Groupon alleged to have altered merchant agreement

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Online home improvement marketplace filed a lawsuit on Dec. 6 against Groupon that alleges the daily deals company altered its merchant agreement without notifying the merchant or soliciting consent to the changes.

According to the lawsuit, Groupon added language that would require to honor a consumer's voucher so long as the consumer made an appointment prior to the voucher's expiration date. The lawsuit states that Groupon added the language “while those emails [containing the merchant agreement] are in post-transmission electronic storage.”

The voucher for house-painting services promoted by through Groupon was available to Groupon consumers in Cincinnati and Dayton, Ohio, and expired on July 1 and July 8 for the respective markets.

A copy of the merchant agreement included in the lawsuit shows that Groupon sent the merchant agreement via email and requested that reply to the email with “Agree” in the subject line or body for the agreement to take effect.
"Unfortunately the litigation means that we can't go into detail about our processes, but we contract with merchants in a variety of ways, including by email, electronic signature and hard copy," a Groupon spokesman said via email. "It depends upon the circumstances of each deal. Every deal's parameters are different, and Groupon makes it clear to customers in the deal disclosures when appointments have to be made and for how long the promotional value of the Groupon is to be honored by the merchant. For example, deals done with our Groupon NOW! product are time-limited, enabling merchants to fill slack periods in their day, so they tend to be valid for specific time periods within a day (and customers are automatically refunded if they do not use the deal)." did not immediately respond to requests for comment.

A study published by Rice University in July found that less than half of 324 businesses surveyed that had run a promotion through Groupon said they would do so again. In September, Groupon began a Groupon Rewards pilot program that would incentivize consumers to become repeat customers of Groupon merchants.

Groupon's initial public offering last month generated $700 million.

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