Was LivingSocial’s Big Amazon Deal A Big Bust?

Last week LivingSocial made a major coup with their record selling Amazon Gift Card deal. The offer, a $20 gift card for $10 at the retail giant’s estore was a big hit with more than 1.3 million deals sold in 24 hours for a total take of over $13 million.

Last August Groupon saw similar success with their Gap deal, offering a $50 gift card for $25. The deal reportedly sold 441,000 coupons generating $11 million in sales. 

Clearly LivingSocial takes the lead in this comparison, at least on the surface but from what we hear, these numbers may be deceptive and not a true indication of some final numbers that may be yet to come.


Complaints surrounding the deal and the site in general abound, from canceled orders to unauthorised charges on credit cards and rude LivingSocial representatives accusing apparently innocent customers of fraud. 


SiteJabber.com, a rating and complaints forum where consumers can have their say about their experiences with businesses is currently seeing a parade of dissatisfied LivingSocial customers.


Almost every news story and blog post that allows comments has a small angry mob of consumers leaving angry comments. Apparently LivingSocial is attempting to handle the influx of complaints since they’ve set up a Q &A knowledge base specifically to address the Amazon Gift Card issue.


So how will these complaints affect LivingSocial’s record breaking sale? According to one complaint:


…they didn’t even generate 1/3 of that in sales. Ask them how many of those 1.3 mil orders were canceled…by them.


And yet others:


They may have reported $13M in sales but they’re cancelling 90% of the orders for “fraud”. Will LivingSocial report the true sales when this is all said and done? Probably not.


…canceled as well, their numbers are WAY OFF now.


While these views may be somewhat exaggerated due to anger, they represent a real problem that will test LivingSocial’s chances at becoming the coupon king.


Living Social verus GrouponLiving Social vs. Groupon

Photo: Alexa


Earlier this month Groupon dealt with a similar issue when a deal in one of their Japanese markets went awry. The company not only refunded customers money but gave them a free voucher as well and Andrew Mason went on video with a personal apology. 


In our opinion this latest win by LivingSocial is a dubious one at best. It takes more than one deal with bigger dollar signs to hold the crown. Until we see how they handle the mass of complaints behind the Amazon Gift Card Deal, we really can’t call this a win and as far as we’re concerned Groupon still remains the coupon king.

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