We're all familiar with the standard coupons that continue to go strong, particularly since the inception of websites that make thousands of downloadable coupons available free of charge.
However the new daily deal websites like Groupon and LivingSocial have crossed over into uncharted coupon territory. Many claim these vouchers are no different than gift cards, yet they're subject to few or none of the same regulations.
How Gift Cards Changed
In case you missed it, federal gift card regulations underwent significant changes in 2010. Issuers now can't charge inactivity fees until one year after purchase, gift cards may not expire for five years, and information about fees and expiration dates must be printed clearly on the card.
Complaints About Group Buying Vouchers
In essence, a daily deal voucher works the same as a gift card. They both have an established, prepaid amount that can only be used on products from specific merchants. However, daily deal coupons vary widely in expiration dates and don't have set sales tax procedures, potentially putting the services in violation of several state laws. To save money it may be safer to purchase gift cards at a discount from sites such as GiftCardGranny.com.
The Responsible Party
Who's responsible when issues arise with your deal-of-the-day? There seems to be a disconnect between the issuer and the merchant. Technically, it's good for business when vouchers expire or go unclaimed. Businesses don't have to provide the goods and services, but still make money.
Groupon does send emails notifying customers their coupons will expire soon. Also, there are numerous stories of group-buying giants refunding money when merchants go out of business.
A Need For Uniformity
Since daily deals are new on the scene, more time is needed to see where responsibility for legal compliance lies. One popular solution is for deal providers to educate small businesses on local laws and regulations, since they're equipped with significantly more legal resources. This would help provide a uniform standard for consumers until the feds catch up.
In the meantime, read up on the deal-makers terms of service. It'll provide you with the nitty-gritty details of what can be expected if your offer goes awry.
Read more about group buying in the post "Daily Deal Strategies: 8 Tips to Get More From Group-Buying Sites."
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Thank you, Andrea!