Group buying sites

Should you be wary of group-buying sites?
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03.When good deals go bad

Despite better quality control measures being in place to weed out problem merchants along with financial incentives to encourage good behaviour by merchants, CHOICE members still report problems involving group buying.

Andrea Sturgeon contacted us regarding dodgy dealings with OurDeal and merchant Town & Country Mattresses and Beds. Andrea had purchased a deal for two memory foam pillows, which were advertised as medium to firm density, top-of-the-range products. 

The pillows arrived two months after the deal was purchased, and were posted loose, not covered in plastic, and without any branding or information.


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“One of the pillows was a [yellow] colour and smelled strongly of mould,” Andrea says. “The pillows were not medium to firm as advertised, and were a very cheap standard, certainly not worth the $210 value advertised. There was also a gift voucher in the packaging that had already expired, just to rub salt into the wounds.”

Upon requesting a refund from OurDeal, Andrea was told to contact the merchant, who refused the request. “I’m appalled that consumers can be told flatly they cannot have a refund for a faulty product.”

Jones says OurDeal is ultimately responsible for this issue. “They’re not at liberty to say that it’s someone else’s fault. All the representations about quality lie at the feet of OurDeal. Group-buying sites are exactly the same as bricks-and mortar retailers in this respect. They’re not just brokers, they’re the people doing the deal with the customer, who [in this case] certainly has a right to receive a product that’s new, wrapped, and moderate to firm."

“There are plenty of complaints like this. The smaller companies believe they’re just providing a website portal for people, but that’s not the case.”

Making complaints

According to industry sources we spoke with, sites are now much more amenable to issuing refunds than they have been previously. “We’ve realised that if you don’t give a refund and the customer wants one, they’re going to get one anyway by going through Fair Trading,” says Borenstein. “So if someone really feels they’re entitled to a refund, you might as well prevent additional frustrations for everyone.”

NSW FT has a high success rate in the group-buying arena according to Jones. “Something like 96% of complaints to us are resolved within 30 days by the group buying sites. As soon as they know they have a complaint with us, they escalate it.” 

If you have an issue with a group-buying product or service, it’s worth attempting to resolve the issue with the merchant first, although ultimate responsibility lies with the group-buying site. If the merchant is not cooperative, the next step is to seek redress from the site. In some cases they may attempt to negotiate with the merchant to reach a suitable resolution. Where this isn’t possible, they may either replace the deal with an equivalent one from another merchant, or issue a credit or refund.

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