When Businesses Hurt Groupon

In a recent daily deals mishap, Groupon may have actually not deserved the flack it got for a deal gone wrong. 

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In a recent daily deals mishap, Groupon may not have actually not deserved the flack it got for a deal gone wrong. Over the months, Groupon has gotten criticism for hurting, rather than helping, businesses. But the assumption that's always the case may have gone too far in a story reported by The Telegraph today alleging that Groupon sent out a non-existent deal for a train ride leading thousands of Groupon holders to show up, insanity to ensue, and one angry elf to quit. On the surface, Groupon looks at fault and it sounds like the another Groupon-isn't-so-great-for-merchants-story we've heard before. But it turns out Groupon wasn't totally in the wrong. This time it may have been a business that hurt Groupon.

As The Telegraph tells it: Last weekend in York, England, a Groupon deal for a train ride at the Winter Wonderland's Christmas grotto, presumably what we in the U.S. would think of as a Santa mall attraction, resulted in 2,000 customers showing up demanding a discounted train ride. The grotto, only prepared for 40 children an a hour, claimed they never signed up for the deal. The story then follows the traditional Groupon-deal-of-horror path. Overwhelmed, the staff worked over-time without breaks to fulfill customers wants. And in this tale, we get a twist: Swearing and an upset elf.

Giving its side of the story to Business Insider's Nick Jardine, which the company also confirmed with us, Groupon claims that the grotto had in fact verbally agreed to the deal. "Our voice records indicate that the owner did authorize the contract over the phone," Groupon's Heather Dickinson told us. "She was having difficulty completing the Echosign, which is the electronic signature tool we use for contracts, so she confirmed that she was happy to run the deal the following day." Even though the company apologized for the Groupon in The Telegraph, Groupon tells us the paper reported it before Groupon had a chance to send it the voicemail it shared with Jardine revealing a verbal agreement between the grotto and the deal site. Groupon also says it even offered the grotto a cap on the number of participants, which the grotto did not accept.

Many of the angry businesses complain that the coupons overwhelm the companies with orders, causing a diminished product (or experience) and often-times leading to lost money on the deal, for over-worked employees and such. Yet, in this instance, and presumably others, Groupon offered coupon caps. Perhaps over-zealous companies don't accept said caps, eager to gain as much as possible from the deal.

The daily-deals site representative offered alternative reasons for why the grotto may have been overwhelmed, suggesting that some customers came separate from the promotion. And as the rep pointed out to us, the grotto's site had a picture of a Santa Riding a train, so why wouldn't it provide rides? In any case, the grotto has no hard feelings. Dickinson tells us that the company has since run another deal with Groupon.

This article is from the archive of our partner The Wire.