Will A Group Buying Code Of Practice Stop Shonky Deals?

Will A Group Buying Code Of Practice Stop Shonky Deals?

Eight of Australia’s largest group buying sites have signed up to a code of practice designed to protect buyers. We’re all for ensuring that consumer rights are respected, but will the code really make any practical difference?

Group deals — where a limited-time offer is made online providing a certain number of people sign up — have proved massively popular (analyst Telsyte estimates $400 million in sales through group deals in Australia in 2011). They can be a great way to score a bargain. However, they can also go wrong sometimes. Aside from deals that sell out, it’s not uncommon to discover that you can’t get an appointment to take advantage of your super-bargain facial at anything resembling a reasonable time, or to see goods on sale where the specifications aren’t clear.

The Group Buying Code Of Practice has been developed by the Australian Direct Marketing Association (ADMA), and is backed by the eight most prominent local group deal sites: Cudo, Groupon, Jump On It, LivingSocial, Ouffer, OurDeal, Scoopon and Spreets. The full document runs to 17 pages, but essentially it aims to ensure that group buying sites fully communicate information, comply with all relevant laws, and increase consumer confidence.

Group buying sites who sign up to the code agree to adhere to a number of policies. The ones which seem obvious but which I find many group deal sites are slack on include:

  • An accurate and full description of what’s on offer, including a link to more detailed information if appropriate. This is often a problem with gadgets: it’s hard to commit to buying an Android device if you don’t know what version it’s running and what processor it sports.
  • Ensuring that claimed discounts reflect the regular price, not a theoretical price which no customer ever actually pays.
  • Having a clearly-stated refund policy.
  • Ensuring customers who opt-out of receiving messages from a group deals site are unsubscribed within five days. I’ve made the point before that enforcing even a five-day limit is pretty ludicrous: how hard is it to update a database?
  • The policy also states that complaints should be acknowledged within five days, which again seems a tad on the lazy side. An automated complaints message could be sent instantly, even if a more detailed follow-up will take some time.

Ultimately, any business which follows the basic principles of good business — don’t deceive your customers, offer genuine value, and make sure you communicate effectively — shouldn’t need a specific code of practice. The fact that one exists (and is being promoted) does suggest group deal sites need to do a bit of work to repair their image.

How would you like to see the group buying experience improved? Tell us your ideas in the comments.

Group Buying Code Of Practice


  • What about including additional “discount vouchers” in the overall discount saving.

    I got sucked in buying a manicure/pedicure for my wife for $30 bucks and they said it was 70% off.
    So I thought it must have been $100 normally.
    Fine print was though that a normal visit was $50, and then they included a $15 vouchers for a future visit.
    One visit was 40% off and the second was 30% off – You average them 35%!! NOT ADD!

    When I complained all I got was “sorry you feel that way”

  • I’ve purchased 3x Groupon restaurant deals in the past and each worked as advertised. The last one was an all-you-can-eat pizza and beer….we had exceptional service, decent food and grog, and ended up closing the place down. Most importantly, I’ve been back since to pay a full price dinner.

  • I have purchased a lot of items / services through this scheme and have always received the items in a reasonable time and never had a service defaulted on. I always check prices / brands prior to purchase to make sure that I get the right sort of bang for my buck.

  • How about making it easier for people to sell deals they no longer want. Yes, people buy and change their mind – so supporting a secondary marketplace as a legitimate customer service offering would be great. disclosure, yes redealize.com.au is a place to sell unwanted deals.

  • Hi Angus – I run a tier 2 group buying site and I’m happy to see the big 8 finally step up to the plate with this. The issues that they have had with customers and merchants disproportionately impact our relationships with these groups. If you’d like a more granular look at what the impact of these changes will be just drop me a line.

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