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Groupon given legal reminder

Daily deal site Groupon risked breaching consumer laws when it told a customer she wasn’t entitled to a refund for a spa voucher after she discovered the spa was operating without a health licence.

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Trudy McLauchlan bought the Groupon voucher for herself and her mother for a three-hour “pamper package” at Auckland’s Lotus Body Clinic, which advertises its premises as being like “a five star hotel”. The $129 package included a sauna, spa, facial, massage and a glass of sparkling wine. But Trudy and her mother left the clinic after using the sauna.

“There was hair and other dirt on the floor of the sauna, cigarette ash on the table in the waiting room and mould in the lockers where we were supposed to put our clothing,” Trudy said.

She made a complaint to Auckland Council about hygiene standards at the spa. The council confirmed Lotus Body Clinic didn’t have a health licence, a requirement of Auckland’s Health and Hygiene Bylaw. The council said its investigations did not find “any major hygiene issues”. But the company was asked to lodge an application for a health licence. An application is being processed but it can’t be issued until the building’s owner pays required fees for a code of compliance certificate.

Trudy asked Groupon for a refund but the company declined her request. As a gesture of goodwill, it offered her $65 in Groupon credits to purchase another deal from the site.

But our consumer adviser Maggie Edwards subsequently contacted the company, pointing out its obligations under the Consumer Guarantees Act. “The Act requires companies to carry out their services with reasonable care and skill. At a minimum, we’d expect a daily deal site selling spa vouchers to check the spa was licensed under relevant public health bylaws,” Maggie said.

Groupon has since apologised for the inconvenience caused to Trudy and provided a refund. It said it takes consumer rights very seriously. “It is with regret in this instance our customer’s expectations were not met,” a Groupon spokesperson said.

Lotus Body Clinic defended the condition of its premises. It said the sauna is cleaned daily and handbasins washed twice a day. In regard to the cigarette ash on the table in the waiting area, the company said it could not have been there for long as tables are cleaned regularly.

Legal rights

The Consumer Guarantees Act gives you protection if you buy vouchers from daily deal sites. If there’s a problem – a service wasn’t as expected or a product is faulty – you can ask the deal site to put it right. Traders who mislead you about your rights risk breaching the Fair Trading Act.

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