Groupon settles coupon expiration date suit
BY SANDRA GUY Business Reporterfirstname.lastname@example.org April 2, 2012 4:48PM
Updated: May 4, 2012 8:11AM
Groupon has agreed to an $8.5 million settlement of lawsuits alleging the Chicago-based daily deal site illegally put expiration dates on its coupons, known as Groupons.
The settlement resolves 16 lawsuits that accused Groupon and certain merchant partners of violating federal and state consumer protection laws.
Groupon, which denied liability in agreeing to settle, applies to people who obtained Groupons between November 2008 and Dec. 1, 2011.
These people may redeem their Groupons past their expiration dates or take the voucher amount from a settlement fund.
Groupon also agreed to offer no more than 10 percent of its deals with expiration dates of 30 days or less, except in certain categories such as time-limited and ticketed events.
Andra Greene, an attorney with Irell & Manella law firm in California, said Monday that such lawsuits are common when a company that operates nationwide fails to pay attention to the wide variety of coupon and gift-card expiration-date laws, which differ from state to state.
In the Chicago area, Eli R. Johnson filed a federal lawsuit in late February 2011 alleging he purchased a gift certificate on Aug. 15, 2010, to WhirlyBall through Groupon with an illegally deceptive expiration date, according to the filing in U.S. District Court. The certificate was good for 30 minutes of play for up to 10 people for $55.
Groupon offers “Daily Deals” coupons through its website that do not become valid until a certain number of consumers accept the offer. The coupons are purchased through Groupon and offer a significant discount off a given retailer’s regular price for an item or service.
Groupon and the retail partners responded in the legal filing in Chicago that the gift certificates expire within months. Johnson’s suit claimed the Credit Card Accountability Responsibility and Disclosure Act prohibits the sale of gift certificates with expiration dates of less than five years. The suit claimed the WhirlyBall gift certificate had an expiration date of Feb. 16 and did not list an issuance date.
Illinois law generally requires that gift certificates — and coupons fall within that definition — not expire for five years.