The world’s largest coupon website says it will dish out millions of dollars to settle lawsuits that accused it of duping consumers.
Chicago-based Groupon Inc. has agreed to pay $8.5 million to resolve 17 consolidated lawsuits in which consumers claim the expiration dates on the company’s coupons violate state and federal consumer protection laws, such as the federal Credit Card Accountability Responsibility and Disclosure Act, which forbids the sale of gift cards that expire in fewer than five years.
Plaintiffs in the suits claimed that because Groupon offers its coupons as “daily deals” available for a short amount of time, “consumers therefore feel pressured and are rushed into buying the gift certificates and unwittingly become subject to the onerous sales conditions imposed,” including no cash refunds and a requirement that they use the coupons in one transaction.
The settlement, which San Diego U.S. District Judge Dana Sabraw must approve, covers consumers who purchased Groupon coupons between November 2008 and Dec. 1, 2011. They can redeem the coupons past the expiration dates or recover from the settlement fund. Groupon also has agreed not to sell more than 10 percent of its “daily deals” with expiration dates of fewer than 30 days over the next three years.