As Groupon continues to expand across the country into more and more markets, consumers are finding they’re not quite sure how to deal with this new beast when it comes to state laws governing coupons and gift certificates.
Consumerist reader James M. wrote in to bring up that in some states, gift cards and certificates can’t actually expire, even if, as with most Groupons, there is an expiration date written on them. He wants to know, “Do Groupons (and similar offers) fall under this clause?”
We reached out to a Groupon rep, who provided their guidelines regarding expiration dates:
Law doesn’t really specify if Groupon is a gift card or a coupon. Gift card law is more stringent, so that’s what we adhere to. A Groupon is good until its expiration date; at that time, the merchant will still have to honor what you PAID (NOT face value), for five years or in accordance with state law. It’s five years in Illinois, and that’s the most strict in the country, so that’s what we ask merchants to abide by.Â
So if I spend $20 to buy a $40 Groupon for one dozen roses at Flower Shop, when it expires the merchant owes me a $20 credit to their store. They don’t have to give it to me in one dozen roses, but they do have to give me a credit (not cash) for what I paid.
The rep adds that if for some reason there’s a redemption problem with a Groupon on the merchant end or if they let you down, Groupon will provide a refund or site credit.
As far as other deals go, it’s always a good idea to call the company or check out their site and ask what their expiration policy is. For a handy site to look up gift card laws by state, check out this list.
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is Illinois the most strict in the country? I thought that gift cards couldn’t expire in California.
They can’t in Washington (unless they meet some pretty strict requirements)
Sounds like Groupon is trying to do the right thing.
Gift card laws by state:
http://www.consumersunion.org/pub/core_financial_services/003889.html
Doesn’t mention Colorado. Guess I better Google it.
Hmm, interesting. We had a groupon that expired a month ago. Would be nice if we could still use it for something, I don’t mind paying the difference, either.
You can walk into the merchant and they will honor the value you paid.
You’ve lost the Groupon discount, but the cash you put in is yours to spend.
Try reading the second paragraph in the reps response.
I was under the impression that paper certificates were valid up until the date, and plastic gift cards were the exception to the rule. There are some companies (Target comes to mind) that don’t expire.
My guess is that they’d argue that they are a coupon (hence the name) that is subject to expiration. Normally, you don’t pay for a coupon, but I’m not sure there’s any law against that. Also, retailers often will provide a coupon for a future purchase if you buy something from them, I view that as analogous.
It says in the post here that Groupon adheres to Gift Card legislation. Call me paranoid, but I’d venture to guess that they consider their product gift cards.
Just sayin’.
I think by “they” the OP is referring to the store you’re trying to redeem the offer from. Groupon can say whatever it wants as policy, but it’s up to the store to adhere to the policy.
Right, but then Groupon added that if the merchant refused Groupon would provide a refund or site credit. And I’m not sure what “they” you are referring to but if its the quote itself it states that that is from a “Groupon rep” so no, not the store itself.
Well, they do both. It’s a coupon until it expires, and then a gift card afterward. Why? Well, you get (e.g.) $50 worth of spa treatments for $25, so it’s like a coupon. When it expires, it’s still worth $25 at the spa, like a gift card.
I wonder when gift card laws will be adapted to account for Groupons and the like? It seems inevitable that this will need to be addressed legally.
I don’t doubt it. Of course, Groupon seems to be more or less on the consumer side on this one, so even if the laws do adapt to group discount sites such as this, they seem like they’ll still endeavor to honor them, or at least get you some kind of credit.
It actually seems like Groupon is handling the legalities of the situation pretty fairly. They are very up-front about the expiration dates in the offers (they vary from merchant to merchant, sometimes it’s just a couple of months and sometimes it’s a year – I guess the merchant could choose not to have it expire at all?). And so, forcing the merchant to honor the price you paid for the deal in the form of a credit for whatever products or services you want seems very fair if it’s past the expiration date. It sounds like Groupon has a handle on the legal issues, but I wonder about the other similar outfits and how they are handling it. If they aren’t doing as good a job, then there might be a need for Groupon-type-specific language in the laws.
I agree with how Groupon is handling it, but I can see the potential for a dispute where a Groupon holder tries to hold the merchant accountable for the deal as opposed to the amount of purchase and invokes the “gift cards don’t inspire” rule to make the case. A Groupon holder might try to take the merchant and/or Groupon to court to try to enforce the terms of the original deal
Gift cards aren’t discount cards. Groupon is a discount card – we will give you 50% off if you buy within a certain time frame.
But you have to pay a certian amount up front, which makes that part like a gift card. You’re paying in advance for a product or service from a certian vender.
And you get to keep that part. It’s the discount part you lose if you wait too long.
Next in line, the states will be demanding any unfulfilled Groupons as unclaimed money.
I think the stated interpretation is fair. A buyer will not lose money, just extra value.
In that example the merchant split the $20 with Groupon, so they actually only have $10 of your money.
I agree with SG-cleve…the business only gets 1/2 of the sale price plus pays the CC processing fees…..Groupon nevers says that to the businesses when they sign you up about having to take them after expiration date, they are pretty full of it if you ask me…If I buy something and I let it expire even after they notify me 3-4 times to use it, then I lose it plain and simple it is done my fault….very simple especially if I had 6-12 months to use it. If a business took them after the expiration date I would expect them to honor the purchase price minus commissions paid to Groupon….let Groupon honor the other amount back into your or my account for future purchases…I bet we would see their tune change then if it started costing them…lol