Groupon Inc., an online provider of daily e-mails offering deals on everything from restaurants to dance lessons, was sued Tuesday by a Minnesota man who alleges the expiration dates on the company’s discounts are deceptive and illegal.
The lawsuit filed in U.S. District Court in Minneapolis said federal and state laws prohibit companies from selling or issuing gift certificates with expiration dates.
The suit says Chicago-based Groupon and its retail partners issue their daily deals knowing many customers won’t use them before they expire, and “many consumers are left with nothing, despite already having paid for the particular service or product.”
“Accordingly, Groupon and its retail partners reap a substantial windfall from the sale of gift certificates that are not redeemed before expiration,” the lawsuit said.
Groupon spokeswoman Julie Mossler said the company never comments on litigation.
After settling a lawsuit in Chicago last year, the company said in a blog post that when a Groupon gift certificate expires, customers can still redeem it for the amount they paid for it. For example, if a consumer pays $20 for a Groupon that offers $40 worth of food at a restaurant, the customer can still redeem the Groupon for $20 after it expires.
Under Groupon’s terms of service, if a merchant refuses to redeem the voucher for its cash value, the company will either refund the money or give users a Groupon credit.
The lawsuit filed by Brian Zard of Richfield seeks class-action status. It asks for unspecified damages, including full refunds, and a court order preventing Groupon from issuing discounts with expiration dates. It estimates the amount of money at issue is more than $5 million.
Groupon started in 2008 and more than 50 million people signed up to receive its daily e-mails as of January, according to the company’s Web site.
Motion to dismiss – GRANTED. This guy probably spent more on court fees than he did on a Groupon to his local pizza shack.
When did our country’s #1 products become morons and lawyers that file lawsuits on their behalf? These are in essence coupons, not gift certificates. Coupons expire. Can I sue a toilet paper manufacturer because my coupon expired and Target won’t accept it? Plus Groupon sends out annoying e-mails reminding you to use the ones you have already purchased. Barristerbill is right – DISMISSED.
Tort reform needed. You are an underemployed lawyer with a license to fish using the courts system. You lose = you pay the costs incurred to defend against your goofy suit.
Does this mean that I can sue every manufacturer that won’t honor coupons after they expire as well?
Brian Zard, you should have spent the money on changing your last name to Tard.
What a joke. I hope future employers do web searches on people like this and bounce him due to risk of frivolous lawsuits. Groupon is clear when you purchase that they expire.
There is a difference people. Manufacturer coupons are free to the consumer so it is perfectly acceptable for an expiration date.
With Groupons, the consumer is purchasing a discount. While I agree the discount should be permitted to expire, the value originally paid, should be honored, ie… if I pay $20 for $40 worth of stuff, they don’t get to keep my $20 after the expiration date, I just don’t get the additional $20 worth of stuff.
You can’t compare the two.
Observer isn’t very observant. They clearly state that what you want them to do is exactly what they do. If you pay $20 to get $40 and it expires, you still get your $20 worth of whatever good or service you bought.