Groupon Receive a Record Number of Complaints
Groupon is no stranger to negative headlines. Last year for instance it was announced that 70% of small companies hate the site. Light in the dark however could be found by the fact that even if companies didn't really like the site, at least visitors did.
Now however it would appear even customers are turning against the coupon site. GigaOm report that in the last year, Groupon was the subject of a record number of complaints due to the way it markets deals to customers.
An investigation by the Office of Fair Trading (OFT) has resulted in Groupon being told it has to seriously clean up its act. They were informed that they had broken a number of consumer regulations and were given just three months to get their act together or face further sanctions.
“The investigation found widespread examples of Groupon’s practices which in the OFT’s view breached consumer protection regulations,” said the watchdog. ”The OFT has specific concerns over practices involving reference pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants.”
The OFT released a statement today outlining what Groupon will be required to do to prevent falling foul of them again. These include:
- Reference prices (adverts that compare an original reference price against a sale price), including savings, are accurate, honest and transparent.
- Groupon carries out an accurate, honest and realistic assessment of a merchant's ability to provide goods or services in the quantity or time frame suggested.
- Products display clearly, prominently and on the same screen or before purchase all the limitations which apply to any deal.
- Groupon takes reasonable steps to ensure that health or beauty product claims are supported by adequate substantiation.
- Terms and conditions are fair.
- Groupon applies refunds policies and cancellation rights in accordance with the Distance Selling Regulations.
When it was announced that the OFT would be investigating them, Groupon declared that they would cooperate with the investigation. Their managing director Roy Blanga blamed poor processes for the difficulties.
“As a young and innovative business, Groupon acknowledges that our processes and procedures have not always kept pace with our rapid growth,” he told the FT today.
“We have independently made many improvements since early 2011 and have worked transparently and constructively with the OFT to identify areas that require further changes. We take their concerns very seriously and will be willingly implementing the recommended changes.” he continued.