Groupon's FTD Failure a Valentine's Day PR Nightmare
By Mir Kamin on February 17, 2011
BlogHer Original Post
If you love saving money, chances are that you -- like me -- viewed Groupon's arrival on the frugal scene with initial suspicion that gave way to complete and unabashed devotion. Half off places you'd shop anyway? There's nothing wrong with that, except when, well, there are things wrong with that.
Groupon's first foray into a national (rather than geographically targeted) deal was this past August, when the course of couponing wasn't so smooth: their servers buckled under demand for a $50 Gap coupon. Despite the problems inherent with such a popular deal and people complaining about difficulties getting the site to load, Groupon obviously felt the deal was ultimately a success. This was the beginning of more and more national deals through Groupon, which of course meant more traffic, more sales and more demand. All good news! Of course, there was the Japanese New Year's deal gone wrong, for which Groupon's CEO personally apologized and purchase prices were refunded. But still consumers remained loyal. Why, even their completely tasteless Super Bowl commercial was not enough to dampen the Groupon love.
The story is simple, but unfortunate: Groupon offered $40 to FTD.com for just $20, and -- the timing was no accident -- it could be used in time for Valentine's Day. Perfect! Rather, it should've been perfect, but unfortunately customers ended up feeling duped:
The problem surfaced when several Groupon customers found the flowers they bought were priced lower as sale items on FTD's own website. They complained on the Groupon site and the Internet that FTD was making up for the Groupon discount by jacking up the prices.
But FTD Group Inc. President Rob Apatoff said in an interview on Sunday that wasn't the case. He said it was clear on the sites that the coupon didn't apply to sale items.
Still, Apatoff said the Downers Grove, Ill., company will credit the customers' accounts to give them the sale price, even if they don't ask for it. Both companies also say they will make full refunds if people aren't satisfied.
The good news is that both FTD and Groupon appear to have done their best to soothe unhappy customers. The bad news is that they should've seen this coming and avoided the problems in the first place.
I'm a confirmed bargain hound, myself, and I promote Groupon on my shopping site regularly; I think they're a great resource for saving money and that many of their deals are outstanding. In fact, let me go all full disclosure here and tell you that I am an affiliate with both Groupon and FTD. But I'm unhappy with both companies over how this went down, though for different reasons.
FTD's failure was in setting up a separate link for Groupon redemption. This was done, I'm sure, because they wanted to be certain that the Groupon wasn't combined with any other promotions. Sure, from FTD's point of view it made sense, but it looked like a scam because FTD is one of those sites always having a sale. My affiliate links offer various dollars off or percentage off offers all the time, as do everyone else's links. You would actually have to try really hard to find a way to access their site and not have some sort of special offer activated. So while FTD clearly had someone, somewhere, in a corporate office, thinking this was clear and not a big deal, from the consumer's point of view, it looked like a price hike. They can call it what they want, but it was indeed higher prices when working with the Groupon. That feels sleazy, even if you believe that FTD "didn't realize" it would.
Groupon's failure was in not thoroughly vetting how the deal would be carried out. If I had to divide up the blame like a pie, I'd give a much larger wedge to FTD, but regardless of how Groupon scrambled to keep their customers happy (and they did), they still get a slice or two for not setting up the deal in a way that headed off these problems before they happened. While FTD looks sleazy, Groupon -- at best -- looks disorganized and unprepared.
DailyDealMedia's Kris Ashton says Groupon needs to learn from this and their earlier problems:
In defense of Groupon, it’s almost impossible for them to control an unscrupulous merchant. In the case of the Japanese restaurant, they did have a cap on the number of coupons sold, but it was still too many and whether Groupon is directly at fault or not, a bad deal is always going to reflect on them. Unless Groupon can find a way to better control the entire coupon process from start to finish, the FTD fiasco isn’t going to be the last not-so-sweet deal we hear about.
Brandy from Not Your Average Soccer Mom bought the FTD Groupon and used it to send some flowers to (I think) her son's girlfriend while he's away at boot camp. But FTD failed to deliver the flowers she'd already (over)paid for! She had problems with FTD's customer service, too, though the flowers were finally delivered the following day (and her local florist refunded her money, as well):
It's disappointing that a large establishment like FTD.com doesn't care enough about their customers to fulfill their end of a transaction and when a problem occurs, they do not care enough correct it.
On a brighter note when I called Groupon to express my frustrations my call was immediately answered by a nice man in Chicago. He didn't handle me like a number, but conversed with me like a customer. He may have said the same apologies as FTD but sometimes it's more about the delivery than the words.
And over at FloristNewsRoom, Deborah scolds FTD but also points out that Groupon is in danger when problems like this arise:
For Groupon to continue to grow they need to get more big national advertisers, and those advertisers need to not be screwing around with customer trust. The Gap campaign was well handled. This FTD “deal” wasn’t.
Sour deals like this hurt Groupon’s brand, because burned customers won’t be so eager to check out the new daily deals. They’ll just assume it’s a scam, and ignore it all. Just like those HUGE SALE! signs in the window at your favorite retail store.
Did you buy the FTD Groupon? Whether you did or not, does this story change your opinion of them?
BlogHer Contributing Editor Mir Kamin is a fool for online shopping deals. She blogs near-daily about issues parental and otherwise at Woulda Coulda Shoulda, and all day long about the joys of mindful retail therapy at Want Not.
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