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ASA Adjudication on MyCityDeal Ltd

MyCityDeal Ltd t/a Groupon UK

1 Liverpool Street
London
EC2M 7QD

Date:

5 January 2011

Media:

E-mail, Internet (sales promotion)

Sector:

Leisure

Number of complaints:

2

Complaint Ref:

139780

Ad

Three ads by Groupon.

a. An e-mail stated in the subject heading "£9.80 for a South American banquet...". The body of the e-mail stated "Today's deal: £9.80 instead of £24.50 for two people to enjoy fantastic all you can eat Brazilian Rodizio food at ... Save 60% ... This deal is available until 25-Aug-2010 00:59".

b. A sales promotion, on the Groupon website, stated "Today's deal: £15.50 instead of £39 for an adrenaline-filled Segway Safari experience through an exciting terrain ... Save 60% ... Fine Print 1 voucher per visit ... Voucher valid for 3 months Minimum age of 12; Under 16 must be accompanied by an adult Advance telephone booking essential, please have voucher and security codes ready Not valid with other offers".

c. A sales promotion, on the Groupon website, stated "Today's deal: £29 instead of £83.50 for two people to enjoy three courses of locally sourced British cuisine plus tea or coffee ... Save 65% ...".

Issue

One complainant challenged whether:

1. ad (a) was misleading, because it failed to make clear that one person must pay for a full price meal in order for the second diner to obtain the discounted price and

2. ad (b) was misleading, because it failed to make clear that the deal was not available at weekends unless customers paid an extra £10.

3. A second complainant challenged whether ad (c) misleadingly exaggerated the claimed saving; she believed that if two people were to purchase a three course meal, consisting of the most expensive menu choices, and tea or coffee, the total cost would still not amount to £83.50.

CAP Code (Edition 11)

8.17.1

CAP Code (Edition 12)

Response

Groupon said they had no commercial interest in misleading their customers; if an offer was poorly described on their website, that detrimentally affected their relationship with customers and business partners, undermining the investment they made in acquiring both. Further, in presenting in excess of 50 deals per day, there was a likelihood of some degree of human error. However, they sought to address that through extensive staff training and by incorporating quality control safeguards.

1. Groupon said the complaint arose as a result of a drafting error by the editing team. They explained that, although they had a number of processes in place to prevent such errors occurring, it was not picked up. Groupon submitted a copy of the contract with the restaurant, which listed the terms and conditions attached to the offer, and a screenshot from their database. They said the editor had understood that the offer was available for two people rather than to be shared between two people.

Groupon said, due to the exponential growth of their company, they had hired hundreds of new employees over the past months and the offer in question had been written up by a new starter. In that context, occasional errors were going to happen in spite of close management and control processes. They said they made a "live" change to the offer as promoted on the website as soon as the problem was made known to them. Further, their customer service team was briefed to reimburse those customers who requested a refund.

2. Groupon said, shortly after the offer had been advertised, the relevant Account Management team, who were responsible for all operational aspects of a deal going live on the website, became aware of the omission through communication with the customer service team. Enquiries with Segway Safari revealed that the sales representative had agreed with them that they would be entitled to charge an additional £10 for weekend bookings, but the sales representative had failed to note that on the database. The member of staff was dismissed and customer services were fully briefed and authorised to refund all customers who raised issues with the voucher. Groupon said they would be running the offer again in future, ensuring that it was clear that a £10 surcharge applied on weekends.

3. Groupon disagreed that ad (c) was misleading and said the offer was calculated on the basis of the restaurant's most expensive menu items at the time the agreement was signed. That broke down per person as £6.25 for a starter, £22 for a main course, £10.50 for a cheeseboard and £3 for tea or coffee. They said those prices were available at the time the contract was signed but that there were some fluctuations in pricing due to seasonal variations. Groupon nevertheless pointed out that specials were regularly available priced in excess of £22. They sent a copy of the contract with the restaurant and copies of e-mail exchanges with the restaurant manager in support.

Assessment

1. Upheld

The ASA understood that the complaint had arisen as a result of a drafting error, which had been overlooked in Groupon's checking process. We also noted they had ensured that those customers who asked for a refund received one.

We nevertheless noted the e-mail stated "£9.80 instead of £24.50 for two people to enjoy ..." and considered that readers were likely to infer that, for the price of £9.80, two people could enjoy the advertised offer. Because we understood that only one person would pay £9.80 while the other paid the full price of £24.50, we concluded that the e-mail was misleading.

2. Upheld

We noted the error had arisen as a result of a failure by the sales representative to add the terms of the offer to Groupon's database. We also noted they had ensured that those customers who asked for a refund received one.

We noted the ad stated "Fine Print" and then listed five terms and conditions, but did not mention that a £10 surcharge would apply to use the voucher at weekends. We considered that readers were likely to infer that the only restrictions to the offer were those listed in the ad and would therefore assume that the offer was available every day. We considered that the need to pay a £10 surcharge was a significant condiiton of the offer that should have been made clear. Because that was not the case, we concluded that the sales promotion was misleading.

On points (1) and (2), ads (a) and (b) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification), 8.2 (Sales promotions) and 8.17.1 (Significant conditions for promotions).

3. Upheld

We considered that the ad implied that customers would always save 65% on a three course meal. We acknowledged that, by selecting the highest priced items from the menu, at the time the ad appeared, the total cost of the meal was £83.50 and the advertised saving of 65% was accurate. We also understood that there were specials available on a regular basis that were priced at around £22. We nevertheless considered that every diner would not always choose the most expensive menu items and, further, depending on seasonal variations, it might not always be possible to bring the total cost of the meal to £83.50. We therefore understood that the claimed "Save 65%" might not always be achieved. We considered that the ad should have quoted a percentage saving that was more readily achievable and which was not dependent on specials priced at £22 or above being available.

Further, we considered that the savings claim should have been qualified, for example "Save up to X%", to make clear that that was the maximum saving that could be achieved and not that which would be achieved in every case. We also considered that the ad should have made clear that the savings calculation was based on choosing the most expensive menu options. Because such qualifications were lacking, we concluded that the sales promotion was misleading.

On this point, ad (c) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification).

Action

Ads (a), (b) and (c) must not appear again in their current form. We told Groupon to ensure that all significant terms and conditions of promotions were made clear in future and that they did not exaggerate the extent of any savings that could be achieved.

Adjudication of the ASA Council (Non-broadcast)

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