Groupon, the daily deals startup that famously turned down a $6 billion acquisition offer by Google, is facing a potential class action lawsuit that alleges the company of selling coupons with illegal expiration dates.
The lawsuit has been filed in the US District Court by Eli R. Johnson on Tuesday, reports the Chicago Sun Times. The suit cites an amusement center deal published by Groupon that expired within months of its purchase.
Johnson purchased a coupon from Groupon for the Whirlyball amusement center on August 15. The coupon priced at $55 was valid for up to 10 people and had an expiration date of Feb. 16.
The Credit Card Accountability Responsibility and Disclosure Act prohibits companies from selling gift coupons with expiration dates of less than five years. Johnson cites, this Act in his lawsuit to claim that the coupon issued by Whirlyball and Groupon had an illegally short expiration date.
Groupon was reached for comment but declined to do so due to the pending legal action.
It is worth noting that Groupon has previously been sued for similar reasons in 2010. However, back then Groupon was able to settle with the grieved customer out of court by offering a refund on the coupon.
Meanwhile, Groupon’s lead in the daily deals market continues to erode in Japan. According to stats released by Coupon.jp, a Japanese based research organization, Pompare the No 2. daily deals site in Japan now commands 70% of Groupon’s sales, up from 50% back in January and 33% back in December 2010.
The Osechigate incident dented the entire daily deals market in Japan, with sales across the daily deal sites declining by 16% during the month of January 2011, compared to Dec, 2010. However, Pompare seems to be recovering quickly from the incident at the expense of Groupon.