One of the key rules of using group buying sites (and, indeed, any coupons or discounts) is to pay attention to the fine print. Alex and his wife thought they did. The LivingSocial adventure he purchased for her birthday, a kayak tour, required 24 hours’ notice for a refund. What that fine print didn’t mention was that if you were too sick for an adventure on the day of the event, you wouldn’t be able to reschedule to a different date. That’s how Alex learned that employees of the group deal site weren’t quite accurate in explaining how payments to the adventure hosts work. According to the local paddling center owners, they would only get a couple of bucks if the couple canceled…but LivingSocial would still keep the entire fee.

Recently for my wife’s birthday, we purchased a Living Social adventure deal for a tandem kayak tour in our city. The tour consisted of a two hour kayak tour in rented kayaks hosted at a local paddling center followed by a dockside cup of chowder, hot chocolate and cookies at the end of the trip. The total fee for this deal was $70 for two people.

Unfortunately the day before the tour my wife became sick with a sore throat and nausea. Fine print in the Living Social deal indicated that they would offer a refund up to 24 hours prior to the trip. The morning of the trip it was clear she would be in no condition to go that evening. She called Living Social but the phone rang and rang, she called the paddling center as soon as they opened hoping for some ability to reschedule, or if need be, refund the trip. The paddling center said they would be happy to help but since the deal was booked through Living Social we would need to contact them to see what arrangements would be possible. The paddling center gave us the names of the Living Social adventure coordinators in our city.

We called Living Social and after ten minutes on hold I reached a customer service agent and explained the situation. He informed me that they could not help me since the trip was a booked event and all of the other available dates were already booked. The agent kept saying that he ‘could not help me’. Eventually I asked to be transferred to a supervisor who might be able to help. Again, he repeated that they couldn’t help me but I offered that “to be clear, you could process a refund if you wanted to but you are choosing not to” to which the supervisor responded, “yes, you are correct, to be accurate we could provide you with a refund but we are choosing not to.” The supervisor reiterated what the agent said that the event was booked and already paid for so refunding wasn’t something they were going to do.

Ultimately Living Social offered a $20-$25 ‘social bucks’ credit. I told them that given how inflexible they were being I doubt we were going to use the credit because it would also require us to pay for another deal at another time. I explained that as far as we were concerned we were just out the money we paid so 30 minutes after the call began it ended with us being pretty unhappy.

I called the paddling center again to see if they would be able to help in some way. They said their goal was to get us out on the water and have some fun so they offered to let us come down and if we just showed them the certificate for the Living Social deal they would at least allow us to take a kayak out for a couple of hours another time. They were super nice and very easy to deal with. I mentioned to them that Living Social had indicated that money had to be committed for trip to happen and that was at least part of the reason they couldn’t (wouldn’t) offer a refund. However the paddling center informed me that Living Social only pays them for people who show up, not for cancels or no-shows. The paddling center said they are paid $12.50 for each person that comes on one of the tours and Living Social offers them roughly $2/person that cancels. This means that of the $70 trip, Living Social would have paid the paddling center $25 for the two of us had we shown up which we did not.

Lets think about these numbers for a bit, lets say the chowder, hot chocolate and cookies were roughly $2.50/person. Of the $70 total fee that leaves $65. With the cancellation fee of $4 that takes leaves Living Social with $61. The paddling center said they would be staffed the same regardless of wether anyone showed up. So at the end of the day, because we canceled the paddling center gets $4 and Living Social gets $61.

Thanks Living Social for reinforcing to us the importance of buying locally from people and businesses we know, can trust and who are more focused on developing positive relationships with local customers than Internet based businesses are.

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