How to Get a Groupon Refund When a Company Closes

By Julie Rains on 2 May 2011 (Updated 6 June 2013) 13 comments

What happens to a Groupon if the company offering the deal closes? And how do you get your money back? (See also: Selling Your Groupon Coupons)

According the FAQ page of the Groupon website, the guidelines are promising but vague:

What if the business for my Groupon closes down?

If anything happens that makes it impossible for you to redeem your Groupon, we'll make sure you get your money back.

I had not given this subject much thought until a few weeks ago when my inbox contained an email with this subject line:

“An Important Message Regarding Your ABC Bistro Groupon”

My husband and I had tried once to use the Groupon for this restaurant. We had called on a Saturday afternoon to check on seating availability and make reservations. But it was unclear why we could not reserve a table — either seating was available on a first-come, first-served basis or all tables were booked. When we stopped by to check, we found that all tables were reserved; we vowed to plan ahead for a future outing.

So, using the Groupon was still on my radar when the email arrived. This is the message I received:

We are writing to inform you that ABC Bistro has closed. While most of you have already redeemed your ABC Bistro Groupon, we know that some have not, and we want to get you your money back as soon as possible.

If you haven’t used your Groupon, please email us at support@groupon.com and we’ll be happy to issue you a full refund to your original credit card used for the purchase or give you Groupon Credit.

We were big fans of ABC Bistro, so we’re especially sad to see them go. We sincerely apologize for any inconvenience this may cause.

Thank you for your continued support.

I was surprised to learn that the restaurant had closed. ABC Bistro (not the company’s real name) had opened several months earlier and seemed to be doing well. It occupied a space in a new, pedestrian-friendly neighborhood shopping center in an area with a dearth of nice restaurants. On a nearly daily basis, I drove by this shopping center and had not noticed anything amiss. Nor had I heard about its closing from friends.

This note was the first indication that anything was wrong. In retrospect, though, the inability of the restaurant staff to communicate its reservation policy was an omen.

Groupon’s move was fast. The email was sent to everyone who bought the deal. I wondered if Groupon was in such a hurry to issue refunds (and preserve its integrity) that the deal-seller decided to notify all buyers first, get responses, figure out who had redeemed the Groupon and who had not, and then issue refunds or give credit.

How I Got My Money Back

  • I replied soon after getting the message that the restaurant had closed.
     
  • My email message: "Hi, I just got a note saying that ABC Bistro has closed; I had an unexpired coupon there. Can I get a credit card refund now? Please let me know if you need additional information from me."
     
  • Groupon support staff told me that my credit card account would be credited within 5–7 business days.
     
  • The refund transaction was initiated on the same day and the credit was posted in 3 days. 

Then I wondered:

Had Groupon (or I) acted too quickly?

No.

Soon after sending my email, I checked the restaurant's website and saw that it had been dismantled. Its Facebook page was still active. A status update indicated that the restaurant would be closed for a few days while some business issues were resolved. Since then, the restaurant has not re-opened and the Facebook page is now empty. In this situation, Groupon knew about the restaurant's status before everyone else in town did.

Do you use your Groupons immediately? Have you ever tried to use a Groupon but found that the company with the deal was closed?

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Guest's picture

We don't often use our Groupons right away. We do also use Restaurant.com, and I've had both situations where either the restaurant closed or they stopped accepting the certificates, and in both cases, Restaurant.com was happy to issue a credit.

Meg Favreau's picture

I also had a Groupon for a business that closed down, and I was impressed by how quickly Groupon refunded my money. It's always heartwarming to experience some good customer service.

Julie Rains's picture

I was surprised not only how quickly I got my money back but how quickly Groupon knew and then told people about the problem with the restaurant. And, yes, I guess I am surprised and heartened when I get good customer service.

Andrea Karim's picture

I can't believe that Groupon drove another bistro out of business!

Julie Rains's picture

Yeah, you never know exactly what happened. The owner ran another restaurant downtown that closed a while back but it was in one of those should-be-great but revolving-restaurant-door locations. Other places in my area seem to be doing fine with the promotions but businesses do need to be careful about making too many deals in order to get customers.

Guest's picture

Groupon is not to blame. It's a classic case of careless business owners not thinking things through and "biting of more than they can chew". (pun intended)

Business aren't forced to sign up for Groupon, they do it willingly.

Julie Rains's picture

Thanks for sharing your experience not only with Groupon but also with restaurant.com. Many of the restaurant gift certificate programs in my area have been offered by restaurants that seemed to be having financial troubles so I had never bought from restaurant.com; it's good to know that they honor their certificates

Guest's picture
Guest

I am still waiting to get refunded by Groupon. They have a 24 hour response time stated, but all I got was an email stating they were too busy to respond for 4 days straight, then nothing. I have emailed Groupon back and have yet to get a reply. Its no wonder their stock tanked a few days ago on the 'abnormal amount of refunds' the company is seeing. Get your cash back while this fly by night is still around.

Julie Rains's picture

Sorry to hear about your experience. If you paid with a credit card, a good Plan B would be to contact your financial institution, which may be able to either contact Groupon on your behalf or dispute the charges.

Guest's picture

I had the same experience this week! (your restaurant wasn't in Ottawa by any chance, was it??)
I went to use the Groupon and discovered the restaurant was closed down, emptied out, and the sign was blacked out. I emailed Groupon to ask for a refund... but they only offered me a credit of "groupon bucks".

I accepted the credit - not realizing that a credit card refund would be possible.
darn it!

Guest's picture
Isabel Laurens

I had the opposite experience with Groupon - I purchased one for a restaurant I had been to before. Unbeknownst to me it had closed for business (why Groupon was still selling certificates to a closed business is troubling). That same day I tried to make reservations and found out. I contacted Groupon immediately requesting a refund, and for 2 weeks they gave me the run around, "we're working hard to get this resolved.., etc". It was my understanding that within 7 days you can get a refund for any reason, and there I had contacted them within 1 day to inform them the business closed and instead of giving me a refund they gave me "groupon bucks". No way. I had to file a complaint with the BBB - Groupon has an A rating and doesn't want that tarnished. I got a proper refund to my credit card within one day. I'm posting this so if anyone else gets the run around when requesting a rightful refund, you can always file a complaint with the BBB and Groupon will comply or their rating will suffer.

Julie Rains's picture

Thanks for sharing your experience.

I have heard since I wrote this article 2 years ago that some things have changed though I haven't had problems recently (most likely b/c I have purchased deals for more established companies). It's helpful to keep up to date on the terms of service as well as hold Groupon accountable for their deals as you mention. If you happen to buy the Groupon with a credit card, your issuer should also be able to help you get a refund.

Guest's picture
Bob

A restaurant closed down and when I contacted Groupon for a credit they wrote me back stating that I should sue them (Groupon). Can anyone believe that!? When contacting them by phone they maintain this. The restaurant was in Los Angeles. It seems Groupon is hurting so much they might go out of business as they now have turned a nasty corner.