The CMA has secured commitments from Groupon to improve its customer service and to offer refunds to certain customers previously not given this option.
- CMA secures commitments from discount shopping website Groupon to improve customer service and ensure accuracy of descriptions on its website
- Groupon will offer refunds to certain customers who were previously not offered refunds
The Competition and Markets Authority (CMA) launched an enforcement investigation into Groupon UK, an online marketplace that offers discounts and deals for a range of products and services, in April 2021. 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 did not 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. For example, in cases where customers had not been provided with the goods or services that they had paid for, they were sometimes only offered Groupon credits instead of refunds.
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 7 days and paid within 14 days of their response. This includes customers who did not 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 homepage of the Groupon website and app for the next 60 days outlining details on the availability of refunds
- Any future complaints from customers will be acknowledged within 24 hours and dealt with within 14 days
- Descriptions of goods and services on the Groupon website and app are accurate
- A new team is set up to investigate deals when a certain number of customers get in touch with Groupon about their purchase
- Mystery shopping exercises are carried out
- Orders cannot be placed unless products are in stock and services are available
Andrea Coscelli, Chief Executive of the CMA, 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 is 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 – and will need to regularly report to the CMA on its progress. For more information, visit the Groupon investigation web page.