Is there a solution to Groupon’s SA woes?

There’s been a recent surge in complaints about the South African iteration of Groupon, with many customers getting vocal about undelivered products, not receiving refunds as promised and even about difficulties in opting out of their mailing list.

Complaints are flooding in on consumer websites such as HelloPeter, most of which typically relate to users not receiving goods paid for, refunds that never get processed, poor after-sales service and spamming by the group-buying giant.

One HelloPeter user said that he keeps receiving the company’s daily deals, despite repeated attempts to make it stop emailing him:

“I unfortunately subscribed to Groupon South Africa and got tired of receiving the many emails from them that have clogged up my inbox, I have tried more than 7 times to unsubscribe from them and yet they continue to spam my inbox, I also tried calling their less than efficient so-called customer care line 021 401 0700 but no one bothered to answer the call. I really am tired of this!” – BB160376

Another said that he did not receive the products purchased:

“I ordered two Lava Watches on Groupon on the 6h of June 2012 and payment was made on the same date. After about 4 queries I was advised by Carmen that they had a 2 week delay and same will be delivered in the 2nd week of July. Well needless to say in the 2nd of July 2012 nothing was delivered as promised. I’ve forwarded an e-mail and asked them for a refund but as yet still no reply. This was the first time I ordered from Groupon SA and this will definitely be the last time.” – amduncan

In his personal response to the outcry of poor service, Wayne Gosling — CEO of Groupon SA — said the company was actively addressing the situation by working to bring 100% of its product deliveries in-house, increasing the internal process efficiencies and staying in constant communication with customers regarding receipt of products.

Gosling also said that Groupon has a standard refund policy that must be adhered to 100%, however did not say why some Groupon customers had not received refunds and why some customers had to resort to taking unreasonably taxing measures to try to get refunds from the company.

To date no explanation has been given as to why support emails and phone calls from many customers have not been answered, or why some users are struggling to opt out of Groupon’s marketing emails.

Lately, there have also been successful complaints lodged against Groupon SA with the Advertising Standards Authority of South Africa, particularly about misleading advertising. An in-depth examination of the hundreds of complaints logged on HelloPeter against Groupon SA also reveals that they are consistently running afoul of the South African Consumer Protect Act on several counts, such as that:

Goods have to be delivered at an agreed date, time and place. If not, consumers are free to accept or cancel the agreement.

Companies are obliged to deliver goods that match the sample or description of the product. Consumers have the right to examine your purchases before accepting them, and reject them if they’re not satisfied.

If a paying customer didn’t get a chance to examine the product and is unhappy with it, it can be returned at the supplier’s expense.

Consumers have up to six months to return faulty or unsafe goods and all refunds are to be executed promptly. (The supplier may charge a small amount if repackaging of the product is required, however.)

All marketing messages must be directly solicited and effective unsubscribe options need to be a standard feature on all communications.

Have you, like many other subscribers, been irked by receiving daily deals from Groupon SA at the crack of dawn?

It just so happens that CPA also places restrictions on when companies are allowed to send out marketing emails.

There are established timing constraints to force suppliers to abstain from engaging in direct marketing during prescribed periods. Legally speaking – unless a client has requested or agreed otherwise, specific dates; calendar holidays and times of day such as early in the morning or late in the evening are marked as periods that are to be kept free of advertising.

With all these sneering consumers around, is it time for Groupon SA to start shaking in its boots?

Maybe. Although it’s a little sticky when it comes to actual enforcement, the new CPA is definitely an act that has teeth. Consumers now have more options for taking legal steps over the infringement of their rights – which should also go a long way in creating a culture of consumer activism as more people become aware of what they have the power to do.

As a business model, the concept of connecting people into an ad hoc buying club to take advantage of bulk discounts has certainly paid off very well for Groupon; but it cuts both ways:

Nowhere else can disappointed customers start piling up quite so rapidly, as when group deals go bad.

A solution to Groupon’s dilemma

Email might be at the heart of Groupon’s problems. According to the Barbara Ulmi, the marketing head of one prominent South African email service provider:

Email is the backbone of any daily deals system and this is the perfect opportunity for Groupon SA to realise the benefits of going with a local email marketing solution instead of a foreign provider that, evidently, doesn’t adhere to our CPA, by auto-sending deals at odd times and giving customers a hard time when trying to opt out.

Groupon SA can do itself a favour by making use of an email service provider (ESP) that offers a more streamlined unsubscribe process and block list features that record unsubscribes and prevent you from sending emails to people who have said that they’re not interested anymore. The best part of going with a good ESP is that once the lines of communication start working more efficiently, logistical issues such as product deliveries and refunds naturally begin to fade away.