Groupon class action lawsuit ends in $500,000 settlement

Canadians using Groupon prior to March 8 were sent notice that the $500,000 settlement approval for the class action lawsuit against Groupon Inc. has gone through, giving an estimated 1 million daily deal hunters the chance to redeem vouchers that were considered expired.

In late October, Ontario Superior Court of Justice Edward Belobaba approved the terms of settlement for the lawsuit, with Groupon agreeing to set up a fund of $535,000. About $235,000 will be used to pay for legal fees, but the company has said it will set aside up to $300,000 to pay for customers’ claim

However, that amount is reserved for customers who can’t get their vouchers redeemed by the merchants, whether that’s because they moved addresses or because the business that issued the voucher has since closed down.

Law firm Sack Goldblatt Mitchell LLP, which filed the lawsuit, has posted a notice for class members on the site

The biggest change to come out of that settlement is that now, anyone who bought a voucher from Groupon before March 8, 2013, can now redeem it, even if the coupon is expired. However, if any class members want to opt out of the settlement and file their own claims, they must submit those by Jan. 27, 2014 at 5 p.m. EST.

“People are entitled to use their Groupons, up to the purchase price, as if they had no expiry date,” says Louis Sokolov, a lawyer at Sotos LLP and one of the class action lawyers filing the suit. He was a partner at Sack Goldblatt Mitchell up until April 2013.

“Previously Groupon printed expiry dates on most, if not all of the vouchers. Those expiry dates are now gone for the purchase price,” he says. “The first thing people are supposed to do, if they didn’t use them or they only used part of it, is to go back to the merchant and the merchant will honour them.”

“So if you had a Groupon that supposedly expired two years ago, you can now take that and go to the merchant and get the value that you paid for it. That’s how the money is unlocked.”

In his decision, Justice Belobaba said the actual value of the settlement was up to $7 million, based on the number of customers that haven’t claimed their vouchers. Many of them may still have vouchers in their email inboxes, for example.

As Groupon is of the biggest group-buying sites, smaller sites in the space will probably be taking note of this settlement, Sokolov says. Most of them have changed their policies, but some deal sites may still be vulnerable to similar lawsuits.

However, when asked if his firm would be pursuing class action lawsuits against those sites, Sokolov would only say it is always looking to talk to people who may have complaints against businesses, and that from there, it would gauge whether class actions would be of any help.

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Candice So
Candice So
Candice is a graduate of Carleton University and has worked in several newsrooms as a freelance reporter and intern, including the Edmonton Journal, the Ottawa Citizen, the Globe and Mail, and the Windsor Star. Candice is a dog lover and a coffee drinker.

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