Groupon Class Action Lawsuit (update: dismissed)

**UPDATE**: We’ve been asked to kill this blog post while we attempt to reach a resolution and put this thing behind us. We didn’t start Groupon so we could spend our time fighting with lawyers, so we’re happy to try and end this and get back to making cool stuff for our customers. We’ll update here when there’s more to report.

In the meantime, I’ll just remind everyone that [it has always been our policy]( to refund customers if for any reason they’re unsatisfied with Groupon.

**UPDATE (4/20/2010)** We’re pleased to report that [the lawsuit that was filed against us]( is being dismissed and we’ve settled with the guy named in the suit. To summarize, the lawsuit took issue with 1) our expiration date policy (which I’ll detail below), and 2) a delivery charge on [this deal]( that wasn’t clear to a customer, who for some reason decided to sue us instead of [calling us for a refund](

#### What happens when a Groupon expires

When a Groupon expires, customers can still redeem for the price they paid for the period of time defined by state law (5 years in Illinois). **This is not new;** it’s been in our terms of service and in every merchant contract since May of 2009 – when we were six months old and launched in two cities.

#### Changes we’re making

The confounding thing about this experience is that we give everyone refunds if they have any issues with their Groupon experience—we don’t need to get sued for it. So to make sure everybody knows that the easiest way to get your money back is not a tedious lawsuit, we’re making a few more changes to make our customer-friendly policies more visible.

1. We’re adding a clause to our terms of service stating that if for any
reason a merchant refuses to honor an expired Groupon still valid under
state law, we will refund that customer (we did that anyway, but now it’s in
the terms of service).
2. We’re adding a checkbox when a customer buys their first Groupon for them
to agree to our terms of service and privacy policy. I’ve always thought
those checkboxes were pretty stupid, but apparently they help you not get

What a crazy and distracting life experience. Getting sued sucks, but if
there’s a silver lining, it was seeing how readily you guys (our customers)
spoke out on our behalf (in the comments of this post, for example). We put an enormous amount of energy into providing
unbelievable customer service (the great irony of this lawsuit is our
[completely open return
policy](, so it means a
lot that you’ve noticed.

Anyway, we’re glad to put this behind us and get back to making Groupon awesome.

  • This is amazingly absurd, given Groupons return policy.

  • This country has bigger issue than whats going on here. Sure lets once again satll the growth of small business owners and consumers that are simply trying to enjoy life at a little discount as well as try something new that they may not have tried before…I ask the real question…why???? did someone get hurt??? Did someone die??? Did someone NOT READ THE FINE PRINT that’s right on the Buy Page????? Ohh that hase to be on Bold 10pt all Cap Font! At least that’s the law in California!

  • Considering most class-action plaintiffs get what amounts to a gift certificate anyway, what would be the point of suing? Class action lawsuits don’t do much more than make class action attorneys a lot of money.

  • I work for a corporate law firm but know some about frivilous law suits. Especially class action suits. This is just a way of the law firm getting free publicity and showing the “average Joe/Jane” that they’re willing to take your case – no matter how silly.

  • I adore you people.
    And will use my Hard Rock Hotel Groupon and Flatwater brunch in Chicago this weekend — power chords and pancakes in your honor.

  • How did Groupon systematically deceive me?

    By luring me in with incredible offers and making me get out there and have new, interesting experiences in the city I call home. I was looking forward to a life of dull monotony and routine and yet your offers were unbeatable. Darn you, Groupon for luring me into tasty eateries, fancy boutiques and unique experiences. Darn you!

  • Their class action is totally stupid. Subscribers are clearly told upfront if an expiration date exists.

  • Go Groupon, Go! Even people too dumb to read the fine print can get a refund, so I don’t understand wtf there is to complain about.
    Don’t let the bastards get you down, Groupon!

  • Is there a lawyer out there who would file a class action lawsuit against Jay Edelson and the Edelson McGuire lawfirm? If so, sign me up. Any other subscribers interested?

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  • Twice I have let a Groupon expire and twice I have not only been able to use it anyway, I was even given a $20 credit to my account in addition for filling out a survey on the experience. One of these expired Groupons, the restaurant gladly took knowing it was expired, and the other was a concert ticket I mistakenly purchased for the wrong date and after having missed the concert, Groupon got the venue to let me in on a later date. Incredible service…this lawsuit is a joke (as everyone knows).

  • Also, I feel as if systematic deception on the part of Edelson McGuire, is potentially reducing the likelihood that Groupon deals will reach the minimum purchases required by discouraging consumers with these bold faced lies. If anyone else feels their savings are being hindered by this frivolous lawsuit, join me in striking back.

  • How about the part where Groupons ads say you get coupons in your email box?

    or the part where they delete posts from their forums that point out issues with a deal?

    Those are deceptive practices.

    Giving a refund doesn’t change the fact that you can’t put an expiration on a gift card.

  • Dan – You’re right, we send a “link” to the groupon… people didn’t like pdf attachments cluttering up their email. You really call the difference between sending an attachment and a link to a download a deceptive practice? We call it a feature.

    We certainly do not delete posts that point out issues with deals – the only time we delete posts is when someone is making personal/off-topic attacks or slandering a business owner. You don’t have to look very hard to find examples of us not deleting posts: In fact, we don’t even delete posts when people accuse us of things that clearly aren’t true… 😉

    Thanks a ton to everyone else for your support, it really means a lot.

    Andrew, founder/ceo

  • What a load of poop! I would like to be included in the class action against the above mentioned lawyer and numbnut that does not know the difference between an AWESOME company and a hole in the wall.
    I have used several Groupons with NO ISSUES! I don’t see these as certificates – they function like coupons that give you a discount like the kind you get to use at a grocery store. This service has helped me still enjoy a lot of great things in this city EVEN on a budget!
    pffffttttt!!!! to the lawsuit

  • Hi Andrew,

    Move for sanctions against Edelson and his law firm for filing a frivolous lawsuit. NB: I just went onto his website. This guy looks like the biggest douchebag out there, and his profile lists his favorite TV character (Ari Gold, no less) and what’s playing on his iPod. Seems like he is running a dating service for himself rather than a law firm!

  • One of my Groupons expired before I could use it. That was my fault. End of story, kids.

  • Oh geez, more crap from lawyers with nothing better to do. Someone asked what the law firm could possibly gain by a class-action suit if the result, even if this WERE to be a valid case, was a measly gift certificate.

    So let’s do some math. Let’s say that these lawyers managed to convince 100,000 Groupon customers to ‘sign up’ for this suit. And let’s make a big leap into assuming that any judge in his right mind would find Groupon was deceptive. If the resulting “award” to each of those 100,000 people was a $20 gift certificate, that’s a total of $2 million.

    The lawyers get 1/3 of that – and $666,666 ain’t nuthin’ to sneeze at. Not to mention all the publicity they’re getting as “champions of the little guy.”

    That’s why they’re doing this.

    I’m a big fan of Andrew and Groupon and all the other young entrepreneurs who have come up with unique and sometimes exciting businesses that are making my life better. The fact that Groupon does this with TRANSPARENCY just makes them so much more worthy of my business, and makes this lawsuit so much more a pile of s$!t.

  • Hi Andrew,

    Thanks for the response.

    You don’t simply send just a link to a coupon.

    You send an offer to buy a gift card, ticket, voucher or whatever you want to call it.

    Getting updates on what’s for sale is not the same as giving someone a coupon.

    No one cares because they still get awesome deals.

    On the deleting posts, I speak from my own experience in posting a question about if there was even time for the merchant to fulfill all the vouchers before they expired.

    Thanks again for the response.

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  • I love Groupon!!! The only trouble I ever had with Groupon was my own fault (I didn’t read the fine print…and was I irritated at Groupon? No, I was irritated at myself. It hurts to have only oneself to blame). In fact, I have, in the past, easily and quickly gotten a refund on a Groupon for an establishment that was temporarily closed. All the info you need is available BEFORE you buy. This seems very much like attorneys searching for publicity to the detriment of all of us happy Groupon users.

  • This is fascinating to me. As a lawyer, I can’t ever recall hearing an organization entertaining the notion of filing a class action lawsuit against itself.

    Groupon has nothing to hide from. This service is amazing. Period. From customer service to the deals you offer, I couldn’t be more impressed.

    I’m sorry that there are lawyers out there that give the rest of us a bad name.

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  • Dear Groupon —

    Is there any way to use “collective action” to shine a bright light on frivolous lawsuits and those who bring them?

    Who are they? Why they are doing it? Have they filed similar suits in the past? What do they gain (or stand to)?

    I am outraged at the potential waste — of our time, legal fees, media time, and ultimately the taxpayers’ expense (our justice system is funded by taxpayer dollars) — generated by those that intentionally abuse the system.

    But if all this could serve a larger purpose – whether by educating the public and/or make it harder for those to abuse our valuable legal system in the future, it could at least create value in the outcome.

    I believe many other Groupon fans would step up to help an organized effort.


    P.S. In the words of others in the legal profession:

    Posted by: MB | Wednesday, March 03, 2010 at 12:39 PM

    I’m a happy Groupon customer and a litigation attorney in Chicago. The lawyer at Edelson McGuire who took on this case and filed this suit must have no conscience, must have no social life, no love for family or friendships and definitely does not have a place in heaven. This type of lawsuit brings nothing but shame on the legal profession and does nothing to further the interests of justice or consumer fairness. I am embarrassed to be a lawyer after reading about this lawsuit. Shame on the lawyer who took on this case and shame on Edelson McGuire. The law firm of Edelson McGuire has clearly fallen onto hard times if it must pursue such a frivolous and mean spirited lawsuit. I cannot think of a bigger humiliation for Edelson McGuire if business has been so bad that it must resort to this type of foolish litigation. Best of luck to Groupon and its owners. I hope this matter is dismissed soon.

    Will S. wrote:
    I’m an attorney and the prevailing thinking is that the Edelman firm is at the rock bottom of the profession. They have attorneys that literally do little else but dream up potential lawsuits against companies with deep pockets. They provide nothing meaningful to society. Don’t know if the plaintiff came to them first or if they set it all up in order to bring this lawsuit but it’s sad. Groupon isn’t the first company to have to defend itself from wrongful litigation.

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  • You know, I’m not so sure what the “open return policy” means and I myself am an attorney. I’m not going to argue that there is something systematic going on to deceive customers, but I use Groupon regularly and often wonder what I’m paying for: the opportunity to use a coupon or a service? Since I’m paying ahead of time, it appears that I am buying a discounted service (i.e. I don’t owe the provider anything when I redeem the Groupon because it’s already paid for). If this is the case, then: 1) the Groupon should never expire because I already paid for the service, or; 2) if I don’t use it by the expiration date, then I should get a refund since I never used the service I paid for.

    This scenario has happened to me once–I inadvertently let a Groupon expire (I tried to schedule the service several times over a matter of months and the place was always booked solid…long story), emailed customer service with the aforementioned argument, and they just said “sorry, but we’re not giving you a refund.” I was much more than annoyed with that response given that I think the honest thing to do would be to say “I hear you. Since we know you never got the service, we would be glad to give you a refund.” Otherwise, Groupon is like paying $20 for the option to buy a pizza, though there’s not necessarily any guarantee of getting a pizza at the end of the day. In fact, if that is the case, as a business owner you would hope that the customer doesn’t redeem the Groupon because you pocket the money and don’t have to provide anything in return–it incentivizes creating ridiculous terms to make redemption less likely.

    Please Mr. Mason, enlighten me as to what exactly you’re selling so that my confusion can be cured. I really want to be one of your happiest customers.

  • you referenced the fact that you’re protected from the suit because merchants are required to honor the amount you actually paid, even after expiration. however you don’t seem to actually say this anywhere on your site, and a friend who just e-mailed you got a response saying that the law varies state by state and it’s up to the merchant. so which is it? is this a law in IL or not?

    815 ILCS 505/2SS seems to exclude gift certificates issued for a food product but not others?

  • I’ve been “getting my Groupon” for a couple of months now and I haven’t seen anything remotely deceptive … all the offers clearly state terms (e.g., quantity limits and expiration dates). So far I am a very satisfied customer. I would, perhaps, go so far as to describe myself as a “Groupon groupie.” I hope this stupid lawsuit just dies of shame and goes away.

  • I’ve had great experiences with Groupon! I read all the fine print which is provided to you before you commit to buy. The restrictions and expiration date is clearly spelled out. I’ve gotten huge discountsfor restaurants that I go to already, and to new places to try. Only problem I had was with a merchant who was offering a wine class. He canceled the class about an hour before it was scheduled. He offered me two classes rather than the one I had purchased, to make it up to me. Long story short, scheduling became and issue, Groupon refunded my purchase asap! I will definitely continue to purchase via Groupon!

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  • Seriously? You guys are the best. When one of the restaurants in our area went out of business before the expiration date of our Groupon coupon…you guys were “johnny on the spot!” with the refund to our account.

    Your customer service is one of the best around and you provide a GREAT product for both the business offering and the consumers purchasing! A Great concept on how a win-win situation really WINS! (Plus you have a great twisted sense of humor that brightens my day!)

    I dare say that you have MANY more supporters who will remain loyal to you…and that is a GREAT accomplishment to achieve in a relatively short amount of time you have been in business. Let the masses speak!!!

    (Oh! and I didn’t know about this blog until today…sweet!)

  • While I may not totally agree with this lawsuit, I don’t really agree with the “If you’re disappointed, you get a refund” policy. Twice I have been told of limitations on a groupon after I have purchased, even though these limitations are nowhere listed on the groupon itself. I read the fine print, and yet I am told I cannot use the groupon in a way that I expected to.

    I believe that there should be a higher standards and more work put into detailing all of the limitations before purchase. I do not want to keep buying groupons to only find out it’s not what I expected and turn around and get a refund. It’s a waste of time on everyone’s part.

    It’s good that they have the refund policy that they do, but please, spend more time making sure the terms of the coupon are explicitly stated before purchase.

  • Hey Caitlin – terribly sorry to hear that. We definitely strive to be as clear as we possibly can, and when we screw up, we’ll do whatever it takes to make it right.

    We can always do better, but we work hard to anticipate potential issues and address them in the fine print of the deal. Sometimes they slip past us – for example, we never used to mention whether a golf cart was included in the price of the groupon when we featured a golf course. We’ve since learned that it’s an important detail, and we always include it now.

    I’ll contact you via email to make sure we get your situation taken care of – thanks for taking the time to write.

  • I love Groupon but nothing is perfect. The value I have received from Groupons far exceeds the few Groupons that I have bought but have expired. I wonder if that Chinese Groupon clone copied the refund policy too. Highly doubtful.

    But as a longtime Groupon user with more than a few expired Groupons which I then deleted from my account I am wondering why the policy(s) of either redeeming expired Groupons for their purchase price or Groupon giving a full refund has not been more prominently featured on the website. You send out expiration notifications why also include these other options as well in the same notification?

    Which raises another question, why do Groupons expire in the first place? We pay our money, the vendor gets our money up front and has the use of it until we show up. What is the harm in waiting to use them, because the longer we wait the more value that unused groupon is to them. Unless there is a bean counter somewhere calculating the windfall of the added value of expired groupons never being used to groupon and the vendor, why not just get rid of the expiration dates and put all this to rest? Besides we all know Groupon doesn’t have bean counters.

  • Sorry you all had to experience that. Glad you’ve worked it out. Some people just looove to sue. Craziness….

  • I just tried to use my Groupons at Berry Chill on State Street and they refused to honor them at any value. They told me they are no longer accepting them. The class action lawsuit has merit. Why put an expiration date on something that you have paid money for? Its not a simple coupon where customer has not paid anything. This is the same as buying a gift certificate, paying the merchant cash, and then they won’t honor the certificate and keep the cash for nothing in return. This is bullshit for Groupon and Berry Chill.

  • Hey Mark,

    Very sorry to hear about this.

    I just sent you an email addressing these concerns.

    If anyone has any similar experiences or further questions about this, please do not hesitate to contact us at .

    We’d be more than happy to help!

    Groupon Customer Support

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  • I’ve asked for a refund and was given a hard time by Groupon. I’m never buying a groupon for online clothing stores again. However, groupons for services and classes have been great.

  • I think all the positive people here as Im sure, will not interested in the business that provides you with the services.

    These small businesses are finding things tough in the market place which is why they give more than 50% away to Groupon.

    Let me point out to all business owners, THIS ISNT THE ANSWER! for your business growth or profit t/o However if you own Gap this may work for you.

    I have tried to offer a no smart arse point of view here, but watch this space as a responce to this I am sure will come if they decide to publish this.

    All the best !


  • We did a Groupon 8 months ago which expired August 24th. So let me get this right Andrew, what you are saying here is that since in the state of California certificates are supposed to NOT ever expire, we need to honor every single Groupon even after expiration, or they get a refund from you? Don’t you think this a blow in the gutt for us small businesses. Sure you guys have the money to fight back but what do we do when someone confronts us about something like this? We’ve gotten numerous hate mails and unfair Yelp reviews even after we extended our deadline for 3 months! So potentially, we can be sued and bad mouthed tainting our reputation?

    P.S. btw, on another note, I have been trying to contact my rep that promised us another Groupon and have not gotten one single email back, I think we’ve sent about 10 emails to him. 😉

  • What customer service? When you email them they don’t respond and when you ring them they have a message saying: “Due to very high demand all lines are currently busy. Please ring back shortly.”

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