Photo: Flickr via diloz
Groupon customers may be able to receive a share of an $8.5 million settlement resulting from a class-action lawsuit involving expiration dates on the company’s daily deals. Though the details of the settlement are still being worked out, customers who have made purchases from the site in the past are encouraged to learn more about how they could be impacted.
Groupon Lawsuit over Illegal Expiration Dates
Groupon, a popular daily deals site with 34 million active subscribers, has been criticised by customers for their deal’s expiration dates and how the company sells and advertises those promotions.
Over the past few years, a total of 17 Groupon subscribers filed individual lawsuits alleging that the company imposed illegal and undisclosed deal restrictions, such as one stating that the customer “must use gift certificate in one visit.”
According to several suits, this type of restriction violates a number of gift card laws, including a federal law that makes it illegal to sell gift cards that expire in less than five years.
Over time, the 17 Groupon lawsuits were rolled into one that was transferred to a California district court. Last year, a court judge certified the claim as a class action, bringing Groupon’s entire subscriber base into the lawsuit.
Daily Deals Voucher Offered as Settlement Payout
Last month, Groupon settled the case without admitting fault or wrongdoing. As for how the $8.5 million was to be distributed, Groupon was asked to award attorneys’ fees of up to 25 per cent of the settlement cash, totaling more than $2.1 million. An additional $75,000 was earmarked for donation to a civic or nonprofit organisation.
The 17 Groupon subscribers who served as lead plaintiffs in the suit will receive a proposed $500 each with the remaining $6.3 million being split up among subscribers who:
- Purchased at least one deal between Aug. 22, 2010 and Dec. 31, 2011 (separate rules may apply for subscribers in specific states)
- Never redeemed the voucher before the stated expiration date
- Never requested a refund of the unredeemed voucher
According to the lawsuit website (grouponvouchersettlement.com), Groupon subscribers who submit a claim will receive a settlement voucher for that Groupon that can be redeemed up to 130 days from its issue date at the merchant for which the claim was issued.
If the merchant won’t honour the settlement voucher, the customer can then submit a second claim to be eligible for a refund check on what they paid, plus 20 per cent of the deal’s promotional value (the amount that the deal was worth before being discounted).
Groupon customers have been given until July 6 to file a claim if they want to be included in the settlement. The judge who is overseeing the case is planning to hold a hearing on July 20 to decide whether to uphold or reject the deal.
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