Another setback for Groupon

After pulling its Super Bowl ads amid mounting criticism, Groupon flubs a Valentine's Day deal with FTD.

By Kim Peterson Feb 14, 2011 3:15PM
Credit: (© Scott Olson/Getty Images)
Caption: A sign at the Groupon headquarters in ChicagoIt seemed Groupon could do no wrong last year. The company was so hot that it turned down a $6 billion acquisition offer from Google (GOOG).

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.

20Comments
Feb 14, 2011 4:45PM
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Love Groupon.  HATE the video that loads automatically while I was reading the article and BLASTED the sound. 

Damn videos. 

Feb 14, 2011 4:44PM
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I love Groupon and find it amazing on the part of FTD that they have managed to spin this into being Groupons fault!  Groupon is a secondary service provider-they help companies large and small advertise their services by negotiating deals that are sold by Groupon (sale is hosted by their site).  The actual company however is responsible for all redemption, terms of sale etc-it is RIDICULOUS to me that Groupon is being blamed for FTD's sketchy business practices.  FTD is the one who set up this "other" website with these alternate prices, etc and sets their price structures.  Groupon is also wonderful about offering refunds in all kinds of situations-small businesses that close, etc.  Much better than any of the other copycat "deal of the day" site.  Before you rip on Groupon, DO YOUR HOMEWORK!!  Some of us LIKE to save money :)
Feb 14, 2011 4:30PM
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FTD routinely raises their prices when it comes to using gift cards. You can't checkout from their regular site with a gift card. If you look at the back of the gift card you are directed to another site. I have done prices comparison between the two sites and the items at the gift card site were considerably higher than at their regular site and that was at the exact same moment. Groupon should have done more research before entering in on the deal with FTD.
Feb 14, 2011 5:45PM
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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.  

Feb 14, 2011 5:21PM
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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.

Feb 14, 2011 5:16PM
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"At no time did we inflate any prices..."

 

Yeah, right.

 

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.

Feb 14, 2011 6:55PM
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Let's get a few things strait.

1) No publicity is bad publicity, More people signed up from those ads than people stopped. 
2) Its like William Shatner says, "65 dollar hotel room is better than an empty hotel room".  So i'm sorry if someone doesn't like that Groupon wants to make a buck off of u making a buck. Fact is its better than making no buck. 
3) Family guy, American Dad, Simpsons, SNL, etc... (You get the picture), have done MUCH more insensitive Jokes and skits. No one made Family guy pull the episode when peter see's a sign reading "FREE TIBET" and thinks its for sale.  Touchy feely, I get that there is devastation in the world. Now lets realize it and not let it consume us and over come it. Laughter really is the best medicine. 


Over all, Groupon is a genius idea and if you thought of the idea, you'd think so too. The company has been around for very short time, they are bound to have a few hiccups along the way. What matters is how they get out of it. 

Groupon All the way!
Feb 14, 2011 6:04PM
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To those of you who say Groupon is gone by the end of the year ha! I'd never consider using coupons for one I'm male so using pieces of paper to save money doesn't equate to me but saving 50% on something... yeah now I'm listening. And the fact that over a hundred people just thumbs downed that comment... I'd say they are going to be in business for awhile...
Feb 14, 2011 7:52PM
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I haven't been impressed enough with any of Groupon's offerings to even bother.  But the real problem is with FTD.  They are infamous for the bait and switch and not honoring their promotions.  I sent flowers last year on an offer that included a magazine subscription for both myself and the recipient of the flowers.  I even paid more for the flowers than I normally would have, just to get the subscription included.  The flowers got there, but neither the recipient of the flowers or I ever got anything in regards to the magazine.  And calls to FTD were a waste of time.  Their customer service is HORRIBLE.
Feb 14, 2011 8:18PM
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i have used groupon multiple times and have been very happy.  but my experience with ftd has not been a good one.  My wife and her friends pooled money to order a bouquet for someone.  my wife showed everyone what she ordered and her friends sent her the money.  well the person received flowers that were significantly less impressive than what my wife had paid for.  and of course as the pictures circulated people began accusing my wife of buying cheaper flowers. 

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.  


Feb 15, 2011 2:04PM
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Too BIG, too Fast and nobody is watching the ship.....  They are just opening the door for other sites to take away their market share.  With www.livingsocial.com and www.freefu.com gaining users daily and not creating the PR disasters, its only time before that $6 billion offer is more like $6 million.  
Feb 14, 2011 6:38PM
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Usually with organizations like this I don't realise that much savings. It's kind of similiar to the coupon books or Costco membership.  If they offer products and services your family uses frequently then it's great. If you have a small family and don't shop via "the case" or "large size" products then you're not going to realise savings. I finally figured it out when I used coupons and shopped accordingly. Needless to say I don't shop that way.
Feb 15, 2011 9:24AM
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This wasnt an issue of  "reading the fine print" because no where in the fine print did it say that you will be spending an additional $20 no matter what. First,  There were no flowers for $20 to use the $40 Groupon on (because the "service charge" was almost $20). This meant that you had to get flowers valued at $30 or more, and after adding the "service charge", you ended up spending at least $50 ( minus the $40 Groupon, still adds an additional $10 to the original $20 for the Groupon). Dont get me wrong, I expected to pay additional for shipping, just not $20.

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.

Feb 15, 2011 12:37AM
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I really take exception to people on here putting down Groupon because they take 50% of the sale price. Any merchant that enters into a deal with Groupon is told up front and clearly that this is Groupon's policy. Groupon puts this into a contract that is written in simple english not legalese. The Merchant has to send an email to Grouon stating that they agree to the terms of the contract. If these terms are not acceptable, the merchant may decline the deal. Many merchants I know have truly benefited from Groupon deals. They would not be as popular as they are if merchants didn't agree that this is a good deal and customers agree that this is a good deal. Groupon in no way knows what a merchant will do once the coupon is presented. If FTD did anything shaddy, Groupon was not aware of it before hand. I have found them to be a reputable company to deal with. Their job is to sell coupons. The Merchants job is to honor the deal. Groupon is a very successful business. They didn't become that way by putting together shady deals. Thats not to say that some deals go bad. This is always the Merchants fault. Groupon wants to continue being successful and no one remains succesful by intentionally selling shaddy deals.
Feb 14, 2011 6:28PM
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I've been trying to deal with Groupon and FTD over this complete bait and switch since Saturday.  Both companies share the blame for defrauding their customers, FTD for raising prices and not letting Groupon users apply discount codes to their orders, but most notably Groupon for selling a "deal" that they knew good and well was NOT a "deal".

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.
Feb 14, 2011 6:37PM
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Groupon isn't as good as it seems. They almost insist on half price then the provider only gets half of half. Because of that, providers are packing the price I think. Shop with caution.
Feb 14, 2011 5:33PM
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Flowers are marketed to uncreative putzes who don't know how to give a special gift but feel they MUST buy SOMETHING.  Gentlemen, as a lady with lady friends, I can tell you honestly flowers are not a big deal to us. At all.  They die. At least a whole plant has a chance at staying power.  Most women want, for the same money, an experience. A movie or night out at a museum.  The Zoo is fun or a photo of a special time nicely framed.  The jewelry, flowers candy thing caters to a woman who has no interests and not much of a life.  If you think about it- Women don't ask for flowers and it just sends us scurrying for a vase (which is never easily found).  If money is no object-Take us snorkling with a Whale Shark in Belize.  If your broke- write us a love letter and cook us spaghetti.  If your dating one of the rare women that like flowers as a gift-Dump her.  She's boring.
Feb 14, 2011 4:56PM
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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.

Feb 14, 2011 4:16PM
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Groupon.com is a lame a$$ website! It'll be gone by the end of the year!
Feb 14, 2011 4:35PM
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the funniest thing about this is,until i saw the stuff about people hating the super bowl ad,i had never heard of groupon!!!or any site like that....and i dont get it....do you actually pay them to get coupons?sounds like a total scam to me....surprises me that some fly by night scam company could even afford a super bowl ad!!!weird....but i can say none of this changes how likely i am to use groupon....i wouldnt have before,i wont now,no diff
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