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Groupon Settles Lawsuit Over Expiration Dates + How to Use Expired Groupons

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Wed, Apr 4, 2012 at 6:56 AM
click to enlarge Groupon - SCREENSHOT OF GROUPON'S WEBSITE
  • Screenshot of Groupon's website
  • Groupon

Bought a $20 Groupon for $40 worth of cupcakes sometime over the last year or so, then promptly forgot all about it before the Groupon expired? Well, you can have your cake and eat it too: Reuters reports that the online deal company just agreed to an $8.5 million settlement in a nationwide class action lawsuit over the legality of some of its terms and conditions, including the expiration dates on its deals. If approved, Groupons purchased between November 2008 and December 1, 2011 will be fully honored, or you may be able to receive a refund from the $8.5 million settlement fund.

The lawsuit consolidates 17 class action lawsuits filed against the company, all of which accuse Groupon of violating various state and federal consumer protection laws. In particular, the lawsuit alleges that Groupons are essentially gift cards and thus subject to the federal Credit Card Accountability Responsibility and Disclosure Act, which requires such cards to be valid for at least 5 years (California's consumer protection law is even tougher: it prohibits most gift cards from ever expiring).

The suit also argues that the limited time frame to purchase Groupons pressures consumers into buying into the deals; thus, the consumers "unwittingly become subject to the onerous sales conditions imposed." These "onerous sales conditions" include the expiration dates and requirements that Groupons be used in just one transaction.

According to Reuters, Groupon "denied liability in agreeing to settle." Nonetheless, as part of the settlement, the company also agreed "not to sell more than 10 percent of its daily deals with expiration dates of fewer than 30 days" for the next three years.

As for your future Groupon-buying binges, it may be helpful to know that your Groupons won't ever expire in the sense that they always can be redeemed for at least the price you paid for them. And this is true without having to split hairs over whether Groupons are gift cards and should be regulated as such: as the company tells Gizmodo, Groupons are "valid for the purchase price post-expiry," which is "not a new policy, nor was it dictated by the settlement." Indeed, if you go to your account now and pull up your list of expired Groupons, you'll see a message stating, "Your Groupon has expired, but you can still redeem for the purchase value...(which never expires)." The details are further spelled out in its Terms of Sale (emphasis ours):

Vouchers have two separate values: (a) the "amount paid" and (b) the promotional value. The "promotional value" is the additional value beyond the amount paid. Together, the amount paid and the promotional value equals the "full offer value" of the voucher. For example, if you pay $20 for a voucher that gets you $50 of goods or services from a Merchant, the full offer value is $50, the amount paid is $20 (this amount does not expire until it is used or is refunded), and the promotional value is $30 (this amount expires on the date stated on the voucher unless expiration of the promotional value is prohibited by law).

(Whether California's laws prohibit the expiration of the Groupon's "promotional value" is arguable. You are, of course, more than welcome to make the pitch to the business for whom you bought your presently expired Groupon. Or to your lawyer, for that matter.) If all else fails, you can always seek a refund directly from Groupon:

If a Merchant or venue refuses to honor any voucher, Groupon will refund the amount paid upon request in the original form of payment, or will credit the Groupon account of the purchaser with an equivalent number of Groupon "Bucks" for future purchases on the Site.

Now that you know your rights, you can buy $10 for $20 worth of BBQ at Smoke Star BBQ, or pony up $1,199 for an "upper or lower eyelid lift for both eyes" (a significant savings from its regular price of $3,500) and rest assured that if you have so many things going on that you forget all about your eyelids, all is not lost. Monetarily, anyway.

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