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March 3, 2011

How to NOT get handcuffed by your Daily Deal Partner

A Daily Deal promotion is basically a marketing tool for merchants.  One of many including advertising, PR, coupons, word of mouth, reviews, directories, and other ways a merchant can use to attract and retain customers.  America is generally a free market where the best can win.  Basically all marketing platforms are competing for a merchant’s budget and may the best man win the business.  In that spirit, any restrictions on a merchant’s ability to try all the options are amount to a restriction of trade, are merchant un-friendly and harken back to the bad old days of monopolies. 

In the Daily Deal space, I am constantly surprised by the outrageous restraint of trade attempts made by some vendors.  I can only think that those who practice exclusivity and heavy handed tactics are hoping merchants don’t read their contracts.  Here are a couple of “gotchas” that you should look out for in some of the OTHER guy’s contracts.  This is actual contract language from a Groupon contract.  I have heard that merchants can negotiate these provisions if they know they exist.  I recommend you do so all your options promoting your business can be on the table.

Groupon has 90 day LOCK UP.  You can’t promote your business with any other deal site for 90 days.  At Tippr we do not restrict your ability to market your business.

image

 

Groupon holds your money for up to 60 days.  What isn’t a Billion dollars enough?

groupon payment terms

Groupon tries to muzzle their merchants and asks for “injunctive relief” if merchants talk about their Groupon deals.  That is not very friendly.

groupon confidentiality

 

The bottom line.  Read your Daily Deal contract.  Object to anything that limits your ability to market or operate your business.  Don’t get muzzled or hobbled.

Posted by Martin at March 3, 2011 12:40 PM

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Comments

Thanks Martin, this is an interesting series of posts on Groupon and the daily deal legal world.

I'm wondering how long before we are seeing a major tortious interference vs. restraint of trade lawsuit that goes to the supreme court...because in reality Groupon is pretty agressively limiting fair competition in an area where they are adding, really, very little value. To lock up small local merchants for 90 days or 2 years is pretty questionable, again when you consider the differing size of the competitors.

Going to Google the Platinum Agreement and see if anything else came out about it.

Posted by: Tom Lemonskicz Author Profile Page at March 22, 2011 1:22 PM

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