Why Did This Deal Voucher Company Abruptly Shut Down?

Startups like Groupon and LivingSocial get all of the attention these days in the deal-certificate market, but Utah-based CityDeal predated deal-a-day sites and sold discount vouchers for all sorts of businesses in the western US. Until the company abruptly shut down yesterday, leaving merchants and customers alike confused and possibly screwed over.

Early Wednesday, the company’s site abruptly shut down, and no one will tell the media, customers, or merchants what happened. The Salt Lake Tribune reports that a deal to sell the company fell through, leading to yesterday’s shutdown and refusal to communicate with the public.

CityDeals vouchers operated on the now-familiar system where the company sells certificates for $5 that’s worth $10 at store X, and the store gets $2.50 out of the deal. The company shutting down makes this a bad deal for everyone. Some merchants report that they haven’t been paid yet, and some have stopped accepting CityDeals certificates altogether.

CityDeals shuts down, leaving users, merchants hanging [Salt Lake Tribune]