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August 4, 2010
The facts contradict Groupon’s spin machine
Ah to be a 24 year old CEO of a hot company again. The mistakes I would not make… Well the CEO’s job is to be optimistic and put a positive spin on things to the press, but it is quite embarrassing when you get caught red handed with your staff contradicting you. Ok, now to the fun stuff, Groupon’s latest gaff.
Groupon has been in the news lately for forcing merchants into overselling their inventory and causing excessive strain on the merchant. MSNBC had something on this just this week. In that article, Mason says: “CEO and founder Andrew Mason of Groupon says the company explains the risk shops take when they sign on. It tells its 30,000 clients not to expect to turn a profit on the deals and suggests they limit the number of coupons they sell.”
While the head is spinning to the media, the body is doing something else. Below is an actual email to a merchant from a Groupon sales person. (Yes Mr. Lawyer I have the entire email if you want proof of authenticity).
Hi XXXX,
So the verdict is as follows, the city planner is uncomfortable with doing a main feature that isn't 50% off and has less that 1000 tickets to sell. It sets a precedent for other businesses to be loose with the numbers and we would prefer not to allow that.
Hummm. Sounds like the sales people are NOT letting merchants cap the vouchers they sell and are pressing them for steeper discounts than the merchant is comfortable with. Wouldn’t want to set a precedent of doing deals that are actually good for a merchant now would we? Unfortunately this heavy hand is becoming more the norm that I hear from merchants in the field.
And yes again this week two merchants that we featured on Tippr were contacted by Groupon lawyers and threatened with law suits for running a promotion on Tippr after running on Groupon. Their lawyers are very aggressive enforcing the often overlooked exclusivity clause in the Groupon contract. No Tippr doesn’t have an exclusivity. That is bad for merchant. Why would we want to limit the ways our merchants can advertise?
I sincerely hope Groupon continues to annoy merchants like this. It is good for Tippr.
Posted by Martin at August 4, 2010 1:24 PM
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