Will Refunds Be the Death of Groupon?

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Something's just not right at Groupon (NAS: GRPN) .

It's been a couple of days since I put in a request for a refund. I don't know if I'll get it. Silly me for signing up for a go-carting experience several hours away as rainy season's approaching.

However, I figured I would try to see if I could at least get that money back in Groupon Bucks to deploy closer to home. Groupon's customer support boasts about getting back to its users within a day of filing a complaint, question, or refund request.


It didn't happen.

"Thank you for contacting Groupon," read an automated email response to me yesterday afternoon. "Due to the high email volume, we are running behind our normal 24 hour response time. We are battling this volume with every tool we have at our disposal and feel confident that we will emerge victorious. This victory will result in a detailed response to your email, a swift resolution of your issue and a warm feeling in your belly."

Is it just me, or does Groupon sometimes overdo it on the cutesiness? There are times when I'm reading a daily deal and the writer is going for style points instead of telling me exactly what I could be buying.

I'm not worried about the lateness of the response. If anything, I'm guessing that the delay will mean that Groupon is even more likely to give me the site credit that I'm requesting.

However, this is a situation worth sharing because it's been three weeks since Groupon warned that it would be restating its financials for the holiday quarter because of the need to increase its loss reserves on refunds.

It can't be a good sign if its customer service staff is so swamped that it's falling behind here. Are refund requests like mine pouring in? Is the company in the process of revamping its policies to the point where there's a bottleneck this week? Are folks generally more unhappy with Groupon this week than its staffing requirements planned for? One can always argue that my case requires some more research on Groupon's part, but that would seem to go against the automated nature of the email response.

Meanwhile, the already crowded daily deals space is running low on elbow room, even as some biggies including Facebook and OpenTable (NAS: OPEN) have decided that daily deals are too costly to pursue. MasterCard (NYS: MA) announced earlier this week that it would be helping its bank and merchant clients serve up "relevant and geo-targeted offers" to its plastic-wielding masses. In short, credit card marketers are charging in.

Be careful, MasterCard. Make sure you warm up the support staff for the inevitable wave of refunds.

As for Groupon, good luck on that "emerg[ing] victorious" part.

If you want to follow the daily deals leader to see if it becomes a bargain itself, addGrouponto My Watchlist.

At the time this article was published The Motley Fool owns shares of MasterCard. Motley Fool newsletter services have recommended buying shares of OpenTable. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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