LOUISVILLE, KY (WAVE) - From dinner to dental, photo shoots to fabric - it's all on sale and all a mouse click away at websites like www.livingsocial.com and www.groupon.com. Zach Everson bought a Groupon for a yard clean up in March.
"You know $99 for someone to do $250 worth of yard work and me to not to have to do it at all? Perfect," Everson said.
But Everson said the company, Exterior Services, LLC, never showed up to do the work.
"We followed up half a dozen times on email half a dozen times on phone," said Everson. "Usually leaving messages, not getting a response."
Everson wasn't alone. 293 people got the landscaping deal and many of them took to Groupon message boards to complain. One of those people was a woman named Kimberly who wrote the following:
"This guy is a RIP OFF!! He made 4 appointments and no show no call. I have asked for a refund from him and he won't give it."
But Everson didn't want a refund as much as he wanted the company to honor the Groupon.
"I wanted someone to do the yard work, you know?" Everson said.
Everson eventually gave up and got his money back directly from Groupon. After we started our investigation Groupon even posted an apology and offered refunds to other customers who couldn't get Exterior Services to honor the deal. The news came as no big surprise to Charlie Mattingly, CEO of the Louisville Better Business Bureau.
"On the whole, in this case the business seems to have failed fairly substantially," Mattingly said.
The BBB gives Exterior Services an "F" rating.
"We've had a number of complaints about them preceding the Groupon offer," Mattingly said.
In a phone interview, Randall Rogers of Exterior Services admitted the Groupon experience "was a mess." Rogers said Groupon told him to expect 20% of people to redeem their Groupon in the first month. Instead, he says more than 80% called in the first two weeks. Rogers said his crews also lost a number of work days to inclement weather, and workers couldn't catch up.
"We did all we could," Rogers said. "There was nothing else we could do. We worked seven days a week until dark. We run an honest business. We do everything we can to make our customers happy."
But Mattingly said considering Exterior Services is a landscaping company and the Groupon was offered in the spring, they should have been ready for the rush.
"I certainly would not take the business off the hook for that," said Mattingly.
Yet three months after its Groupon gone wrong, Exterior Services is back at it again. They offered a new deal, this time on Groupon's competitor website, Living Social. Rogers said that deal was set up months ago, they'll try and do better this time around.
With both companies, businesses like Exterior Services only keep about half the sales. The rest goes to the websites.
"Looking at it from the landscape guys perspective he's getting $50 for doing these," Everson said. "That's not a whole lot of financial incentive to do four hours worth of yard work."
That leaves Everson questioning whether the specials are really a good deal.
"That's clearly the Groupon model is they print these out and they hope people don't fulfill them," said Everson.
Mattingly said the BBB has received a handful of reports about other businesses that also failed to follow through on Groupon's. But in a statement, Groupon spokesperson Kelsey O'Neill said the Exterior Services problem was an isolated incident. Here's the company's statement:
Due to inclement weather conditions in Louisville this spring, a number of Groupon customers needed to cancel and reschedule appointments with Exterior. Any customer unsatisfied with this situation was able to contact Groupon for a full refund (as did Zach Everson). Groupon customers are always backed by the Groupon Promise - if a we or a merchant let you down, or it's impossible to redeem your Groupon, we will return your purchase. Groupon's internal team had been investigating this deal prior to your email; due to the number of customer issues, we have issued a mass refund for the offer. All purchasers were notified this week and the text is below.
At the time of our contract with Exterior, the business didn't have any BBB ratings but Groupon used other sources of reference as part of the eight-to-13 layer vetting process through which we screen all merchants. There are many ways to determine the quality of a business, and the BBB isn't always a hard rule - some of our customers' favorite businesses do not have BBB ratings, and many poor-quality merchants aren't registered there either. Groupon runs more than 500 deals per day in North America with less than a 3% return rate. This incident is not the norm.
To make sure you don't end up in the same situation, the BBB suggests:
- Check out a company before you buy their Groupon or Internet special
- Read the fine print on the offer and make sure you can actually use the special
- Sign up for services immediately
Remember, other people are buying the same special and will want their deal honored just as fast as you do.
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Copyright 2011 WAVE News. All rights reserved.
Zach Everson
Charlie Mattingly
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