LocalFlavor won’t honor credit requests [UPDATED]

Like a lot of my readers, I use Groupon, LivingSocial and LocalFlavor (formerly DoubleTake Deals, and affiliated with Clipper Magazine) to save a few bucks when I go out to eat and try a new place. You pay in advance for the coupon which usually gives you 50% off list prices, then redeem it at the restaurant by a deadline date according to restrictions which typically include dine in only. I don’t always get around to using the coupon by the deadline date, but I don’t worry because it’s always good for the cash value. If the merchant goes out of business, I am similarly confident I can get credit to my account for another purchase.

Recently I visited a local restaurant and asked to redeem an expired LocalFlavor coupon for the amount I paid. To be clear, I’m not asking for an exception, just the cash value which is clearly stated in the purchase policy. The restaurant refused to honor it. I contacted LocalFlavor customer service and asked for a credit to my account and after several weeks I got this response today from Jenny W:

“We apologize that the Merchant will not honor the paid value of your deal, and we have escalated this on to our Merchant Loyalty team so they can help educate the Merchant on this law.

“That being said, it is a Federal law that states that the Merchant is to honor any gift certificate, discount voucher, or gift card for the price paid up to five (5) years after the date of purchase. This is not something that LocalFlavor can enforce because this is a law and not just a policy of LocalFlavor.com, we do apologize that we are unable to intervene in an effort to enforce that they follow this. It becomes a legal matter after that expiration date. Our contract with the merchant expires at that time, therefore there is not much we are able to do except to try and contact the merchant and attempt educate them. When the promotional value of our certificate expires that is when our contract with the merchant ends. Because your request falls outside of our refund policy we are unable to offer a refund or a credit for the amount that you paid.

“Again, we understand that this policy may not work out with exactly what you were looking for today. All LocalFlavor policies were written to provide the best overall experience to both our consumers and our merchant partners. We hope you understand and will continue to take advantage of our great services and products.”

In other words, because there is a federal law that covers the matter, LocalFlavor refuses to step up for its customers in the matter. I guess I could take this restaurant to small claims court but am not inclined to do so for $10. Since I can assume the same will happen with any other coupons from Local Flavor if I have problems in the future, their value has declined significantly in my eyes. I’ll avoid them henceforth, and you might want to consider my experience in your own future purchasing.

UPDATE: since this post is suddenly getting some new traction, here’s a fresh look over a year later. I have indeed drastically reduced my purchase of these “bargains” unless it’s a place very convenient to me that I’m likely to frequent anyway. And I’ve encountered other restaurants that refused the expired LocalFlavor coupons including a prominent Korean place in Albany, NY, that told me they couldn’t give my money back because they had never received their money back from LocalFlavor and had hired a lawyer to look into the matter.

A troubling new development is that Groupon, which I hitherto regarded as a very reliable company, has started reselling LocalFlavor deals on its site: you buy a Groupon but it’s really a LocalFlavor coupon. Does that mean they’ll back me up if LocalFlavor and the merchant refuse to honor the deal?

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2 Responses to LocalFlavor won’t honor credit requests [UPDATED]

  1. ed says:

    Certainly frustrating. But from LF’s standpoint, if they have already laid out the payments to the restaurant, I can see why they would not be able to credit your account. In essence, they would be taking a hit, not just refunding “your” money. And the restaurant would be keeping the balance of the transaction. I can’t imagine LF is making more than a few percent off of each sale, so they would be bankrupt quickly if they credited/refunded every expired transaction. The restaurant is clearly in the wrong here.

  2. Ed, I didn’t ask LocalFlavor for a refund but rather a credit. So they’d still have the opportunity to profit from me; it would be simply delayed to a future purchase. (Which I would be more likely to make because of the good will they’d generate.)

    Also, I don’t know that LF has laid out all that much in payment to the restaurant. I spoke to a Groupon customer one time and he told me he gets about half of the money that the customer pays. So he provides $20 worth of food and gets $5 and Groupon gets $5. With more competition the ratio may have changed a bit in the restaurant’s favor but I wouldn’t worry about LF going out of business here; they’ve got a nice cushion which would allow them to make the occasional refund, much as any business has a bad debt cushion.

    If I’d been able to use the coupon before it expired, the restaurant would have received $5 for serving me $20 worth of food (assuming the Groupon ratio). Now, they could receive $5 for serving $10 worth of food and make a new customer. Suppose LF had credited me the $10 against a future purchase; they email discount and savings offers like that all the time. Both are being penny wise and pound foolish and I hope this post keeps getting pounded with traffic.

    Speaking of which, I hadn’t mentioned the name of the restaurant, but since this post was linked to a local upstate NY blog now I will. It was Sri Siam, a Thai place in Rensselaer. The food was actually pretty good but I won’t be returning for obvious reasons.

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