Groupon's coupon expiration examined in Connecticut

Chicago-based Groupon Inc.'s practice of selling group-discount coupons with expiration dates is being reviewed by Connecticut Attorney General George Jepsen for possible state law violations.

“It appears that what Groupon Inc. sells or offers may fall within the definition of a gift certificate under Connecticut law,” Jepsen said in a press statement issued yesterday. “Connecticut law prohibits gift certificates from being sold or issued subject to an expiration date.”

Nationwide consumers have filed at least 12 federal court lawsuits challenging Groupon's business practices. Cases, including those originally brought in Illinois, California, Massachusetts, Washington, Alabama, have been consolidated for pre-trial proceedings before U.S. District Judge Dana Sabraw in San Diego.

Jepsen, in a July 12 letter, asked Groupon Chief Executive Officer Andrew Mason how his company's certificates are bought and redeemed, how many have been sold in state, which retailers have accepted them and the typical terms of those agreements.

The attorney general also asked about expiration dates. Groupon has until Aug. 5 to reply.

Groupon delivers daily discounts on hotels, restaurants and other goods and services to 83.1 million subscribers. The daily deal market pioneered by Groupon may generate $3.9 billion in U.S. sales in 2015, from $873 million in 2010, according to the research firm BIA/Kelsey in Chantilly, Virginia.

Julie Mossler, a spokeswoman for the company, didn't immediately reply to voice-mail and e-mail messages seeking comment. The company last month announced plans to raise $750 million in an initial public offering.