, my contract ought to be recognized as with THAT entity – and enforceable. Then maybe the travel companies would stop accepting marginal and borderline operators who can’t deliver.

    Closed for the season? You can’t tell me Living Social couldn’t have found out the dates of operation before offering that deal, and blocked bookings outside that window. That’s what ordinary businesses call due diligence.

    Regretfully, in this country thanks to “tort reform” and idiots who complain about “greedy trial lawyers” we’re fast heading to a place where companies can take your money and not deliver anything – and be perfectly justified in doing so, with no recourse under the law.

  8. ABC News did an expose of one of these deals. As soon as they said the name of the resort, I knew EXACTLY what they were going to find. You MUST do your homework before you book! I met a woman in one of the most remote resorts I had ever been to that booked a Groupon deal for that hotel. No air conditioning and it was so far out of the way there was nothing to do unless you booked high priced excursions. The woman was bitterly disappointed.

    You get what you pay for most of the time.

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