April 2 (Reuters) – Groupon Inc, which runs the
world’s largest online coupon site, has agreed to an $8.5
million settlement of litigation alleging expiration dates on
its coupons are illegal.
The settlement resolves 17 lawsuits consolidated in a
federal court in San Diego, where settlement papers were filed
on March 29.
It addresses claims that the restrictions imposed on
consumers by the Chicago-based company and various retailers it
works with violated federal and state consumer protection laws.
The plaintiffs contended Groupon “effectively creates a
sense of urgency” among consumers to buy gift certificates by
offering “daily deals” for a short amount of time, usually 24
hours.
“Consumers therefore feel pressured and are rushed into
buying the gift certificates and unwittingly become subject to
the onerous sales conditions imposed,” including that gift
certificates be used in a single transaction and that cash
refunds for unused portions are not allowed, court papers show.
Groupon spokeswoman Julie Mossler said the company does not
discuss pending litigation.
The settlement was reached one day before Groupon
unexpectedly revised its fourth-quarter results and said it had
a “material weakness” in its internal controls after failing to
set aside enough money for customer refunds.
Its shares were down $2.78, or 15.1 percent, at $15.60 in
late afternoon trading on the Nasdaq.
