Save, make, understand money

Household Bills

Groupon forced to improve refund policy

Emma Lunn
Written By:
Emma Lunn

Deals website Groupon has been ordered by the Competition and Markets Authority (CMA) to refund customers where relevant and improve its customer service.

The regulator has secured commitments from Groupon to improve customer service, ensure accuracy of descriptions on its website, and offer refunds to certain customers who were previously not offered refunds.

The move follows an investigation by the CMA launched in April which found that the discount site didn’t always provide customers with the refunds and other forms of redress, such as replacement items, they were legally entitled to. In some cases, customers were only offered Groupon credits instead of refunds.

On 9 August, the CMA wrote to Groupon outlining its specific concerns about Groupon’s compliance with consumer protection law and warning that if Groupon didn’t change its conduct it could face court action.

The CMA was concerned that Groupon was not responding satisfactorily to customer complaints and was not always providing customers with the refunds and other forms of redress, such as replacement items, to which the CMA considers they were legally entitled.

The CMA also had concerns that the company was failing to ensure the accuracy of product descriptions, that products offered for sale were in stock and delivered within advertised timeframes, and that items were of a satisfactory quality.

Groupon has now signed formal commitments to the CMA that it will ensure that certain customers who were previously not given the option of refunds will be offered refunds within the next seven days and paid within 14 days of their response.

This includes customers who didn’t receive delivery of their goods, customers whose goods were not of satisfactory quality or did not match advertised descriptions, and customers who were unable to redeem vouchers for services.

A banner will be placed on the Groupon homepage for the next 60 days outlining details on the availability of refunds

The CMA also told Groupon that any future complaints from customers must be acknowledged within 24 hours and dealt with within 14 days. It also said that descriptions of goods and services on the Groupon website and app should be accurate.

The commitments Groupon has agreed to also include the setting up of a new team to investigate deals when a certain number of customers get in touch with Groupon about their purchase. The CMA also said that mystery shopping exercises should be carried out and that orders shouldn’t be placed unless products are in stock and services are available.

Andrea Coscelli, CMA chief executive, said: “So much of business relies on trust. It’s essential that people shopping online receive what they ordered and are supported if things go wrong, quickly receiving any refund they are due.

“We welcome that Groupon has now committed to address concerns about customer service issues and ensure it is abiding by the law, so that people can feel more confident shopping online in the future.”

As well as potentially breaking consumer protection law, Groupon UK was potentially in breach of the previous undertakings that it gave to the CMA’s predecessor, the Office of Fair Trading (OFT), in 2012. As part of these, Groupon UK pledged to ensure information on its website was not misleading and to comply with customers’ legal cancellation and refund rights.

In order to ensure that Groupon abides by its latest commitments, the company will appoint a compliance officer who will be responsible for ensuring Groupon adheres to the new undertakings.