Deals from Groupon and other daily deals sites aren’t so great when they expire before you can use them. Luckily, there’s some good news for procrastinators: Just because your Groupon expired doesn’t mean you lose all your money on it
With all the Groupons and other daily deals you’ve bought, you’re entitled to half-price dinners and facials all around town. But your great bargains aren’t so great when they expire before you can use them, as about one in five such deals do.
Luckily, there’s some good news for procrastinators: Just because your Groupon expired doesn’t mean you lose all your money on it.
“We have a consumer-friendly expiration policy,” says Julie Mossler, a spokeswoman for Groupon. “If your Groupon expires, the voucher is still good indefinitely at the business for the amount paid.” For instance, if you spend $20 for a $40 Groupon to a restaurant, and your Groupon expires, you still have $20 in credit to use at the restaurant. In other words, you lose the promotional or bonus value of the deal, but not the purchase price. Living Social and several other daily deal sites, including Juice in the City, Plum District and Urban Dealight, offer the same setup.
That should make buying a Groupon or daily deal voucher relatively risk-free, but it hasn’t exactly worked that way. For starters, few people know about the policy, so if your Groupon expires, chances are you’ll simply trash it without attempting to redeem it. Not all merchants are aware of the policy, either, so trying to redeem an expired voucher at your local pizzeria could earn you a lot of dirty looks, not to mention a full-price pepperoni.
Even more challenging is that the lenient expiration date policy isn’t universal among daily deal sites. Several of have adopted Groupon’s “you can keep your original investment” stance, while others make it less clear. CrowdSavings, for instance, states in its terms that “vouchers expire on the date specified on the voucher, except where otherwise prohibited by law.”
Knowing what’s prohibited by law is the kicker. The 2009 federal Credit Card Accountability Responsibility and Disclosure Act — also known as the Credit CARD Act — was designed to protect customers from predatory credit card practices, but it also lays down the law on gift cards. It says they can’t expire for five years. In the nine states where state law rules that gift cards can never expire, including in California, Colorado, Louisiana, and Maine, the stricter state law supersedes the federal law.
The problem is that it’s not exactly clear whether Groupon and other daily deal offerings are actually gift cards. Some claim that they are; others see them more as coupons. According to Boyan Josic, CEO of DailyDealNews, an industry news site, they’re actually a third breed. “Daily deals are essentially vouchers, closer to a gift card than a coupon, but still not the same.”
As of late 2011, 15 lawsuits related to gift card laws are pending against Groupon, including one brought by an Illinois man disgruntled over a Groupon to Nordstrom Rack that expired after five weeks. Other companies face similar lawsuits. While none of the suits have been decided, “both Groupon and LivingSocial in recent actions seem to believe that they will at least be subject to state gift card laws,” says Rocky Agrawal, a technology and daily deal industry analyst. “It’s still an open question as to whether they will be subject to the federal CARD Act.”
Agrawal, for one, thinks that they should be. “These are important consumer protections that have been established over time. Consumers shouldn’t just lose these. They are providing their money upfront to these companies and should be protected under the law.” If state and federal gift card laws were enforced more strictly with daily deal sites, it might have other effects too: for instance, removing the rule that vouchers have to be used in a single visit, allowing you to get cash back for unused value, even forcing a removal of expiration dates for promotional value.
That isn’t necessarily a good move, contends Josic. “Part of the business model of daily deals is to have the time constraints in place to encourage purchase. This protects all parties involved, especially merchants, and encourages repeat sales.” But it also protects consumers, says Josic. If vouchers never expired, a customer could go to redeem a daily deal in six years and find that the store is out of business, or that the product is no longer available, rendering their voucher valueless.
For now, the best bet is still to use your daily deal voucher before it expires. But here’s how to make sure you get your money’s worth:
1. Don’t procrastinate. “Consumers purchase voucher deals and think to themselves, ‘I have plenty of time to use this.’ Naturally, time passes, and the deal expires before they know it,” says Josic. Don’t purchase a Groupon unless you know you can use it within the next month or two. If the voucher is for a service, such as horseback-riding lessons or a haircut, schedule an appointment immediately, so that you won’t find the merchant booked solid two weeks before the expiration date.
2. Remind yourself. It’s easy to forget you bought a voucher when it’s not a physical object. So print it out and keep it somewhere you’ll see it, or at least keep a list of all your vouchers and their expiration dates. Some daily deal companies send a reminder email when a voucher is about to expire, but you can do the same thing for yourself with a program such as FollowUpThen, MemoToMe or RemembertheMilk, which can email you reminders of expiration dates.
3. Read the fine print. Most daily deal sites offer a blanket “We’ll abide by state law” in regard to voucher expirations, so find out what your state law is — but tread carefully, since it’s not clear whether deal vouchers are subject to state gift card laws at all.
4. Make bigger purchases. It sounds counterintuitive, because you have more to lose, but that’s exactly why it works. “I can say anecdotally that the higher the price point, the higher the redemption,” says Ashley Furness, deals coordinator at Moolala. “A $199 deal probably has close to 100 percent redemption.” Those $10 purchases, on the other hand, are more likely to go kaput.
If you do have a voucher expire, ask the merchant to redeem it for your paid value. If the merchant won’t, contact the company you bought it from. Most will work with merchants to make sure next time you won’t have a problem redeeming your voucher — or they’ll refund your money. If they won’t, you may want to take your business elsewhere.
|Daily deal sites’ expiration policies|
|Groupon||Allows redemption of the paid portion of the voucher for five years after expiration.|
|Groupon Now||Automatically refunds the paid portion of the voucher if not used before expiration.|
|Living Social||Allows redemption of the paid portion of the voucher for five years after expiration.|
|Google Offers||Will refund the paid portion of the voucher for five years after expiration or longer as required by state law.|
|Plum District||Allows redemption of the paid portion of the voucher for five years after expiration.|
|Juice in the City||Allows redemption of the paid portion of the voucher for five years after expiration.|
|Urban Dealight||Allows redemption of the paid portion of the voucher for five years after expiration.|
|Moolala||Refuses to disclose expiration policy.|
|EverSave||Allows redemption of the paid portion of the voucher for five years after expiration.|
|CrowdSavings||Vouchers expire on the date specified, except where otherwise prohibited by law.|
See related: 2011 gift card comparison chart, A guide to the Credit CARD Act