Websites that offer discounts on everything from spa days and weekend breaks, to magazine subscriptions are growing in numbers. But in March of this year the Office of Fair Trading found daily deal company Groupon had repeatedly breached consumer protection regulations, and the Advertising Standards Authority banned several of its ads for being misleading. KGB has also run into trouble with the Advertising Standards Authority. But have they learnt their lessons by now?

Andy Woods, a keen sportsman, was attracted to register with Groupon. Last month they offered him a six month subscription to a golfing magazine, at apparently 50% the price - costing him £22.35.

However the cost of the magazine per issue was £4.20 so six months would normally have cost Andy £25.20. And if he had subscribed directly via the magazine’s website it would have cost him £23, just 65 pence more than the Groupon offer. Although Groupon’s deal did come with £15 worth of golf vouchers, it still wasn’t the half price discount Andy was promised.

When Andy complained to Groupon they informed him that it was never their intention to mislead anyone and that each of their deals undergoes a price verification process.

But something went wrong with the process here. For Andy the deal was nowhere near as good as advertised. And it came just seven months after Groupon assured the Office of Fair Trading that it would publish no more misleading ads.

“The complaints we received about KGB started increasing significantly in 2012. The number of upheld complaints went from two last year to 21 this year, which is entirely unacceptable for this type of business…” says Lynsay Taffe, Advertising Standards Authority.

The ASA have identified cases where the company was unable to back up its claims of big savings.

For example a weekend hotel break on the Isle of Wight was offered for £99 claiming that it would ordinarily be £269. When KGB was questioned about this they were not able to prove that the hotel had genuinely been on offer for £269.

The regulator has also found instances where KGB described their deals inaccurately, or left vital information out such as an offer for a kite surfing lesson. However if the consumer wanted to take advantage of the deal on a non-business day they would have to pay £100 more than advertised.

But, while the ASA have seen a drop off in complaints, we’ve continued to receive them.

Flora Williams purchased a deal for a shoe organiser from KGB for £9.99, original price of £49.99. But the product didn’t turn up - seven weeks after paying her money, Flora’s still waiting for it to arrive.

Ashley Watson’s been waiting even longer for his order from KGB. He paid £64.99 for a Google Android Games Console but eight weeks on still no product.

“KGB are responsible for setting up the deal, they’re the ones that liaise with the third parties. They’re the ones that should be fulfilling the promise. I don’t’ feel that that’s happened at all,” says Ashley.

“Whenever a company puts out a promotion, the one thing it doesn’t want is for members of the public to be disappointed with what they receive in return. They won’t last very long if people don’t continue to return to buy from them.” says Lynsay Taffe.

Company Responses

 

A spokesperson for Groupon says,

The specific deal featured was not mis-advertised and offered more value and saving than the offer it is being compared to. Our deal was a 50% discount off the full price of the subscription package available from the publisher. Groupon merchants are allowed to run their own tailored deals in parallel to ours, the publisher did run another offer at the time of the Groupon promotion. Our deal was designed to entice new golfers to the sport with 2-FORE!-1 vouchers. The publisher’s deal (on their website) was for more seasoned golfers and existing customers – offering golf balls. The two deals are therefore not comparable.

It’s our view that the customer always has the right to shop around for the best deal to suit them. What is worth highlighting is that our deal still worked out cheaper per issue for the six-month subscription.

 

A spokesperson for KgB says,

Regarding the two cases you have shared with us, we accept it is disappointing that on this occasion the goods were not available. We note that both customers received outstanding and prompt customer care support, and both have been fully refunded at their request. Attached is the log of our customer care support for them.

Flora Williams:

10 October, the customer emailed us enquiring about her order for the shoe rack. We responded on the same day informing her to allow 21 days for delivery as stated on the fine print.

30 October the customer emailed that she still has not received the item and that she was unsuccessful in contacting the merchant. We responded on the same day and informed her that we would contact the merchant on her behalf.

01 November, we sent an update to the customer to inform her that her order was due for immediate dispatch. The customer did not respond. Note that we did not have her telephone number.

09 November, we sent an email to the customer to ask if the item has arrived and offered the refund option if she was no longer willing to wait, in the event the item hadn’t arrived.

11 November, we processed a refund for the customer and the P&P is to be credited by the merchant.

Ashley Watson:

04 October the customer emailed us enquiring about the order as a notification from the merchant stated order despatch. We responded on the same day informing that 21 working days delivery was stated in the deal terms.

12 October, the customer emailed back still following up on her order stating that it has been 22 days and nothing has arrived. We responded on the same day informing her that we will get in touch with the merchant on her behalf and to allow 6 business days to get back to her with an update.

16 October, we touched base with the customer to say we were still processing the query and will continue to contact the merchant for a resolution.

18 October, we sent the customer an update that we had contacted the merchant who confirmed the order has been shipped and to wait a few days for delivery.

22 October, the customer emailed back stating that the item still has not arrived and asked for someone to call him. We called the customer on the same day and informed we were chasing the merchant to get more information about the order.

24 October, the customer emailed again still following up on her order and asking for an update. We called and the customer said they were willing to wait another week for the order to arrive.

26 October, we were able to speak again with the customer over the phone and asked to be informed if the order had not been received after a week.

31 October, the customer left a voicemail stating that they no longer wanted to wait and asked for a refund.

09 November, we processed a refund and paid P&P by cheque. We informed the customer accordingly via email.