Daily discount sites not always a good deal

Vouchers give huge discounts but what happens if the merchant then refuses to come through with the promised deal?
November 8, 2013 9:22:56 PM PST
Daily deal websites like Groupon and LivingSocial offer discounts on everything from dining to yoga classes. But how reliable are those deal vouchers?

Sandi Fimmel of Sunnyvale was eager to get the scrapes and dirt off her weathered SUV. So, a daily deal offered by Amazon Local caught her eye. She'd get a $200 auto detailing package for just $99. Diablo Auto Polishing of Santa Clara would do the job.

In Hayward, Jennifer Sommer's car needed a cleaning too. She found a similar offer by the daily deal site LivingSocial. It was a $150 detailing for just $69, also done by Diablo Auto Polishing.

Both women got their vouchers. Then both tried to use them.

"He said, 'I'm booked for several months you know, I won't have anything until August,'" Sommer said.

Fimmel couldn't get an appointment at until after her deal would expire. Sommer couldn't either. Diablo Auto Polishing kept delaying the dates -- and then refused to do the job at all.

When 7 On Your Side contacted Diablo Auto Polishing the owner did not want to go on camera but said the daily deal companies did not compensate him adequately for his work. He has stopped honoring vouchers, and tells customers to get a refund from the deal sellers-- LivingSocial, Amazon and Groupon.

So what if you buy a deal but don't get it?

"It's still the Wild West with respect to understanding what you're really getting into when you get into the daily deal programs," consumer law attorney Julio Ramos said.

Ramos says buyers should get their money back from the daily deal company itself.

"You go after the person who sold you the deal because that's who you have the contract with," Ramos said.

Indeed, LivingSocial, Amazon and other daily deal companies all post their terms of sale, pages of fine print that you agree to when you buy a daily deal.

Amazon Local's refund policy says if you have trouble redeeming a voucher, "please contact us." It doesn't promise a refund, though Amazon did give Fimmel her money back.

The LivingSocial policy says you get a refund if the merchant goes out of business. However, a spokesperson says if a voucher is not honored, LivingSocial would refund the money, and indeed it gave Sommer her money back.

The big daily deal companies are treating vouchers as gift cards. In California, gift cards can't expire. However, the way they interpret the law, the amount you paid never expires but the added value of the deal can expire.

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