Groupon Sued: Lawsuit Says Expiration Dates Are Illegal

Groupon, the Chicago-based daily-deal giant, is getting sued over a deal gone sour in its home town.

Eli Johnson bought a coupon to Whirlyball, a Chicago sports and entertainment complex, last summer, according to the Chicago Sun-Times. But he didn't get a chance to use the discount before it expired two weeks ago, on February 16.

Rather than just taking it as a loss, Johnson decided to take it to court. In his U.S. District Court filing, Johnson cites both federal and state law that prohibit the sale of coupons that expire inside of five years.

Johnson also vented about the company's overall business model in the document:

13. Defendant Groupon's systematic placement of expiration dates on its gift certificates is deceptive and harmful to consumers. Consumers must act quickly to purchase gift certificates--usually within a 24-hour period.

14. As such, consumers, like Plaintiff, feel pressured and are rushed into buying the gift certificates and unwittingly become subject to the onerous sales conditions imposed by Defendants, including illegal expiration terms that are unconscionably short--often just a few months.

15. Defendant Groupon and its retail partners rely and prey on the fact that consumers will often not manage to redeem gift certificates before the limited expiration period.

The suit also names Whirlyball as a defendant, as well as 100 additional "John Doe" defendants -- presumably, other companies that contracted with Groupon.

It's a class-action complaint, meaning that if it moves forward, anyone in a similar position to Johnson's could join the suit. He is seeking unspecified financial damages, as WBEZ reports.

Comments

[daffodile]

02:20 AM on 03/09/2011

I agree with your information lol..{..}eventhough, group buying has become the smartest shopping strategy for customers, especially after the strong hit of the recession when people are looking out for smarter ways to save money in domestic shopping.. by http://grouponclone.contussupport.com/

[maryjane68]

07:10 PM on 04/05/2011

Group coupon is the smartest shopping strategy BUT businesses will not be making money in the long run unless they find a way to identify good customers and block "bad” ones. Grouponers.com, a site offering reviews on customers buying group coupons, but it's under development. We will see...

[Yotta]

11:17 AM on 03/07/2011

Groupon needs to explain why their "deals" (aka gift cards) have expiration dates at all.

[anytimecowboy]

05:40 PM on 03/04/2011

Bottom Feeders that use Groupon???? Why are people that need to save money "bottom feeders"??? You must never have had to save a dime in your life. I am soooo proud of you YOTTA!!!!!!!

[Yotta]

07:33 PM on 03/04/2011

You get what you pay for, Fatty.

[Yotta]

06:29 PM on 03/03/2011

LOL Even the bottom feeders who use Groupon feel cheated.

[RighteousNotRightWing]

05:14 PM on 03/03/2011

I signed up for Groupon, never used it. Looked like a scam to me. I don't know how they raised the money they did.

[Yotta]

06:24 PM on 03/03/2011

They're in bed with Goldman Sachs.

[Chicago Marketing Co]

01:42 AM on 03/03/2011

Is this a new law? this is ridiculous. It make zero sense! http://searchenginemarketingfirmchicago.com

[Billy2]

02:43 PM on 03/03/2011

Effective 1/1/2008

http://www.ilga.gov/legislation/ilcs/documents/081505050K2SS.htm

[noway lv]

12:09 AM on 03/03/2011

While the lawsuit makes sense . . . I never purchase "groupons" if I know I'm not gonna be in need of that particular deal anytime soon (within the week of purchase).

[scaffnet]

11:14 PM on 03/02/2011

Put this uniformed blather aside. It does not matter what any of you think is wrong with this person, or America, or whatever. The legal facts of this case hinge on whether the product being sold by Groupon is a gift certificate or a coupon. And by most common definitions, this is a gift certificate and if the court holds it to be so, then Groupon and its retail partners HAVE TO FOLLOW STATE AND FEDERAL LAW.

Period the end.

[ken hillyer]

12:03 AM on 03/03/2011

Aside from this lawsuit being total BS, I'm surprised more suits like this have not been filed.

Yes, a "voucher" purchase from Groupon legally constitutes a "gift certificate" under most state's and federal law. However, the merchant is only required to honor the PRICE PAID (not the full value of the voucher) until the applicable law governing escheatment permits expiration - at which point the value of the property is generally supposed to be remitted to the state as unclaimed property - not revenue to the business.

The only way this suit (and others like it) hold merit is if Whirlyball and other Jon Doe defendants refuse to honor what the customers paid for their voucher.

[RighteousNotRightWing]

05:15 PM on 03/03/2011

They likely refused citing the expiration date. However, the expiration date is illegal, the Plaintiff claims.

[sk8queen]

10:12 PM on 03/02/2011

Another case of "I lost so Ill just sue no matteat the rules."

[LifeinPictures]

09:48 PM on 03/02/2011

Last week I bought an Entenmann's cake dated 1898.

[BobbyWasabi]

09:36 PM on 03/02/2011

Groupon has already been sued for this type of $hit: http://www.inc.com/news/articles/2010/04/groupon-settles-lawsuit.html

So, if you're a company that wants to do a deal for all the crab legs you can eat for 24 hours, and say you've only got a week to redeem, you're just $hit outta luck when you have to honor these things until 2016.

[Matthew Loria]

08:09 PM on 03/02/2011

This is absurd, its another case of someone looking to profit off of someone elses good idea. Groupon offers to its consumers a way to experience something within that particular city they might not have been able to do before. There business practices are both ethical and innovative. At some point you wish that particular people would take responsibility for their own actions.

[loubque]

08:02 PM on 03/02/2011

If it expires on you it's you're own damn fault. Don't buy unless you intend to use. Simple as that. Maybe people should be a bit more discriminating when purchasing from groupon. Problem averted.

[kenzor]

08:00 PM on 03/02/2011

I was so pissed when I went to redeem my Groupon's and discovered they had expired the day before! If this becomes a class action, I'm joining.

[RighteousNotRightWing]

05:16 PM on 03/03/2011

Please, do. I think this Groupon is just a scam (even if it is well funded).