Groupon Australia defends itself against accusations of “bait and switch” tactics over iPad 2 deal

By Patrick Stafford
Thursday, 01 September 2011

The head of group buying site Cudo has accused Groupon Australia of engaging in "bait and switch" tactics for advertising a deal for an iPad 2 in a daily email but only emphasising the price of an accompanying docking station product.


However, Groupon Australia managing director Patrick Schmidt has hit back at the accusations, saying the company has accurately described the price of each product on its website, pointing to another feature that highlights the different price combinations before users commit to purchase.


Billy Tucker, who has previously accused Groupon Australia of using "bait and switch" tactics, says the advertisement in the daily email that highlights an iPad 2 is "shocking".


"I think this is incredibly bad for the industry. I have no idea why they would be so willing to do something that is so misleading."


"I hope to God no Australians click on it and then have their credit card debited for $800 dollars, but I probably think that's not going to happen."


The issue is that in Groupon's daily email, it advertised an iPad 2 and a Phillips docking station, but only seemed to emphasise the price of the docking station, which was $169. But when users actually go to the site, they see the full price of the iPad 2 and the docking station together is several hundred dollars.


Tucker also says the price under the "Buy Now" option says "from $169", potentially misleading users.


However, Schmidt informed SmartCompany this morning that Groupon Australia had changed the price on the website to better reflect the more expensive of the two options at $849.


However, he denies Tucker's accusations. He points to the email subject line, which states "iPad 2 with Docking Station", and says the company did not include a price there specifically so that consumers would not be misled over the two different products.


"There is no price included there. This is what we call a multi-deal, where you can choose from two different options."


Tucker says the problem is not necessarily the subject line, but the preview within the email that appears to show the iPad being advertised for $169 without differentiating the two deals.


Schmidt admits that this "is a technical limitation".


"We are one of a very few sites that can do multiple deals. But what we cannot do is show that in the email – it's simply not possible."


However, Schmidt does not believe users will be misled by the deal, pointing to a pop-up box that appears after users press the "Buy Now" button. There, users will be asked which of the deals they want to purchase, along with the full price of each.


"It's very in your face," Schmidt says, although he admits the email "may not have been perfect".


However, he also says this happens multiple times a day, and questions why others are criticising the company over this deal in particular.


"There is nothing we are doing here that is on purpose, and there is nothing we are doing that will benefit us. I've seen many examples of this in the past as well."


Tucker has taken Groupon to task on his personal blog over similar matters earlier this year, and in the United States the group buying giant has been criticised for advertisements that potentially could have misled the public.

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