Scammed by Groupon

Gerhardt

Gerhardt

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Gerhardt
I took an ad out with Groupon earlier this year for a side business I run. When setting it up they required my bank account information so they could direct deposit my portion of the sales, and said that could take a couple of months. For a $40 service they sold it for $22 and were to pay me only $9. Businesses do this kind of thing not for immediate sales, but for repeat business. I sold very little, a trickle here and there and I didn't think much about it.

Yesterday a lady called and said she'd bought a coupon and it occurred to me I'd never been paid by Groupon for any of the prior sales. I called Groupon and was on hold for over half an hour, and when I finally got through to someone she said that to be paid for my services I would need to collect the paper coupons and submit them with the customers' names, addresses and phone numbers...things never told to me when I took out the ad. I just figured they'd pay me as they sold the services, which was why they needed my bank information.

So I asked if they were keeping 100% of the proceeds from the sales. Sure enough. Who knew?
 
bqmassey said:
This wasn't explained in some sort of contract or terms and conditions?
Click to expand...

I've been looking over everything I can find. I see the note saying that it can take a few months to be paid, but so far I see nothing about any requirements on my part so that I get paid.

It's not worth the effort for the little $ they owe me. It's really the principle and deceptive practices. The kicker is...I see that there are still 3 coupons they sold that haven't been redeemed yet. To keep my reputation intact I'll honor those, but it leaves a bad taste.
 
I've been told by friends with their own business who were approached by groupon and its imitators that the service was expensive, but I had no idea they got 60% of an already deeply discounted price.

My recollection as a purchaser of such things once or twice is that after some date certain (60-90-120 days out, depending) the business' obligation is only to honor the face value of the amount paid, not the full value offered (in your case, you'd owe only the customer a $22 credit against $40, not the full $40 service). Even that expired ~1 yr or so beyond the purchase date. As you said, you could honor the coupon as a goodwill builder. At any rate, your T&C document controls.
 
Well typically it's the GROUPON merchants who are doing the scamming. My wife bought a hot air balloon ride with on GROUPON that the operation never would schedule. We finally put enough legal pressure on Groupon to get our credit card charge reversed.

It looks like Groupon is massively screwed up all around.
 
OP, please PM me the details of your deal (e.g. URL for the specific deal). I work at Groupon and can look into this.
 
We used Groupon once, it didn't do much for us, but my wife loves to buy them for stores and restaurants in our area! :D
They charged us 50% of the selling price, we sold $50.00 service coupons for $25.00 and got $12.50 less a credit card fee from Groupon. But we did get paid. Groupon collects the email addresses when they sell the Groupon! :rolleyes:
We won't do it again, but I know some businesses that like it and it seems to work for them. It's not a money maker for the business unless it attracts new customers that continue to spend money or you sell them additional products while they are at the business. :D One of the local restaurants does $50.00 for $25.00 on Groupon, our bill is usually $75-100.00, so they come out OK if we have a Groupon. :D
 
My experience with groupon is 2 years old now, so this is bordering on a useless anecdote, but hey.. the scotch hasn't taken effect yet :D -- when we did it, the arrangement was that we'd be paid in full within 2 months. I think there was a payment at 10 days, another at 30, and a last at 60. (each worth 1/3)

They paid without complaint. Also our "cut" was larger and negotiated up front -- but we also made them a lot of money (in the $60K ballpark), so we were a "known good" offer, and we did it once a year for awhile.

If I recall, the few folks who chose to back out of the deal later on were just comped by groupon and it wasn't deducted from our take in any way.

I imagine things may have changed a bit since then. Our contract was crystal clear about terms, percentages, and dates, and we had access to a sales rep for questions before signing.

We also didn't front any cash for an "ad", so this sounds like a whole different deal.

$0.02
 
schmookeeg said:
I imagine things may have changed a bit since then. Our contract was crystal clear about terms, percentages, and dates, and we had access to a sales rep for questions before signing.
Click to expand...

Things changed a bit, but not that much. Groupon has different payment terms available now. For many deals (especially large ones, like yours at $60K), the scheduled payments model works fine. The other model is pay-on-redemption where payment is scheduled when the merchant marks the vouchers as redeemed. It's silly to wait 60 days for a check for $20. But, it's also silly to get 2000 individual checks if you have a deal that sells $60K!
 
I used groupon quite a bit, and as a consumer I liked it. Got me to try some new things I probably wouldn't have otherwise.

Then they made the brain dead decision to not do business with anyone that sells guns, including the local company that offered self defense classes...

Called groupon and cancelled my account, and haven't bought a thing from them since then.

-Dan
 
dweyant said:
I used groupon quite a bit, and as a consumer I liked it. Got me to try some new things I probably wouldn't have otherwise.

Then they made the brain dead decision to not do business with anyone that sells guns, including the local company that offered self defense classes...

Called groupon and cancelled my account, and haven't bought a thing from them since then.

-Dan
Click to expand...

Thanks for that. I won't be patronizing them.

Regardless of my need to buy or not buy weapons, if they are legal they should be avaliable.
 
Gerhardt said:
I took an ad out with Groupon earlier this year for a side business I run. When setting it up they required my bank account information so they could direct deposit my portion of the sales, and said that could take a couple of months. For a $40 service they sold it for $22 and were to pay me only $9. Businesses do this kind of thing not for immediate sales, but for repeat business. I sold very little, a trickle here and there and I didn't think much about it.

Yesterday a lady called and said she'd bought a coupon and it occurred to me I'd never been paid by Groupon for any of the prior sales. I called Groupon and was on hold for over half an hour, and when I finally got through to someone she said that to be paid for my services I would need to collect the paper coupons and submit them with the customers' names, addresses and phone numbers...things never told to me when I took out the ad. I just figured they'd pay me as they sold the services, which was why they needed my bank information.

So I asked if they were keeping 100% of the proceeds from the sales. Sure enough. Who knew?
Click to expand...

Huh...so people think they get paid by Groupon for what Groupon sells and they get to hang onto whatever doesn't get claimed, when in reality they only get paid for coupons actually claimed, interesting, I did not know that. Considering the 48% cut they take anyway, they could give you your cut of the sales, but they had to get greedy, sad.:(
 
N747JB said:
We used Groupon once, it didn't do much for us, but my wife loves to buy them for stores and restaurants in our area! :D
They charged us 50% of the selling price, we sold $50.00 service coupons for $25.00 and got $12.50 less a credit card fee from Groupon. But we did get paid. Groupon collects the email addresses when they sell the Groupon! :rolleyes:
We won't do it again, but I know some businesses that like it and it seems to work for them. It's not a money maker for the business unless it attracts new customers that continue to spend money or you sell them additional products while they are at the business. :D One of the local restaurants does $50.00 for $25.00 on Groupon, our bill is usually $75-100.00, so they come out OK if we have a Groupon. :D
Click to expand...

I used to laugh, my mom would take in here car to the dealer for service, "Oh, it's going to take them 2 days to change the oil and rotate the tires, but to make up for it they are letting me drive a new one until they're done.":rofl: "Yep mom, they are good guys down there.":lol: (They actually were good guys and treated her well, the owner and GM there knew me since I was 11.) It really is a great sales tactic, I've always wondered what percent conversion rate it gets.
 
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