Your Groupon didn’t really expire like you thought it did

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Group-buying websites have been all the rage on the Web in recent months, as I noted in a recent ‘On the Media’ column.

The latest buzz surrounded Living Social’s half-off sale--a $20 Amazon.com gift card for $10--that had been purchased by more than 1 million people as of Wednesday evening. And that was with 12 hours still remaining for more people to sign up.

That amounts to Amazon preparing to shell out at least $20 million in merchandise, while customers pay just $10 million. Sounds like a bad deal for the online super-mart, even worse when you consider that Living Social typically takes 30%.

But Amazon has a substantial investment, $175 million, in LivingSocial. So there’s some mutual back-scratching, and audience-building, going on here.

The biggest lesson I’ve learned writing about social-purchasing websites in the last couple of days is that their followers can be fanatical. Some sign up for deal after deal, even if they might not have time to use all the discounts.

The second biggest lesson is that fans don’t completely understand what their rights are, at least in one regard.

I talked to several Groupon users who said they had bought so many of the site’s discount coupons that they had failed to spend some by the designated ‘expiration’ dates. They believed that they had lost their investment.

But as I suggested in the ‘On the Media’ column, that’s not necessarily true. A new federal law requires the certificates be redeemable for up to five years, while many of the discounts are only said to be good for a matter of months.

Groupon spokeswoman Julie Mossler e-mailed me that it’s unclear which state regulations should be applied to Groupon’s activities. ‘Gift card law is more stringent, so that’s what we follow and ask our merchants to abide by as well,’ she said.

Mossler also suggested that the Chicago-based company follows Illinois law, ‘the strictest in the country’ in an attempt to give the greatest protection to consumers. She said that meant the company suggested its business partners honor its deals for five years ‘to be safe.’

The problem with that is that California law dictates that the coupons (if gift card rules are applied) are redeemable for a bit longer. Something closer to...forever. Gift cards in the state can include no expiration date, according to Russ Heimerich, a spokesman for the California Department of Consumer Affairs.

Heimerich said the coupons printed out by Groupon users (and customers of other group-selling sites) should be honored for their full value even after the printed expiration.

Another fact that merchants and customers might not know about the online discount deals: California regulations require that certificates with a value less than $10 should be refunded in cash, if that is what the consumer demands.

Many buyers have doubtless been to shops and restaurants that want to return the ‘change’ from the unused portion of a Groupon or other gift card only in the form of a voucher. But rules on the Department of Consumer Affairs website specify that customers who want amounts under $10 back in cash should get it. (Actually the regulations also allow the merchant to give the change via check, though I’m not sure why they would want to do that.)

So for all those zealous buyers who think they blew it and waited too long to cash in: you didn’t! And for Groupon, which has shown good faith in other disputes: Why not just ditch the expiration dates altogether?

--James Rainey

--Twitter: latimesrainey