When rebrands go wrong

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Groupon sits out daily deals code of conduct

The fledgling daily deals sector has launched a code of conduct in a bid to arrest growing concern over the misleading marketing practices employed by some in the sector. However, the sector’s biggest player Groupon has not signed up.

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The code, which can viewed in full here, covers six broad areas:

  • Clear, accurate and honest communication with merchants and subscribers
  • Ensuring appropriate policies and procedures are in place and accessible on the main website.
  • Refraining from advertising prohibited items
  • Ensuring all commercial electronic messages comply with relevant legislation.
  • An easy to understand refund policy
  • Clear and effective procedures for handling complaints

Industry trade association the Global Daily Deal Association (GDDA) hopes the voluntary, self-regulatory code will promote “fair, honest and ethical best practice” in the industry in a bid to “improve its reputation with both consumers and merchants”.

Perception has been hit by a string of recent high profile cases of misleading practices. Most notably, Groupon, which was earlier this year ordered to change its marketing practices by the Office of Fair Trading after attracting hundreds of complaints about its promotions.

Despite this, Groupon has decided not to sign up to the code. A spokeswoman says: “We take customer and partner satisfaction very seriously and support the concept of a global code of conduct. Any code needs to be robust, enforceable and ensure the highest possible protection. At Groupon we are constantly improving our standards and approaches to lead the industry in ensuring the best possible levels of partner and customer service.

“We will be continuing our engagement with regulators, retail and consumer organisations. We welcome these types of initiatives and will evaluate them on an ongoing basis.”

Just a handful of services have signed up to date - DiscountVouchers.co.uk, Time Out Offers, MumsandMe and DealCollector in the UK and Dailydeal.de, Sweetdeal and Bownty elsewhere in Europe. The GDDA is hoping that more will sign up over time.

Sanctions for breaking the code are limited by its voluntary nature. Signatories breaking the code and subsequently failing to address breaches could be forced to withdraw from the agreement. Complaints could also be forwarded to the relevant advertising or competition authority.

Stavros Prodromou, CEO of the GDDA, says: “The GDDA has spent a great deal of time producing a Code of Conduct that is suitable and relevant to the industry. The sector has previously been affected by a lack of merchant and consumer confidence. The code is the first step toward improving the sector’s reputation.”

Readers' comments (5)

  • You would have thought Groupon would be at the forefront of such an initiative. However it appears that as in most industries, the big boys think they are too important to mix with the minnows. The sad fact is that it needs their presence for it all to be effective.

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  • Great to know that daily deal sites are being regulated, if only to increase trust and loyalty between consumers and their suppliers.

    I run a site that offers deeply discounted deals for parents and their families www.minisocial.co.uk and although we have a strong following and a loyal audience, the likes of the 'bigger' players who's reputation paints them as an acquisition business, can tar us all with the same brush.

    We welcome every new email with clear, honest and accurate communication, great products that ordinarily would cost much more. I for one welcome this code and will be signing Mini Social right up.

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  • This lack of engagement just confirms my misgivings about the Groupon Offer and Ive put them on spam filter too now as too many emails anyway

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  • In general the daily deals model has some major flaws – they give everyone 50% off to try to build word of mouth marketing – but the reality is that you could get so much more if you focused the largest discounts to the biggest social influencers. Check out SocialLadder – an iPhone based platform that recently did a soft-launch. They have a platform that allows local merchants to post offers and target those offers directly to social influencers. This is the new way – the more influential you are, the bigger the discount.

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  • Groupon has gotten a lot of bad press lately – the reality is that the model doesn’t necessarily make sense. Why give everyone 50% off? Why not give the top social influencers 90% off and give everyone else 10-20% off? That’s the model behind SocialLadder an iPhone based platform that recently did a soft launch. They’re available in the iTunes app store and going gangbusters…

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