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Groupon, Inc. is an American global e-commerce marketplace connecting subscribers with local merchants by offering activities, travel, goods and services in 13[2] countries. Based in Chicago, Groupon was launched there in November 2008, launching soon after in Boston, New York City and Toronto. By October 2010, Groupon was available in 150 cities in North America and 100 cities in Europe, Asia and South America, and had 35 million registered users.[3][4][5][6] By the end of March 2015, Groupon served more than 500 cities worldwide, nearly 48.1 million active customers and featured more than 425,000 active deals globally in 48 countries.[7][8][9]

Key Information

The idea for Groupon was created by former CEO and Pittsburgh native[10] Andrew Mason.[11] The idea gained the attention of his former employer, Eric Lefkofsky, who provided $1 million in seed money to develop the idea. In April 2010, the company was valued at $1.35 billion.[12] According to a December 2010 report conducted by Groupon's marketing association and reported in Forbes magazine and the Wall Street Journal, Groupon was "projecting that the company is on pace to make $1 billion in sales faster than any other business, ever."[10]

In its first earnings release as a public company, Groupon reported a 2011 fourth-quarter loss of $9.8 million on an adjusted basis, disappointing investors.[13] Additional investor concerns arose after the company restated 2011 revenues downward in March 2012.[14]

As of 2024, Groupon operates with a leaner workforce and has shifted focus to digital vouchers and services after discontinuing much of its physical goods segment.

History

[edit]

The idea that would eventually become Groupon was born out of founder Andrew Mason's frustration trying to cancel a mobile phone contract in 2006. Mason thought that there must be some way to leverage the collective bargaining power of a large number of people. In 2007 Mason launched The Point, a web platform based on the "tipping point" principle that would utilize social media to get people together to accomplish a goal. The Point was intended to organize people around some sort of cause or goal. It gained only modest traction in Chicago until a group of users decided their cause would be saving money. They wanted to round up people to buy the same product in order to receive a group discount. Founder Eric Lefkofsky wanted the company to pivot in order to focus entirely on group buying. Born from The Point, Groupon was launched in November 2008.[15][16][17]

The name for the e-commerce platform, Groupon is a portmanteau of "group" and "coupon". Groupon's first deal was a two-pizzas-for-the-price-of-one offer at Motel Bar, a restaurant on the first floor of its building in Chicago.[10][18][19]

The decision to focus on group buying proved wise. In just a year and a half, Groupon grew from a staff of a few dozen to over 350. Revenue and bookings also grew swiftly, and the company was valued at over $1 billion after just 16 months in business, the fastest company ever to reach this milestone.[20]

Initial public offering

[edit]

On June 2, 2011, Groupon filed to go public under the ticker symbol GRPN.[21] The company went public on November 4, 2011, with its shares listed on Nasdaq.[22] It was the biggest IPO by an Internet company since Google in 2004.[23] The IPO was handled by Morgan Stanley, Goldman Sachs Group and Credit Suisse Group.[24]

On August 10, 2011, Groupon updated its IPO filing, after facing scrutiny from regulators and analysts over its use of a non-standard accounting metric called Adjusted Consolidated Segment Operating Income. Critics argued that ACSOI was used by Groupon to present a misleading metric of profitability. Groupon's original IPO filing with ACSOI accounting showed a positive operating income of $60.6 million for 2010; after replacing the ACSOI metric with standard accounting metrics, Groupon's IPO filing reported an operating loss of $420 million for 2010.[25] Prior to the IPO, some analysts criticized Groupon's decision to pay out over $940 million of the $1.12 billion in venture capital Groupon had raised before the IPO – over 84% of its venture capital raised – as cash payouts to its 3 founders and early backers, rather than into the company.[26] The large cash payout also made Groupon technically insolvent when it filed for its IPO.[27]

In 2012, it was noted that Groupon had lost 80% of its value since its initial public offering the previous year.[28] The stock had since rebounded and was trading around $8 in Q1 2015 before plunging as low as $2.15 in early 2016.[29]

2011 onward

[edit]

Prior to the company's fifth anniversary, the Groupon website was completely redesigned and new features were added in November 2013. According to the SVP of product management, the original website was "designed for a deal of the day and the new site is designed for a marketplace." Following the website relaunch, the company rewarded a random selection of one million customers on November 20, 2013, with up to US$5,000 worth of "Groupon bucks".[30][31]

Groupon recorded record-breaking holiday weekend sales in North America during the full (Black Friday through Cyber Monday) weekend of 2014 (Nov. 28 – Dec. 21), representing the most successful four days ever in the company's six-year history, with sales up more than 25% year over year. Black Friday and Cyber Monday were the two biggest days in Groupon's North American history.[32]

Following Amazon.com's December announcement on drone delivery, Groupon reacted with a plan for "Groupon catapults".[33]

On December 29, 2014, Groupon's shares rose by 1.4% after it was reported that Goldman Sachs was "weighing an investment in one of the daily deal company’s units."[34]

Groupon named a new Chief Operating Officer on June 2, 2015, Rich Williams and in November, Williams was named CEO.[35][36]

On September 22, 2015, Groupon announced they would be eliminating approximately 1,100 positions, primarily in their sales and customer service operations.[37] As part of this restructure, they would also be ceasing operations in international markets such as Morocco, Panama, Philippines, Puerto Rico, Taiwan, Thailand and Uruguay. Exiting those markets was part of a strategy to boost profits.[38]

In January 2016, Groupon signed a lease in Seattle for 42,000 square feet of space in the 1201 3rd Avenue building in downtown. This creates room for 400 employees, up from 300 that Groupon currently employs in Washington.[39]

In May 2016, Groupon sued IBM, claiming that IBM had infringed the patent of technology that allows solicitation of customers based on where the customers are located. Groupon filed the lawsuit shortly after IBM accused Groupon of infringement in a previous lawsuit.[40] In October 2018 the separate lawsuit was settled, with Groupon paying IBM $57 million to cover the infringement and licensing of four patents.[41]

In November 2016, Groupon began to reduce its area of coverage from 27 countries down to 15. It shut down operations in South Africa on November 4 of that year.[42]

In March 2020, both Groupon's CEO Rich Williams and Chief Operating Officer Steve Krenzer stepped down from their roles. Despite that, both of them still remain employed by the company, "The terms of Mr. Williams’ and Mr. Krenzer's separations will be disclosed as available and required". Interim CEO Aaron Cooper was replaced by Kedar Deshpande.[43] Dušan Šenkypl became the company's new CEO in March 2023. [44]

In June 2022, Groupon settled a class action lawsuit with a group of investors for $13.5 million. The agreement resolved claims that Groupon has misled investors.[45]

In December 2022, two beauty salons, Salon Phoenix Cosmetology in Hoboken, New Jersey and Salon Hairroin in Los Angeles, filed a class action lawsuit against Groupon, arguing that company listed them on their website without their permission, thus tarnishing their reputations and stealing organic search traffic from them.[46] In November 2023, an Illinois federal judge approved a settlement (preliminarily approved in August 2023) between the two companies and Groupon. That settlement benefitted more than 2.5 million small businesses. All class members were also able to ask Groupon to remove or edit company profiles and expired deal pages.[47]

Acquisitions and partnerships

[edit]

Groupon owns numerous international operations, all of which were originally deal-of-the-day services similar to it, but most of which was subsequently re-branded under the Groupon name after the acquisition, including the European-based MyCityDeal (May 17, 2010), the South American ClanDescuento (June 22, 2010), the Japanese service Qpod.jp and Russian Darberry.ru (both acquired on August 17, 2010),[48] and the Singaporean Beeconomic.com (November 30, 2010), which was founded by brothers Karl Chong and Christopher Chong.[49]

Groupon bought the Indian deal-of-the-day website SoSasta.com in January 2011 and re-branded it as "Crazeal by Groupon Inc."[50] The Groupon acquisitions of uBuyiBuy launched services under the Groupon name in Hong Kong.[51] In addition, Groupon acquired GroupsMore.com to expand its business in Malaysia.[52]

Prior to these acquisitions, Groupon had bought out the mobile technology company Mob.ly, while The Point, Inc., the predecessor to Groupon, bought the trademark[53]

On August 4, 2011, the company acquired Obtiva, a large Chicago, Illinois-based Ruby on Rails and Agile Software Development consulting firm for an undisclosed amount, in order to boost its technology recruiting capabilities.[54][55]

In January 2012, the company acquired Mertado, a social shopping service based on the Facebook platform.[56] In May 2012, Groupon acquired Breadcrumb, a point of sale system and iPad app that targets local restaurants.[57] Based on the May acquisition, Groupon launched Breadcrumb PRO and Breadcrumb POS, expanding its target beyond restaurants to include all types of local businesses.[58]

On September 24, 2012, Groupon acquired restaurant reservation and discount site Savored for an undisclosed amount, providing Groupon with an inlet to higher-end restaurants. Groupon also announced that it would continue to operate Savored independently from the main Groupon website.[59]

In December 2013, Groupon acquired Boomerang, a Lightbank-backed start-up that allows people to share gift cards and other deals from local merchants with their friends.[60] Boomerang's two cofounders, Zachary Smith and Matthew Williams, along with eight employees went on to build a new digital-coupon offering, called Groupon Coupons.[61]

On January 11, 2013, Groupon acquired real-time location sharing mobile app and small business service provider Glassman, which was founded and led by Geoffrey Woo, Jon Zhang and Jonathan Chang.[62] On September 9, 2013, Groupon announced acquisition of European last-minute travel app Blink (founded by Rebeca Minguela), which provides same-day hotel reservations.[63]

In January 2014, Groupon bought ideeli, a fashion company, for $43 million.[64] On October 2, 2014, Groupon unveiled Snap, a new app specifically for giving customers cash back when they buy certain items at the grocery store. Snap asks shoppers to upload photos of their receipts after they have gone to the supermarket to buy groceries. Certain items are then eligible for discounts, which shoppers receive in the form of a cash-back deal. The new app comes from Groupon's previous acquisition of SnapSaves, a Canadian start-up that works much like Snap.[65] In November 2014, Groupon acquired In-Store Analytics And Marketing Start-up, Swarm Mobile, a start-up that helps businesses connect with and track their customers while in stores.[66]

On July 16, 2015, Groupon announced its acquisition of food-delivery service Order Up.[67] Two weeks later, Groupon announced its own Food Delivery Business, Groupon To Go.[68]

In February 2016, Chinese online retailer Alibaba Group Holding Ltd disclosed that it had acquired a 5.6% stake in Groupon Inc.[69] In April 2016, Groupon Inc. announced it received a $250 million investment from a private investment firm, Atairos Management LP, which has ties to Comcast Corp. The firm was founded by former Comcast Chief Financial Officer Michael Angelakis, who launched the firm earlier that year with more than $4 billion in committed capital from Comcast.[70]

In May 2018, Groupon acquired Bristol, UK-based Cloud Savings company for $65 million.[71][72][73]

Business

[edit]

Business model

[edit]

When it first launched, the company offered one "Groupon" per day in each of the markets it served. The Groupon worked as an assurance contract using The Point's platform: if a certain number of people signed up for the offer, then the deal became available to all;[74] if the predetermined minimum was not met, no one got the deal that day.[10] This reduced risk for retailers, who can treat the coupons as quantity discounts[10] as well as sales promotion tools. In the early years before revenue splits began to adjust as necessary, Groupon made money by keeping approximately half the money the customer pays for the coupon. More recently that split could vary depending on many factors.[10][75][76]

Unlike classified advertising, the merchants advertising on Groupon do not pay any upfront cost to participate: Consumers are able to search and browse deals via web or mobile and can subscribe to receive emails featuring deals they are interested in based on preferences they input.[10] Groupon employs copywriters[77] who draft descriptions for the deals featured by email and on the website. Groupon's promotional text strategy in the early years for the deals has been seen as a contributing factor to the popularity of the site, featuring a distinctive mix of thorough fact-checking and witty humor.[77]

Some publications have noted potential problems with the business model. For example, the Wall Street Journal has reported that a successful deal could temporarily swamp a small business with too many customers, risking a possibility that customers will be dissatisfied, or that there won't be enough product to meet the demand.[10] In response to these issues, Groupon officials have stated that deals sold will be capped in advance to a number that the business can service effectively.[10]

In 2015, it was reported that 88% of merchants agree that their Groupon deal brought in new customers, and 82% of customers say they are likely to return to the merchant again.[7] One analysis found only ~20% of Groupon buyers returned for full-price purchases. [78][79]

In 2010, it was reported that local merchants found it difficult to get Groupon interested in agreeing to a particular deal. According to the Wall Street Journal, seven of every eight possible deals suggested by merchants were dismissed by Groupon.[10]

Groupon offers a mobile application which allows users to browse, buy deals, and redeem them using the screen as a coupon.

In addition to daily local deals, Groupon's channels have included: Groupon Goods, launched in September 2011, which focuses on discounted merchandise, although Groupon officially announced the closure of goods on February 19, 2020, but then decided almost three months later to phase down the Goods business and cut 44% of its employees;[80] Groupon Getaways,[81] which offers vacation packages and travel deals; and GrouponLive,[82] where consumers can find discounts on ticketed events [83] Groupon has also emerged as a check on price increases for certain essential commodities in many countries.[84]

In recent years, Groupon has shifted greater focus toward higher-margin local experiences and services, phasing out lower-margin goods. As of 2025, Groupon's Local segment in North America was the primary growth driver.[85]

Geographic markets

[edit]

Groupon has served markets in several countries including, the United States,[86] Canada, Ukraine, Germany, Greece, France, the Netherlands, Belgium, the United Kingdom, India, Indonesia,[87] Ireland, Israel,[88] Denmark,[89] Thailand,[90] United Arab Emirates,[91] New Zealand[92] and others. In 2010, Forbes noted that there were over 700 Groupon copycat sites, the majority of them existing overseas.[10][12]

On February 19, 2011 The Wall Street Journal reported that Groupon was preparing to launch in China.[93][94] Groupon subsequently entered into the China market in a joint venture with Tencent and launched "Gaopeng". After a year of struggling in the established market, Goapeng subsequently merged with Futuan. Groupon also launched in the MENA region with Groupon UAE on June 16, 2011.[95]

Groupon entered the Indian market through the acquisition of local company SoSasta in Jan 2011.[96] Finally, after winning a battle to acquire the groupon.co.in domain name, the Indian business was renamed Groupon in Nov 2012.[97][98] In August 2015, Groupon gave up control of its India unit to Sequoia Capital and renamed the company Nearbuy.[99] In February 2011, Groupon Russia announced it would join the Russian Company Mail.ru in order to start offering deals on its social network Odnoklassniki. This way, users would be able to buy and share deals from Groupon on their profiles.[citation needed]

Financials

[edit]

New Enterprise Associates, Eric Lefkofsky and Brad Keywell are investors in Groupon (Lefkofsky and Keywell later formed the investment company Lightbank; Groupon is listed as a Lightbank investment).[100] In April 2010, Groupon raised $135 million from Digital Sky Technologies, a Russian investment firm.[101] On December 29, 2010, Groupon's executive board approved a change to Groupon's certificate of incorporation that would permit the company to raise $950 million in venture capital funding, based on a valuation of $6.4 billion.[102]

From January 2010 through January 2011, Groupon's U.S. monthly revenues grew from $11 million to $89 million. Consolidated revenue for the full year 2014 reached nearly $3.2 billion.[32]

In October 2010, Yahoo! was rumoured to have offered over $3 billion to acquire Groupon.[103] On November 30, 2010, it was reported that Google offered $5.3 billion with a $700 million earnout to acquire Groupon and was rejected on December 3, 2010.[104] After the rejection of the Google/Groupon buy-out, Groupon proceeded with their own initial public offering.

Groupon's consolidated gross billings for the full year 2014 increased 32% year-over-year to $7.6 billion.[32]

Groupon Now application

[edit]

In 2011, Groupon developed an application, Groupon Now, aimed at smartphone and tablet users. The application consists of two buttons: "I'm Hungry" and "I'm Bored." Once a user clicks on one of the buttons, the app then locates the closest and best deals for food or entertainment, respectively, using geolocation.[105]

Groupon Promise

[edit]

Groupon have the Groupon Promise to ensure that customers are satisfied with their purchase and if customers are disappointed with their purchase, Groupon will try to work things out with the customers or give them a refund.[106] The Groupon Promise is essential in dissipating cognitive dissonance and perceived risk.

Groupon VIP

[edit]

On February 20, 2012, Groupon announced a "VIP Membership" program, with a membership fee of $30 annually.[107] This program gives VIP members access to deals 12 hours earlier than non-members, as well as access to expired deals (in the "Deal Vault") and easy returns of deals (in exchange for "Groupon bucks").

Groupon MerchantOS

[edit]

Groupon MerchantOS is a suite of products and tools for merchants running with Groupon. The suite includes Groupon Rewards, Groupon Scheduler and Groupon Payments.

Groupon Rewards On May 10, 2012, Groupon announced the launch of Groupon Rewards in the United States. Rewards is a loyalty program for merchants to reward customers for repeat visits with a Reward of their choosing. Unlike "buy 9 and get the 10th free" punchcards, a consumer earns Rewards by using any major credit card saved in their Groupon account when they visit their favourite local merchants. When a customer spends an amount pre-determined by the merchant, the customer unlocks a Reward to use on a future visit.[108][109] The rewards program was later removed due to lack of engineering support.[110]

Groupon Scheduler Groupon Scheduler is an online booking tool for merchants, allowing their consumers to seamlessly book appointments for services at the time of purchasing their Groupon deal. This tool is targeted at merchants running deals where appointments are required, for example in the health and beauty industry or for classes and activities.[111]

Groupon Payments The newest addition to the suite of merchant-facing products is Groupon Payments, which was launched in September 2012. Groupon Payments offers merchants an infrastructure for accepting credit card payments at a low cost.[112]

As of December 2015, MerchantOS is no longer a Groupon division.

Reception

[edit]

Super Bowl commercials

[edit]

Groupon aired a controversial Super Bowl XLV advertisement in which actor Timothy Hutton begins by making a plea for the people of Tibet before delivering the punch line: "But they still whip up an amazing fish curry."[113] Critics of the ad took to several social media outlets[114] to argue that Groupon was using the plight of Tibetans to sell their services. The commercial angered consumers who described the ad with adjectives including "tasteless," "tacky," "vulgar" and "detestable".[115] The following day, Groupon responded by defending their commercial and their philanthropic stance.[116][117]

On February 10, 2011, Groupon's founder Andrew Mason apologized and pulled the ad.[118]

The company waited seven years before it would try another Super Bowl ad.[119] The commercial that aired during Super Bowl LII featured Tiffany Haddish, a comedian and active Groupon user.[120]

Violation of gift certificate expiration laws

[edit]

In March 2011, Eli R. Johnson filed a lawsuit in federal court against Groupon, based on a claim that the company issues "gift certificates" that are not allowed under the Credit Card Accountability Responsibility and Disclosure Act. The act prohibits retailers from setting expiration dates less than 5 years after a card is purchased.[121] The class action lawsuit was settled on December 17, 2012.[122]

Massachusetts Alcoholic Beverages Control Commission

[edit]

In March 2011, the Massachusetts Alcoholic Beverages Control Commission notified Groupon that it was in violation of state law that prohibits discounting of alcoholic beverages. Groupon notified Massachusetts subscribers of a temporary suspension in the use of its discount vouchers for alcohol at participating restaurants.[123]

UK Office of Fair Trading investigation

[edit]

During 2011 there were reported breaches of British advertising regulations to the Advertising Standards Authority.[124] In December 2011 the Office of Fair Trading (OFT) launched an investigation into Groupon after the firm broke regulations 48 times in 11 months.[125]

The OFT concluded in March 2012 that Groupon was in "widespread breaches" of UK consumer laws[126] and were ordered to "clean up their practices" within three months including ensuring its website was accurate, realistic, claims related to any beauty or health products offered were substantiated and that refund and cancellation policies were in accordance with current regulations.[127]

Groupon and Chilean consumer office lawsuit

[edit]

The agency filed the lawsuit after a series of faults in the delivery and conditions of products and services sold to consumers.

In August 2016, the disagreements between the Chilean National Consumer Service (Sernac) and Groupon were evident. Both decided to raise a collective mediation for a series of questions that the entity dependent on the Ministry of Economy by groupon for the services of the virtual platform. In spite of the negotiations, the negotiations did not arrive at good port. And a few days after Christmas, Sernac filed a class action lawsuit against Groupon.

According to the agency, Groupon breached the conditions offered and contracted with consumers, in particular, due to non-compliance with deadlines offered and committed for the delivery of products or services. It even accuses it of not delivering the items purchased by consumers, with the consequent unilateral cancellation of purchases or having offered products and services without stock available.

This is compounded by the fact of dispatching articles of less value to the acquired or sending another product to the purchased, defaulting promotions and offers, "without respecting discount coupons offered and purchased by consumers," reads the lawsuit filed before the 18 ° Civil Court of Santiago.

According to information revealed by Sernac in the judicial action, during 2016 the service received numerous claims against Groupon. As of December 20, these totalled 1,958, which resulted in legal action. "The defendant incurs a serious violation of the Consumer Protection Law, violating the basic and irrevocable right, which is the right to truthful and timely information that assists every consumer," said the letter.[128]

Living on Groupon ("Live Off Groupon" program)

[edit]

In May 2010, Groupon created a challenge to live on Groupons for one year. The contestant Josh Stevens travelled throughout the United States and to the United Kingdom and purchased all food, drinks, travel, entertainment and more from Groupon for 365 days. At the end of the year, he received a prize of $100,000.[129]

[edit]
  • Friend Me, a CBS sitcom based around Groupon, was created in 2012, but never aired.[130]

References

[edit]
[edit]
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Groupon

View on Grokipedia
from Grokipedia
Groupon, Inc. is a global marketplace that connects consumers with local businesses by offering discounted deals on goods, services, and experiences such as dining, , , and wellness. Founded in November 2008 in , , by , , and , the company originated as a side project from an earlier platform called , which focused on , and quickly pivoted to a group-buying model to drive customer volume for merchants. Headquartered at 35 West Wacker Drive in , Groupon has expanded internationally and now serves millions of users through its and , having sold over 1.5 billion Groupons globally and partnering with more than one million merchants. The company's core business model revolves around a commission-based system where Groupon negotiates deals with merchants, promotes them via newsletters and its platform, and takes a —typically 50% or more—of the from each sale, while consumers receive discounts often up to 50-90% off retail prices to encourage impulse purchases and first-time visits to businesses. This approach, which emphasizes local commerce and time-sensitive offers, helped Groupon achieve rapid growth, reaching a $1 billion valuation within its first 16 months of operation, a that attracted a $6 billion acquisition offer from in late 2010, which the company rejected to pursue an independent path. Following its (IPO) on the under the ticker GRPN in November 2011, which raised $700 million and valued the company at over $12 billion at the time, Groupon faced challenges including controversies and market saturation but has since refocused on profitability through cost-cutting, mobile optimization, and expanding into direct goods sales. As of 2025, Groupon continues to operate as a with a of approximately $0.76 billion as of November 2025 and reports quarterly revenues driven by its North American and international segments, emphasizing a "mobile-first" strategy to capitalize on app-based discovery of personalized deals. The platform has facilitated over $25 billion in gross billings for merchants and claims to have helped consumers save more than $35 billion, underscoring its role in democratizing access to local experiences while supporting small businesses in a competitive digital marketplace. Despite evolving competition from broader platforms like Amazon and , Groupon's defining strength remains its vast subscriber base and data-driven targeting, which enable hyper-local promotions tailored to user preferences and locations.

History

Founding and early growth

Groupon originated from an earlier venture called , a designed to facilitate for social causes, such as petitions and boycotts. The Point was launched in November 2007 by Andrew D. Mason, who had been encouraged by his former employer, , to develop it full-time; Lefkofsky provided initial funding of $1 million to Mason for The Point, with Bradley A. Keywell as his business partner. The company was formally incorporated as ThePoint.com, Inc. on January 15, 2008, in Chicago, Illinois, with Mason serving as CEO. In late 2008, amid the global , Mason pivoted The Point's technology toward a new model focused on group-buying discounts for local merchants, aiming to leverage collective purchasing power to drive sales for businesses. The first Groupon deal was launched on October 22, 2008, offering two-for-one pizzas at Motel Bar, a restaurant in the company's building, which sold out quickly and generated initial buzz. This marked the birth of Groupon as a daily deals service, where offers required a minimum number of buyers to activate. The company officially rebranded from The Point to Groupon, Inc. in October 2009. Groupon's early growth was remarkably rapid, fueled by word-of-mouth, viral , and a sales-driven expansion strategy involving city-by-city launches supported by local sales forces, with merchant recruitment via daily deals designed to create demand spikes. Starting in , it quickly added cities across the ; by mid-2010, Groupon had rapidly scaled to over 150 U.S. cities. This hyper-local approach served as a pre-Uber template that emphasized explosive growth while underscoring the need for post-launch discipline and sound unit economics. Revenue surged from approximately $94,000 in 2008 to $14.5 million in 2009 (after accounting restatements for customer refund liabilities) and reached $312.9 million in 2010, reflecting a more than 20-fold increase year-over-year. International expansion began in early 2010, with launches in and , leading to operations in over 30 countries by year-end and a subscriber base exceeding 35 million. The workforce grew to more than 3,000 employees, primarily in sales roles, supporting this hyper-local model. This period established Groupon as one of the fastest-growing internet companies in history, drawing interest from major players like .

Initial public offering

Groupon filed its S-1 registration statement with the U.S. Securities and Exchange Commission on June 2, 2011, announcing plans for an that could raise up to $750 million and value the at around $30 billion. At the time of filing, Groupon reported 83 million subscribers across 43 countries and revenue of nearly $650 million for the first three months of 2011 alone, highlighting its rapid growth in the daily deals market. The filing marked a significant for the three-year-old , which had previously rejected a $6 billion acquisition offer from earlier in the year. The IPO was delayed several times due to regulatory scrutiny, including concerns from the SEC over accounting practices and disclosures, before proceeding in late 2011. On November 3, 2011, Groupon priced its offering at $20 per share, selling 35 million shares of Class A and raising approximately $700 million, with underwriters granted a 30-day option for an additional 5.25 million shares. This made it the largest technology IPO since Google's in , providing capital for international expansion and operations amid intense in the e-commerce sector. Shares debuted on the under the ticker "GRPN" on November 4, 2011, surging 31% to close at $26.63 on the first , reflecting strong initial enthusiasm despite broader market skepticism about the of Groupon's . The offering established a public market for Groupon's stock, where no prior trading had existed, and positioned the company to fund further growth while navigating post-IPO challenges like profitability pressures.

Post-IPO expansion and challenges

Following its in November 2011, Groupon accelerated its international expansion, building on pre-IPO efforts to establish operations in over 47 countries by early . The company's overseas segment became a key driver of growth, generating $320.7 million in revenue for the international segment during the first quarter of , representing the majority of overall sales of $559.3 million. This push included deeper penetration into markets like and , where Groupon aimed to replicate its U.S. success through localized daily deals. However, the rapid scaling strained resources, as the firm shook up its international leadership by replacing head Marc Samwer in amid efforts to streamline operations. The expansion contributed to strong revenue performance in the immediate post-IPO period, with fourth-quarter results exceeding estimates of $475 million, propelled by international trading uplift. By mid-, Groupon reported profitability in and , a milestone achieved since the second half of , signaling some stabilization in core markets. Despite these gains, the international focus highlighted underlying vulnerabilities, as overseas ventures accounted for a disproportionate share of costs without matching proportional returns in all regions. For instance, early stumbles in , including office closures and layoffs in , foreshadowed ongoing difficulties in adapting the model to diverse regulatory and cultural landscapes. Post-IPO challenges intensified due to persistent accounting irregularities, prompting a U.S. Securities and Exchange Commission (SEC) investigation in 2012 into Groupon's revenue recognition practices, including refunds to merchants that were initially recorded as income. The company had already revised its accounting methods multiple times during the IPO process, and in April 2012, it disclosed a "material weakness" in internal financial controls, leading to a 17% plunge in its stock price. These issues drew scrutiny to the board and executive team, culminating in shareholder lawsuits alleging misleading disclosures that overstated the company's financial health. The SEC probe, which examined circumstances around a surprise accounting revision, underscored broader concerns about transparency in Groupon's aggressive growth reporting. Intensifying competition from platforms like and Amazon, coupled with "deal fatigue" among consumers and merchants, further eroded Groupon's position. Merchants increasingly voiced frustration over low profitability from deep discounts, delayed payments, and fulfillment issues, contributing to wariness about repeat participation in daily deals. The costly international expansion, particularly in recession-hit , began to erode margins and growth rates by late 2012. In February 2013, Groupon announced a reduced take rate on deals and issued a disappointing outlook, causing shares to drop 25% in a single day and leading to the ouster of founder and CEO , who acknowledged failures in execution. These developments marked a turbulent phase, with the company's market value plummeting from post-IPO highs and highlighting the sustainability risks of its high-velocity model.

Acquisitions and partnerships

Groupon has pursued an aggressive acquisition strategy since its early days to expand its market reach, enhance technological capabilities, and diversify its offerings beyond daily deals. Following its 2011 , the company accelerated acquisitions to build expertise and integrate complementary services, often targeting startups in mobile, , and booking technologies. These moves aimed to bolster Groupon's position in the competitive services by acquiring talent, user bases, and proprietary tools. Key acquisitions include the 2012 purchase of Hyperpublic, a location-based recommendation , which strengthened Groupon's mobile personalization features and helped integrate social discovery into its platform. In 2014, Groupon acquired Ideeli, a flash-sale site, to accelerate its entry into online retail and merchandise sales, adding premium brand partnerships to its inventory. The 2015 acquisition of OrderUp, a and ordering platform, expanded Groupon's capabilities in on-demand services, enabling nationwide restaurant integrations and powering features like Groupon Orders. Later, in 2018, the company bought Cloud Savings Company Ltd., the parent of Vouchercloud, a UK-based discount code platform, to deepen its presence in and enhance loyalty programs for merchants. In 2019, Presence AI was acquired to incorporate AI-driven messaging tools, allowing merchants to automate customer interactions and boost booking efficiency.
AcquisitionDateFocusImpact
HyperpublicFebruary 2012Location-based searchEnhanced mobile recommendations and local discovery.
IdeeliJanuary 2014Flash fashion salesExpanded e-commerce and brand merchandise offerings.
OrderUpJuly 2015Food ordering/deliveryIntegrated on-demand services for restaurants.
Vouchercloud (Cloud Savings)May 2018Discount codes/loyaltyStrengthened European market and merchant retention tools.
Presence AIAugust 2019AI messagingImproved merchant-customer engagement automation.
In addition to acquisitions, Groupon has formed strategic partnerships to integrate third-party booking systems, expand inventory, and streamline merchant operations without full ownership. These collaborations often focus on integrations for seamless experiences in sectors like , fitness, and payments. For instance, in 2019, Groupon partnered with MINDBODY to connect users with bookable wellness services, scaling access to thousands of fitness and beauty providers through shared inventory. That same year, a deal with DerbySoft facilitated easier hotel bookings by linking Groupon's platform to global hotel suppliers, reaching its 29 million North American customers. More recent partnerships include the 2020 integration with Xola, enabling tours and attractions operators to manage capacity and drive demand via Groupon's . In 2021, Groupon teamed up with Square, allowing U.S. merchants to launch campaigns directly from the Square app, simplifying access for small businesses. By 2025, partnerships continued to evolve, such as with Redeam for enhanced mobile redemptions in experiences and with D-EDGE to boost hotel bookings through cloud-based tools. These alliances have helped Groupon maintain relevance in a shifting digital landscape by leveraging partner ecosystems for broader service coverage.

Business operations

Business model

Groupon operates as a global two-sided that connects consumers with and online merchants by offering discounted deals on , services, and experiences. The platform facilitates transactions primarily through its mobile apps and websites, such as groupon.com, available in 13 countries across and international markets. Consumers browse and purchase vouchers or digital coupons for offerings in categories including services (e.g., restaurants, spas), from third-party sellers, and travel packages (e.g., hotels, ). In 2024, approximately 80% of transactions occurred via mobile devices, underscoring the company's emphasis on a seamless digital experience. As of Q3 2025, over 75% of transactions continue to occur on mobile. The core mechanism involves Groupon partnering with to create time-limited promotions, where the company markets the deals to its user base via email newsletters, app notifications, , and paid . Customers pay Groupon upfront for the discounted , which they redeem directly with the . Groupon collects the full and remits the 's agreed-upon share after redemption (or based on estimated redemptions for unredeemed vouchers), retaining the difference as commission—typically 40-50% of the gross billings, though this varies by deal. This pay-for-performance structure ensures incur no upfront costs and only pay for actual customer redemptions, aligning incentives for customer acquisition and volume. For instance, in deals, Groupon guarantees a minimum number of vouchers sold to ensure , while travel and goods deals may involve direct bookings or third-party fulfillment. Revenue is recognized net of the merchant's share, reflecting Groupon's role as an agent in the transaction rather than the principal seller. In 2024, this model generated $492.6 million in net from $1.6 billion in gross billings, with 36.6 million units sold to 15.4 million active customers. In Q3 2025, global reached $122.8 million (up 7% year-over-year) from billings of approximately $410 million (up 11%), with nearly 300,000 net new active customers added. Additional streams include fees from digital coupons with retailers and commissions on third-party sales for goods. The business has evolved from an email-centric "push" model in its early days to a more dynamic, app-driven platform with personalized recommendations and automation to enhance merchant ROI and . Groupon supports merchants through tools like dashboards and payment processing, paying them weekly (typically on Wednesdays) excluding end-of-month delays. This commission-based approach leverages network effects, where increased user engagement drives more deal offerings, though it faces challenges from competition with larger platforms and varying redemption rates.

Products and services

Groupon operates as a global e-commerce marketplace that connects consumers with local and national merchants by offering discounted deals across three primary categories: Local, Goods, and Travel. These categories enable subscribers to access a wide range of experiences, merchandise, and travel options at reduced prices, while providing merchants with tools to drive customer acquisition and revenue growth. The Local category forms the core of Groupon's offerings, focusing on deals for in-person or online experiences from nearby businesses. This includes discounts on dining at restaurants, treatments, fitness classes, services, activities like escape rooms or tours, and ticketed events such as concerts or games. Consumers purchase digital vouchers that can be redeemed directly with the , often with no minimum purchase requirements, allowing flexible use for personal or gifting purposes. For example, users might find deals saving up to 70% on local attractions or services, helping small businesses fill capacity during off-peak times. In the category, Groupon curates discounted physical products shipped directly from third-party suppliers, expanding beyond local services into . Offerings span , apparel, home decor, health and beauty items, , and personalized gifts, with many deals featuring well-known brands and fast delivery options. This category emphasizes everyday essentials and fun finds, such as up to 50% off on or gadgets, and supports consumer discovery through curated collections and search features on the platform. Groupon provides buyer protections for digital purchases in this category, including a 30-day return policy for goods; if a product key does not work, many users receive refunds, though this is not always guaranteed due to conditions specified in the fine print. The Travel category provides savings on vacation-related bookings, partnering with , airlines, and tour operators to offer packages, stays, and excursions. Deals might include discounted hotel nights, flight bundles, or guided trips to destinations worldwide, often with added perks like free upgrades. This segment caters to both domestic getaways and international adventures, with vouchers redeemable via Groupon's booking system or partner sites, making travel more accessible for budget-conscious users. Beyond consumer-facing deals, Groupon supports merchants through a suite of , including customizable promotional campaigns, , for customer insights, and streamlined payment processing. Merchants pay commissions only on successful , typically 30-50% of the deal value, enabling them to test strategies without upfront costs. These tools help businesses in competitive markets reach millions of across Groupon's app and .

Geographic markets

Groupon's geographic markets are divided into two primary segments: and International, reflecting its core focus on the and alongside select global operations. The company maintains localized websites and mobile applications in 13 countries, enabling consumers to access deals tailored to local merchants and experiences. serves as the foundation of Groupon's business, encompassing operations in the and , where the platform connects users with a wide range of local services, activities, and options. In 2024, generated approximately 80% of Groupon's billings, with the U.S. accounting for over 76% of total revenue, benefiting from a mature market, high user penetration, and established merchant partnerships. This dominance underscores the company's strategic emphasis on optimizing commerce in its home region, where revenue stability supports ongoing investments in product enhancements and marketing. International markets provide diversification through operations in , the , and , including the , , , , , the , , , , , and the . These regions feature adapted offerings to align with preferences and regulatory environments. Groupon's international presence has evolved through expansion and retrenchment, with exits in the mid-2010s to focus on profitability. For instance, international revenue totaled $33.7 million in Q4 2024, an 11% decline year-over-year. However, following this, the segment achieved double-digit growth in major markets during Q2 and Q3 2025, contributing to overall global billings growth and indicating improved performance amid ongoing optimizations. In Q3 2025, North America revenue was $96.0 million (up 11% year-over-year). Overall, while North America drives financial performance, international markets enable Groupon to test innovations and capture growth in emerging local e-commerce trends.

Merchant tools and support

Groupon provides merchants with a suite of digital tools designed to facilitate deal creation, management, and performance analysis, primarily through the Merchant Center portal. This platform allows businesses to build and launch campaigns independently, redeem vouchers, track sales metrics in real time, and access demographics to refine future offerings. The tools aim to minimize upfront costs, as merchants pay commissions only on redeemed sales, enabling small and medium-sized enterprises to reach new audiences without significant financial risk. Central to these offerings is the , a interface that enables merchants to create, edit, and launch deals in as little as 24 hours. Features include setting discount levels, controlling voucher quantities, and adjusting campaign parameters such as duration and targeting, all accessible via desktop or mobile devices. This tool supports flexibility by allowing real-time adjustments to inventory caps, with notifications sent when deals approach 90% sell-out to prevent oversubscription. Additionally, integration with national advertising channels, including SEO, SEM, and , amplifies deal visibility to Groupon's subscriber base exceeding 200 million. For operational efficiency, Groupon offers the free Booking Tool, which streamlines reservation management for services like restaurants, spas, and events. Merchants can integrate it with existing systems or use it standalone to handle both Groupon and non-Groupon bookings, reducing administrative burdens and improving through automated scheduling. redemption is simplified via desktop, mobile, or the dedicated Groupon app (available on and Android), which also supports invoicing for quick payment processing—typically within days of redemption. Performance insights are provided through dashboards in the Merchant Center, offering data on sales trends, redemption rates, and customer feedback to help merchants optimize deals and convert one-time buyers into repeat patrons. Businesses can update profiles, respond to reviews, and access educational resources such as video tutorials and guides on best practices for deal structuring. Support for merchants emphasizes self-service options, including comprehensive FAQs, help articles, and in-portal assistance accessible via the Merchant Center. For more complex issues, merchants can submit inquiries through dedicated forms or contact support via , with responses aimed at resolving campaign, , or technical concerns. While phone support is not prominently featured, online channels ensure 24/7 availability for account management and troubleshooting.

Financial performance

Historical revenue and profitability

Groupon's revenue demonstrated remarkable growth during its formative years, reflecting the rapid adoption of its daily deals platform. In 2009, the company's inaugural full year of operations, revenue stood at $14.5 million. This expanded dramatically to $312.9 million in 2010 as Groupon scaled domestically and began international expansion. The trajectory accelerated in 2011, the year of its , with revenue surging to $1,569 million, fueled by aggressive marketing and entry into over 40 countries. Revenue growth persisted into the mid-2010s, reaching $2.352 billion in and peaking at $3.063 billion in 2016, driven by diversified offerings and global reach across more than 1,000 markets. However, post-2016, revenues contracted amid intensifying competition from giants, shifting consumer behaviors, and operational challenges, declining to $2.988 billion in 2017, $514.9 million in 2023, and $492.6 million in . This decline represented a roughly 84% drop from the 2016 peak, highlighting the maturation and saturation of the daily deals sector. Note that Groupon reports both (its commission share) and gross billings (total value of deals sold); some historical analyses confuse the two, but figures here refer to . Profitability has been elusive for Groupon throughout its history, with net losses reported in the majority of years due to high expenses, customer acquisition costs, and periodic impairments. Early operations yielded net losses, such as $2.0 million in 2009, escalating to significant deficits like $183.3 million in 2016 from goodwill write-downs related to international acquisitions. Rare profitable years included 2017 with $26.6 million in net income and 2021 with $118.7 million, the latter benefiting from cost controls during the recovery. More recently, net losses persisted, including $287.9 million in exacerbated by pandemic-related disruptions, $237.6 million in 2022, $55.4 million in 2023, and $59.0 million in 2024, underscoring ongoing pressures on margins in a competitive landscape.
YearRevenue ($ millions)Net Income ($ millions)
200914.5-2.0
2010312.9-39.4
20111,569.4-373.0
20163,063.0-183.3
20201,416.9-287.9
2021967.1118.7
2023514.9-55.4
2024492.6-59.0
The table above illustrates key milestones in Groupon's financial trajectory, with data drawn from SEC filings and aggregated financial reports; note that 2011 figures reflect post-IPO revisions for adjustments, resulting in a net loss. Overall, while scale established Groupon as a notable player in local , persistent unprofitability reflected the high costs of sustaining growth in a low-margin .

Recent financial results and stock performance

In the third quarter of 2025, Groupon reported global revenue of $122.8 million, marking a 7% increase year-over-year, driven primarily by growth in its core deals segment. Global billings rose 11% to support this expansion, with the local category achieving 18% year-over-year growth, reflecting stronger demand for services and improved engagement. Adjusted EBITDA reached $18 million for the quarter, indicating operational improvements, while trailing twelve-month stood at $60 million, underscoring positive cash generation amid cost controls. Despite revenue gains, Groupon recorded a net loss of $117.8 million in Q3 2025, largely attributable to non-recurring charges such as asset impairments and costs associated with its ongoing business optimization efforts. (EPS) came in at -$2.92, significantly missing analyst expectations of $0.02 and contributing to heightened investor scrutiny. The company added nearly 300,000 net new active customers during the quarter, signaling sustained user acquisition momentum, particularly in where local revenue increased modestly. For the full year 2025, Groupon reaffirmed guidance for adjusted EBITDA between $70 million and $80 million, with expectations of continued billings growth in the low double digits. Groupon's (NYSE: GRPN) has shown volatility in 2025, delivering a year-to-date total return of approximately 43% as of November 7, buoyed by earlier quarters' operational progress and market optimism around its pivot to AI-enhanced local commerce tools. However, shares declined sharply following the Q3 earnings release on November 6, closing at $18.90 that day—down about 12% from the prior close—and further slipping to $17.95 by November 8 amid the EPS miss and concerns over the sizable net loss. This post-earnings drop erased much of the recent gains, with the trading around 7% below its 52-week high but still up significantly from early 2025 lows, reflecting broader investor focus on profitability sustainability.

Marketing and media

Advertising campaigns

Groupon's advertising campaigns have often employed humor, , and stunt to highlight the value of its daily deals, reflecting the company's origins in a of irreverent promotions. Early efforts focused on viral stunts and edgy content to build rapidly during its explosive growth phase. In 2010, Groupon launched the "Live Off Groupon" challenge, a where the winner would live exclusively using Groupon deals for an entire year, including travel across the , with a $100,000 for completion. The contest, announced in February, selected Josh Stevens as the participant, who successfully completed the year-long endeavor by May 2011, documenting his experiences to showcase the versatility and savings potential of Groupon vouchers for everyday needs like food, lodging, and entertainment. This campaign exemplified Groupon's approach to experiential , generating media buzz and user engagement without traditional ad spend. Groupon's most high-profile early campaign aired during in 2011, featuring three 30-second spots directed by and created by ad agency Crispin Porter + Bogusky at a cost of approximately $9 million for airtime for the three spots. The ads adopted a satirical tone, beginning with serious narratives on global issues—such as Tibetan oppression narrated by , whale endangerment, and breast cancer awareness—before pivoting abruptly to how affected parties could still "save money with Groupon." Intended to mock clichéd advertising tropes while tying into Groupon's charitable donations (pledging to match up to $100,000 each to three related causes like Free Tibet and Susan G. Komen), the spots drew immediate backlash for trivializing and social issues, with critics including Tibetan advocates and the American Association of Advertising Agencies condemning the approach as insensitive. In response to the controversy, which generated widespread media coverage and outcry, Groupon pulled the remaining ads from rotation shortly after the game and issued statements clarifying the satirical intent. Following the Super Bowl fallout, Groupon shifted toward more straightforward, value-focused campaigns. In October 2011, the company produced its first in-house national ads, moving away from external agencies to emphasize practical savings on local experiences, though these were critiqued as less innovative compared to prior efforts. By 2017, Groupon targeted with a campaign using the "Save Up to $100 a Week on What You Do Every Day," featuring spots like "How to Save on Restaurants" that portrayed young adults integrating Groupon into routines for dining, fitness, and . This initiative, rolled out across TV, digital, and social platforms, aimed to position Groupon as an essential tool for budget-conscious daily life, later expanding to highlight support for small businesses by noting over $17 billion infused into local economies. A parallel 2017 YouTube-focused effort tailored video ads to interests like adventure and wellness. In , amid post-pandemic recovery, Groupon introduced the "Grab Life by the Groupon" brand campaign, encouraging consumers to resume local adventures with deals on travel, dining, and experiences. Created by agency FCB Chicago, the effort—launched in August with TV, digital, and out-of-home elements—highlighted expanded inventory and user-friendly features, winning recognition at the Lions International Festival of Creativity for its creative execution. This campaign marked a pivot toward aspirational messaging, emphasizing joy and accessibility in everyday outings rather than pure discounts. In recent years (2022-2025), Groupon has emphasized digital and app-based promotions, including targeted campaigns for holidays and wellness, without major traditional ad blitzes.

Media coverage and experiments

Groupon garnered extensive media attention during its explosive growth phase from 2008 to 2011, often portrayed as a revolutionary success story. Launched in as a pivot from a failed activism site called , the company quickly expanded, reaching 150 cities in the U.S. and by 2009 and over 500 markets globally by 2010, with revenues surging from $30 million in 2009 to an estimated $760 million in 2010. This rapid ascent led to headlines hailing it as the "fastest-growing company ever," fueled by its innovative group-buying model that offered deep discounts to drive merchant traffic. A pivotal moment in Groupon's media narrative came in December 2010 when it rejected a $6 billion acquisition offer from , just two years after its founding, sparking widespread speculation about its valuation and future independence. The decision amplified coverage in outlets like and , positioning Groupon as a bold disruptor in the space. However, as the company prepared for its (IPO) in 2011, media scrutiny intensified over its aggressive accounting practices, such as "acquired merchant adjustments" that inflated revenue figures. Groupon responded with a sarcastic post criticizing "disparaging articles" and likening the coverage to "," which itself drew further attention. The IPO, priced at $20 per share and raising $700 million, debuted on in November 2011 with an initial 30% pop, but shares soon plummeted amid doubts about sustainability, marking a shift in media tone from hype to skepticism. Groupon's foray into high-profile advertising amplified its visibility but also controversy. During in 2011, the company aired three ads, including the "Save the Money" spot narrated by , which juxtaposed the oppression in with a discount on Tibetan food, ostensibly to highlight deals while donating to related causes. The campaign, costing approximately $9 million for airtime, ignited backlash for trivializing issues, with critics in , , and ABC News decrying it as tone-deaf and offensive, though it generated millions in earned media value through viral discussion. Groupon defended the ads as satirical, but the uproar underscored the risks of its irreverent marketing style. Later coverage tracked the company's post-IPO struggles, including the 2013 firing of co-founder and CEO via a humorous memo, which described as emblematic of Groupon's fall from grace amid mounting losses and competition. Beyond traditional coverage, Groupon's model inspired numerous academic and media-reported experiments exploring consumer behavior in daily deals. A 2011 WIRED article analyzed a Stanford and Carnegie Mellon neuroimaging study on purchasing decisions, applying its findings to explain Groupon's appeal: discounts activate the to override cost aversion in the insula, while limited-time offers heighten desire in the , driving impulse buys. Subsequent used Groupon for field experiments, such as a 2018 MIS Quarterly study on behavior and word-of-mouth, which found that displaying real-time purchase counts increased sales by up to 10% in daily deal cycles, while integrating platforms like amplified positive reviews' impact on conversions. Another experiment, detailed in a 2012 paper, examined the "Groupon effect" on Yelp ratings, revealing that deal users posted more reviews—often critical—due to experimentation with new services, lowering average scores by about 0.2 stars for participating merchants compared to non-deal periods. These studies, covered in outlets like and IEEE, highlighted Groupon's role as a natural for testing economic theories on discounting and , though media often framed them as evidence of the model's mixed impact on businesses. By 2025, coverage had waned to focus on financial recoveries, such as a 7.3% uptick in Q3 despite net losses, signaling a pivot toward core local deals.

Controversies

In 2011, shortly before its , Groupon faced scrutiny from the U.S. Securities and Exchange Commission (SEC) over its practices, particularly the use of a non-standard metric called the "Groupon Number" for and the capitalization of customer acquisition costs. The probe intensified after a whistleblower tip from an accounting professor highlighted potential inaccuracies in financial reporting, leading Groupon to substantially revise its in September 2011, reducing reported revenue for the first six months of 2011 from $1.52 billion to $688 million. Although the SEC investigation continued into 2012, examining circumstances around further revisions to fourth-quarter results for under-accrued customer refunds, it did not result in formal enforcement actions against the company. Groupon also encountered regulatory investigations related to consumer protection laws in multiple jurisdictions. In the United States, the launched an inquiry in July 2011 into the company's discount vouchers, focusing on potential violations of gift certificate regulations and expiration policies. This contributed to broader state-level probes and class-action lawsuits alleging that Groupon's deals functioned as gift certificates subject to federal and state laws prohibiting expiration dates shorter than five years, resulting in an $8.5 million settlement in April 2012 covering multiple consolidated cases. In the , the Office of Fair Trading (OFT, predecessor to the or CMA) investigated Groupon in 2011-2012 and concluded in March 2012 that the company had committed "widespread breaches" of laws, including misleading reference pricing, inadequate refund policies, and unfair terms in dealings with merchants. The OFT ordered Groupon to revise its practices within three months, with non-compliance risking court action. More recently, in April 2021, the UK CMA opened an enforcement investigation into Groupon UK for suspected breaches of consumer law, prompted by complaints about misleading pricing claims—such as "up to 70% off" without clear original price references—and failures to provide full cash refunds or replacements for faulty deals. The CMA warned of potential court proceedings in August 2021 unless improvements were made, leading Groupon to accept voluntary undertakings in October 2021 to overhaul its refund processes, offer cash refunds where due, enhance transparency in advertising, and establish a dedicated customer service team. These commitments addressed evidence that affected thousands of customers and aimed to ensure ongoing compliance with the Consumer Rights Act 2015. In June 2025, short-seller firm Captain's Log published a report alleging that Groupon engaged in questionable practices related to its financial reporting and turnaround claims, leading to an 8% drop in the company's stock price on the day of release. The report prompted investigations by several law firms, including Pomerantz Law Firm and Levi & Korsinsky, into potential securities law violations on behalf of investors, though no formal had been filed as of November 2025.

Consumer and merchant issues

Groupon has faced significant consumer complaints related to refund policies and deal fulfillment. Many users report difficulties obtaining cash refunds for unredeemed vouchers, particularly when merchants close or fail to honor purchases, with the company often issuing site credits known as Groupon Bucks instead. For instance, in September 2025, a consumer who purchased a $65 restaurant voucher found it worthless after the business shut down, but Groupon refused a cash refund, citing its policy of providing credits for such cases. Similarly, consumer advocacy reports highlight repeated instances where customers receive non-refundable credits rather than full reimbursements, leading to frustration over inaccessible funds. Regulatory scrutiny has underscored these issues. In 2021, the UK's (CMA) investigated Groupon and warned that it may have breached laws by not always providing refunds or replacements for faulty or undelivered , potentially entitling affected customers to back. The CMA's revealed evidence of systemic problems in handling order issues, prompting Groupon to commit to changes. In the , the (BBB) has documented thousands of complaints since 2020, with common themes including billing disputes, delayed or missing deliveries, and unresponsive customer service, resulting in a D- rating for the company due to failure to address over 100 complaints adequately. Merchant grievances often center on unauthorized use of their brand and unfair deal terms. A 2022 class-action lawsuit accused Groupon of creating fake webpages for tens of thousands of small businesses without permission, misappropriating their goodwill and reputations to promote unrelated discounted services, thereby confusing consumers and harming merchants' online presence. The suit, filed in the US District Court for the Northern District of , alleged that these listings generated unauthorized revenue for Groupon while exposing businesses to negative reviews for deals they did not offer. The case settled in 2023, with preliminary court approval in , though specific terms were not publicly detailed beyond commitments to remove unauthorized listings. Additionally, merchants have raised concerns about payment disputes and the platform's . Groupon's standard terms allocate up to 50% of deal to the company, which some merchants argue attracts price-sensitive customers who rarely return at full price, limiting long-term value. Ongoing legal proceedings, as disclosed in Groupon's 2024 SEC filings, include merchant-initiated suits over contract breaches and withholdings, alongside customer disputes related to unfulfilled promotions, though the company maintains these are routine and not material to operations. These tensions highlight broader challenges in balancing consumer access to deals with merchant on the platform.

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