Another setback for Groupon
After pulling its Super Bowl ads amid mounting criticism, Groupon flubs a Valentine's Day deal with FTD.
But the discount-deals company is stumbling in 2011. Its latest headache started off as a fairly typical promotion. In a bid to get more Valentine's Day sales, FTD offered a $20 discount on $40 worth of flowers.
That sounded good to the 3,000 people who bought the deal and were directed to a specific FTD website for purchase. But some users found that the flowers on that site were marked up. In fact, some of the very same flowers could be found elsewhere on FTD's site for less, Consumerist reports.
A rash of complaints followed. FTD responded by saying that while some flowers were indeed marked down by $5 or $10 elsewhere on the site, Groupon's users were still getting the better deal with a $20 discount. And anyway, FTD said, it was clear that the Groupon deal didn't apply to sale items.
Post continues after video:
But the last thing either company needed was bad publicity, so Groupon and FTD decided to give users the sale price and the $20 discount. They also offered refunds.
"At no time did we inflate any prices. Absolutely not," FTD president Rob Apatoff told The Associated Press. "Because there was some confusion with a few, we decided to step up and do the right thing to make sure everybody was happy."
The FTD debacle follows days of image repair for Groupon after its Super Bowl ads backfired. The company was criticized after running three spots that appeared to make light of issues like human rights oppression in Tibet.
"The people of Tibet are in trouble," actor Timothy Hutton said with apparent concern. "But they still whip up an amazing fish curry!" You can watch the spot here.
Some viewers perceived the ads as flippant and insensitive to significant global concerns. Groupon founder Andrew Mason tried to explain the thinking behind the ads, but when that didn't stem the criticism, he apologized.
"We hate that we offended people, and we're very sorry that we did -- it's the last thing we wanted," he wrote on his blog. Groupon pulled the ads and will run something "less polarizing" instead, Mason added.
I've been going through Groupon for about a year now and have always been more than happy with my purchases. People need to read the fine print that is always stated. There have been a few I've passed up because after reading the fine print realized it wasn't what I thought or didn't work for my situation. READ THE FINE PRINT.
Orangeplaid: That is very unfortunate however I to have a couple of friends, myself included, that have sold their product/service through Groupon and in no way did it have a negative affect on our businesses, quite the opposite actually, so your friend could benefit if she did a thing or two different which I can't go into on this blog.
And I don't know why Groupon is to blame for FTD. I've had that experience just from their own sale links they've sent me through email.
As far as Groupon goes I've found that I pass up more than I buy but when I do find the deal for me it's very incredible and a truly good deal. Patience and reading the fine print...anyone can eventually find a fabulous deal.
Those who were overly sensitive to the ad should get over it. It was very effective and did what it was intended to do. And the FTD "flub" was no flub. But people always end up wanting more than they bargained for.
"At no time did we inflate any prices..."
This is not the first time I've seen this with FTD. I have a couple of memberships with organizations that provide discounts on various items. One day, while trying to buy some flowers, I noticed that, following a link from a discount site to an FTD website, the prices of the the boquets seemed awfully high (even though I was supposed to be seeing a 20% disccount). Sure enough, when I went to the FTD web site directly, those exact same boquets were significantly cheaper. I checked the "discount" through my other membership and, yep, the prices were higher.
I called FTD and asked them what was going on. They transferred me to three or four different people, each giving me the same song and dance: that I was really getting a "discount", that I was "misreading" the prices, that the discount didn't apply to this or that. When I asked them why, if the last was the case, were they listing items that couldn't be discounted on the special membership site, they didn't really have an answer, but continued to yammer on and on about how I really was getting flowers cheaper.
I complained to the discount site. The next time I checked, the flower prices had been magically adjusted to match the main FTD site. I never did see an actual discount and did not, nor will I ever again, purchase from FTD.
She called customer service and they assured her they would send the original flowers. a couple days later they still hadn't arrived. my wife called back and they claimed that they couldn't get a hold of the original florist and were waiting to discuss the situation with them.
the woman eventually got the right flowers but it was several days after the event they were being presented for.
Either FTD increased its price of the flowers or they increased the "service fee" to recoup its $$ and screwed the Groupon shoppers. I feel like this was more FTD at fault than Groupon, but they should have made it a little more clear.
Another side note. Since I had to use the Groupon within the two days, it was too late for any refund. When I called the day after ordering the flowers on FTD.com to confirm the order, they conveniently told me that they didn't have the arrangement that I ordered. I wondered when they were going to tell me. They offered me an upgraded arrangement at no charge. In the end, I feel that I ended up with a more than fair deal. I spent $40 (groupon plus "service fee") for a $69 arrangement.
After getting the e mail runaround from both FTD and Groupon, I picked up the phone and called FTD's corporate headquarters today. I got right through to a senior executive who was sincere and apologetic, although did not honor my request for a refund for the flowers I ordered. It's after 4PM in the deliver area and the flowers still haven't arrived, so I'll be following up with FTD shortly. But I do give them credit for dealing with the situation honestly.
Groupon is another story. They would only communicate with me on e mail, and then on the public Twitter timeline (you can check it at @markedwards). When I told the Groupon person that we should continue the discussion in a less public forum, he clammed up and never contacted me. So I called their customer service center and asked to speak to a executive. I was told that I couldn't be transferred to one and that the best they could do was take my contact info and get back to me "at some point in the future". While they did offer to refund my purchase price for their certificate, they NEVER followed through with that via e mail, phone, or Twitter by confirming that they were going to make the refund or do anything else.
Groupon is far from ready to deal with problems, even the ones they create themselves. They conspired with FTD to offer their customers a deal that was in fact NOT a deal and have made it almost impossible to resolve the situation. They are acting in an irresponsible manner at best and very likely guilty of consumer fraud.
Groupon is a scam and hurtful to businesses. Sure it gives a discount but to what cost.
A good example, I have a friend who does facials for a living. Groupon came to her and asked if she would like to offer groupon, it will help her business out. The suggested to her that she offer her service at a 50% discount (bringing it to $25) they sold 200, but then took 50% of the profit from that sales (now we are down to 12.50, which doesn’t even cover the cost of doing the facial she told me).
Of those people who bought it 185 came in, only one came back for a second time. There is no loyalty with groupon clients they want it cheep fast and now, no matter what the quality is. As time goes buy I can see more businesses getting wise like FTD and raising prices to compensate for the huuuuuge chuck groupon is taking.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The grocery giant expanded its Simple Truth line nationwide 2 years ago and has seen consistent growth.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.