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Groupon threatened with court action after refusing cash refunds

Deals website Groupon faces court action unless it improves how it treats its customers, the Competition and Markets Authority (CMA) has said. It comes after the watchdog found Groupon failed to provide some customers with cash refunds they were legally entitled to, only offering credit instead.

The CMA has now written to the online retailer to ask it to sign formal commitments, known as 'undertakings', to address its concerns. This could include Groupon providing redress to shoppers wrongly denied a refund – though the exact action is yet to be confirmed and will be subject to discussions between Groupon and the CMA. If Groupon fails to act it may face court action. See our Consumer Rights guide for more info on your refund rights. 

Concerns also raised over the quality of goods sold and delivery timescales

In addition to its findings on refunds, the CMA says it is also concerned that Groupon isn't doing enough to ensure that:

  • Purchased vouchers can always be redeemed within the advertised periods.
  • Descriptions of goods and services are accurate.
  • Products are in stock and delivered within the advertised timeframes.
  • Items are of a satisfactory quality. 
  • Customer service is satisfactory when shoppers contact Groupon about problems. 

The deals website will also need to address these issues.

It's not the first time Groupon has found itself in trouble with regulators – in 2012, it agreed to change some of its business practices following an investigation by the CMA's predecessor, the Office of Fair Trading. At the time, Groupon pledged to ensure information on its website was not misleading and to comply with customers’ legal cancellation and refund rights – pledges the CMA says it may now be breaking.

What does the CMA say?

Andrea Coscelli, CMA chief executive, said: "More people than ever are shopping online, especially over the last year. It is therefore essential that online businesses treat customers fairly and refund them money where due under consumer law. Groupon must swiftly step up and do right by its customers if it wants to avoid court action."

We've approached Groupon for comment and will update this story if we hear back.

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