Group buying company LivingSocial has disappointed thousands of customers after warning it could be several weeks before they receive a pair of thongs purchased in a highly successful deal run two months ago.
The incident has sparked a furious response from the New South Wales minister of Fair Trading, who has said the department will be monitoring the activity of group buying sites.
It is not the first time a group buying site has been hit with similar issues. Some businesses have said they have sold too many coupons through group buying deals to keep up with demand, with reports suggesting that in some instances customers have been turned away when they have tried to redeem discounts.
The LivingSocial deal has prompted angry backlash from customers, many of whom have taken to internet forums to express their disappointment.
Jump On It, the local partner of LivingSocial, along with the offices of OzThongs, were contacted by SmartCompany this morning, but no reply was available prior to publication.
The offices of New South Wales Fair Trading Minister Anthony Roberts were also contacted, but no reply was available. However, Roberts has issued a stern warning to group buying sites after learning of the deal.
”I am warning people to tread very carefully with these sites, because if you buy something on the spur of the moment you might not get what you were expecting,” the Minister told Fairfax.
Adam Schwab, co-founder of Deals.com.au, says that although these incidents do happen from time-to-time where deals are oversold, they have become much less common.
“We saw this becoming an issue last year, and I think companies have really tightened on that lately. Ultimately, it comes back to the deal and whether people can be offered a refund,” he says.
“I’ve had arguments with some businesses when we say we want to cap the deals.”
Some group buying sites have been caught out after selling too many deals. Late last year Cudo chief executive Billy Tucker announced his decision to wind up a deal offering cheap cupcakes after receiving “phenomenal” demand.
Some businesses, such as OurDeal, have actually capped deals at a certain level so they can be sure to not oversell anything.
“Ultimately, the buck stops with us,” Schwab says. “And if you buy a voucher you’re covered.”
LivingSocial has said in a statement that it is “concerned” some customers are unhappy”.
“As per our policy, are prepared to fully refund … should they want to cancel their purchases for either the first or second deal,” the company told Fairfax.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
