Jessica Gardner Reporter

Jessica covers Australia's technology start-up scene, writing on breaking news and trends in entrepreneurialism, media and marketing. She was previously named Australia's best New IT Journalist for 2011.

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Who is at fault when group buying goes wrong?

Published 28 November 2011 12:31, Updated 08 December 2011 05:17

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I love a bargain. I’m also pretty time-poor. While I don’t yet have the excuse of a horde of kids to ready each day before I get to work, I do have a fairly demanding extra-curricular schedule outside of the 9 to 5 (or 8 to 8 on a bad day). And to top it off, I don’t love shopping. It’s part frugality but also part allergy to fluoro-lit, busy shopping malls. One outcome of these characteristics is that Christmas shopping is a pain.

So when a LivingSocial group buying deal popped into my inbox in August offering two pairs of Havaianas thongs from online retailer OzThongs for $26 I jumped at the chance to knock off some presents for my younger sisters. Unfortunately for me and many others (49,233 vouchers were sold), the thongs never came. The deal is now cancelled. LivingSocial has offered refunds or where customers prefer, it is trying to source the thongs.

I wrote an article about the deal last week – Flip flop flap. I received lots of feedback about the article and a common theme is that when a deal goes sour, although it is often the vendor that cannot keep up with demand, it is often the group buying website that cops a lot of the flack.

Consider this comments from a reader. “I can’t believe LivingSocial were duped... [although] if they want to run a successful business they certainly need to do their due diligence,” wrote the young man.

Many were keen to share their experiences with other deals from group buying websites that didn’t live up to their expectations.

One Sydney man wrote of a “terrible experience” with a car wash deal. Although this customer’s main complaint was with the vendor, he believes the website selling the deal was at fault, too.

“When I contacted the group buying company (LivingSocial I think) about my particular issues with the vendor, they listened and were good enough to refund/credit me in terms of their ‘deal bucks’,” he says. “However, what really annoyed me was that they continued to offer similar deals from the same vendor. I use these group buying sites quite a lot now and I like them. However, I personally believe they have a ethical responsibility to their customers and their industry to make sure they are dealing with reputable vendors. As consumers, we quickly wise up and will start to avoid this industry if they will not change.”

It’s not just LivingSocial which has had problems with deals. A Sydney woman bought a Groupon offer for a restaurant in the suburb of Glebe.

“By the time I tried to book a week before [the] end of validity, the phone number wasn’t working,” she writes. “[I] sent an email which was replied to a few days later – restaurant had renamed, different menu etc. When I responded and asked if they would honour the voucher – heard nothing more.”

For me, the Havaianas and OzThongs deal is an inconvenience (and an interesting story). I probably never would have bought from OzThongs before knowing about the deal and I certainly wouldn’t now. It won’t stop me buying vouchers but it will make me think twice about some “too good to be true” deals and in this regard I agree with many of the consumers who have written in with their feedback: Although the vendor is the party that has to fulfil the orders, the group buying website has the most to lose. It’s in their interest to do due diligence and make sure things go smoothly. I think LivingSocial has learnt this lesson.

Do you agree? Write and tell me your views.