Groupon is being sued in Kane County for alleged violations of the Illinois Consumer Fraud Act. The lawsuit alleges that Groupon’s certificates violate the Illinois Consumer Fraud and Deceptive Business Practices Act, because they do not permit a five year period to use the certificate. Groupon has not responded to the lawsuit, yet, but has until Monday to respond to the allegations.
A Groupon user (Adam Dremak) bought a certificate for Norstrom’s Rack and was required to use it within 5 days, but failed to do so. The Groupon user and his attorneys are claiming that the coupon amounts to a gift certificate and is subject to a five year right of redemption. Groupon has responded in other lawsuits of this type with the offer to redeem the coupon at face value, if it is not used within the five day period.
However, Adam is now seeking class certification for his claim. We will see what Groupon says in its response, but this may have a huge impact on Groupon’s valuation and method of conducting business. If you have any concerns or questions relating to this matter, then please feel free to contact us.