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Groupon miscue menaces downtown restaurant

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A Groupon deal sold so well it promised to drive a herd of diners to Creation Cafe.

Trouble is that the popular eatery along Canal Walk said it didn’t agree to Groupon’s offer of a 62-percent discounted dinner to 2,600 diners—who are now coming in to redeem the deals.

“What do you mean you can’t use them?” Creation co-principal Lynn Shepherd said of the reaction by many diners after restaurant staff break the bad news.

Shepherd said the Groupon deal that ran Sept. 30 to Oct. 3 wasn’t the deal Creation had been negotiating with Chicago-based Groupon, a claim the company disputes.

Creation said it was the first restaurant in Indianapolis to work with Groupon, but its fifth and latest deal might be its last.

“We are extremely upset by this entire fiasco and want to thank our customers for their patience and understanding,” the restaurant says in a letter to customers posted on its website.

Shepherd said Groupon put an aggressive twist on the final version of the deal that she said she was not given an opportunity to proofread.

Because the restaurant changes its menu in the fall, it is not able to offer some of the dishes Groupon included in the offer.

“If everyone redeemed [this deal] in the next six months, we would go out of the business,” she added.

Shepherd said the restaurant tried unsuccessfully for 14 days to get Groupon to inform customers the deal was not authorized. She said the Internet marketing sensation was not responsive until late Friday. Then, Groupon told Creation it would give refunds to those who purchased the deal.  As of early Monday morning, she had not seen the e-mail being prepared to customers from Groupon.

Fortunately, most customers coming to redeem the errant Groupon deal have been understanding, Shepherd said. Free appetizers have appeased all but a few who became honked off and walked out of the building shared with Euphoria restaurant at  337 W. 11th St.

In an e-mail to IBJ, Groupon officials said the discount was not offered in error: "Groupon doesn't feature a merchant without a signed contract—we had approval from one of the owners of Creation Cafe to run this deal with all terms approved," the e-mail said. "After the deal sold more aggressively than either side anticipated, we reached out to the business to expedite payment and offered recommendations to handle the traffic. The goal of each Groupon campaign is to bring valuable customers to every merchant while guaranteeing a great experience for our subscribers. When it became evident that Creation wasn't going to take care of our customers, we canceled the deal and offered all purchasers a refund."

Shepherd said she isn’t sure whether Creation will use Groupon again. Despite earlier successes, she said the Chicago company’s approach has become too aggressive for her taste.

The darling of the Internet marketing world this year has faced a growing number of complaints from its customers. Several lawsuits have been filed in federal courts seeking class-action status on behalf of Groupon customers who complain the deal vouchers expired before they could use them.

Customer Jason Cohen of Delray Beach, Fla., in a suit filed earlier this year in federal court in Florida, alleges that the Groupon concept violates federal and Florida law prohibiting the issue of gift certificates with expiration dates.

“Groupon and its retail partners bank on the fact that customers often will not manage to redeem ‘Groupon’ gift certificates before the limited expiration period," states the suit.

About a year ago, Groupon turned down a $6 billion purchase offer from Google. So the latter is developing its own daily deal site, called Google Offers.

E-mail daily discount sites have become increasingly popular but are struggling to make money.

Groupon posted a first quarter loss of nearly $114 million.

“Groupon’s fundamental problem is that it has not yet discovered a viable business model,” Rob Wheeler, a fellow at Harvard Business School’s Forum for Growth and Innovation, wrote in August. “The company asserts that it will be profitable once it reaches scale but there’s little reason to believe that.”

Maybe Groupon should have redeemed Google’s purchase offer, Shepherd said.

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  • Hater
    Blythe,
    As a big fan of creation cafe, it's quite obvious you are a disgruntled former employee or a very jealous individual with a personal ax to grind. Hopefully Santa brings you a punching bag for Christmas!
  • creation ownership
    the creation cafe's "co-principal" is the daughter outgoing CEO of cummins engine company. she cares more about doing it, "her way" than what the market/customers would embrace. more concerned with, "owning a restaurant" than "running a restaurant." decisions based upon personal whims - "i saw this cute restaurant last night on HGN..." with cummins money behind you, who needs initiative, ambition and customers.
  • If you really want to know the Truth!
    If you really want to know the truth, the owners never took the time to review the Groupon and the food costs associated with the offer. After they realized it would be a loss and potentially close the business they made up this crazy story. Sad thing about it is that they never 'owned up' to the mistake and passed the buck with this crazy story about everything being Groupons fault and it really wasn't. This is yet another sad story about people getting into the restaurant business and having no idea what they are doing. Amateurs.....
  • I will stand by my Fave cafe
    I'm on the restaurants side here. I've heard horror stories about these groupons and the insanity that ensues with some local businesses. I've been going to creation for a lot of years. While the service is sometimes hit or miss, you can't beat the amazing view, awesome decor, and fantastic food. This place will always be my favorite spot in Indianapolis. No matter what happens, my family will always support this restaurant!
  • amount paid
    CK - from what I understand using my example of $15 for $30 worth of "Deep Fried Twinkies," you take the expired Groupon down to the Twinkie store and now instead of having a $30 Gift Certificate, you have a $15 Gift Certificate - what you paid.

    AND Groupon supposedly has a 100% Money B ack gaurantee, so if the Twinkie store refuses to accept it, they will refund the $15 (and I bet Groupon will ream the Twinkie store, lol).
  • wowzers!
    So let's see here. Groupon issues this incredible deal that all these people purchased, but it wasn't the deal Creation Cafe agreeded to. The owner tried to contact groupon for days to no avail. Then groupon states that they will offer refunds to all. So the consumer gets their money back, all's well, right? No. 1st, downtowner, the owners states the deal was tweaked w/o her knowledge. How does that translate into her "not paying attention"? Second, B, you bought the coupon to give them "one last try", and since groupon errored, this has somehow reinforced your food and service claims? Dean's wife, the only thing NOT "suprising" about your comment is your one, inability to spell rescinded correctly. I won't even go into the arguement about this being 2011 and you label yourself as one's possesion. I eat lunch here almost daily, and they have their shares of ups and downs, but by no means do I see them failing or being mis-managed. I see bright and cheery individuals, I see unique qualities in this place that you won't find at chain restaurants. If service or food is bad, tell the server or manager then and there. Tell me what is says about a person when the only thing that comes to mind after a not so enjoyable experience is to say, "I just can't wait to get home and write a review on this horrible, awful, place that just ruined my day,and I'll do my best to tell the world"? Support local doesn't mean only go there when they have a coupon. It means stick by them and support them and tell them when things are wrong, complain to them first, not the world. Postive attitude, positive action.
  • Boo for the Cafe!
    I attempted to redeem my Groupon last Saturday but I called the Cafe twice as the fine print said to make reservations. No one returned my call so we drove there only to find a wedding reception going on. No one to man the phones to even tell us they would be doing a special event.
    I only discovered Groupons were not being honored as I saw a note posted on the bulletin board as we were leaving.
    Groupon promptly refunded my payment.
  • Totally agree wuth Downtowner
    I agree 100%
    Creaion Cafe has good food and a great location, but the service is iffy and slow. I was disappointed but nor suprised when the offer was recended.
  • Avoid
    Do not coupon. is a move by desperate operators. Groupon is taking advantage of scared owners with no confidence in their product. You wind up getting about 25% of what you would normally charge. This will barely cover your food cost. Redemptions over work your staff. Avoid. p.s. Groupon missed the boat on the Google offer.
  • Agree with: Downtowner
    Creation Cafe has gone down hill quickly. I bought this Groupon to give them one last try. I got my refund from Groupon and will take my business elsewhere now. I don't know if they changed management or what but ever since a year or two ago it hasn't been the same, food or service wise.
  • Amount Paid?
    So Dave if the amount paid never expires, how do you get your value out of it? Can you use it toward the purchase of another Groupon? Otherwise how does the value continue?
    • Negotiate
      As a side comment ot anyone who is thinking of running a deal....do not let them take half the money! Negotiate! I had a deal where half would have been about $18. We agreed on their cut only being $6! Don't sell your own business short! Negotiate the terms of the deal. They want your business as much as you want their email list!
    • More misinformation from ladies whose names start with P
      Wrongo. Groupons technically do not expire for 5 years. If the deal was "pay $15 for $30 worth of Deep Fried Twinkies" that expire on Dec 31, 2011, your Groupon still has $15 worth of value for at least 5 years after the purchase date. Groupon had to put that in there to get around states Gift Certificate regulations. Groupon states that the amount that you paid will never expire.

      We have a clue and we know our etymology. We also know not to use CAPS, LOL. Some businesses try to change up the fine print and those clowns should have never been Groupon material.

      Read thuis from Groupon:

      •The promotional value will EXPIRE on the date specified in the offer, unless prohibited by law. The amount paid WILL NEVER EXPIRE. Promotional value can’t be combined with other offers. Doesn’t cover tax or gratuity. Not reloadable. Fully transferable.

    • Nope it's a Gift Certificate and not a Coupon
      I do agree Patti that it's up to the consumer to make sure that they use their Groupons before they expire. BUT some businesses (especially spas and salons) make it difficult to schedule, especially when they know it's a Groupon customer.

      I will say that you are wrong on calling it a Coupon. Groupon has even stated that we are not selling coupons. By point of reference, restaurants.com sells Coupons, diguised as Gift Certificates.

      I do empathise with the Creation Cafe's plight. I have heard from several businesses that Groupon changes the deal without notification, gives ZERO notice what day the offer is going to run and leaves key, agreed upon "fine print" out of deals. One restaurantuer told me that he ic counting his days down, when his one and only Groupon will expire, so he will stop losing money :o
    • A "coupon"?
      Actually, I would consider Groupon a gift certificate - and they quite often describe it as such. You pay $x for a service (meal, car wash, etc.) and don't pay more when you use your certificate. That by definition is a gift certificate.
    • Hmmm...
      Just from personal experience, I'm not really shocked that Creation Cafe has an issue. As a downtown resident and worker, I've been there several times for lunch and breakfast. Every time I go the wait is long, there are issues with our order, and I get a general sense that the staff there is just "winging it" on a day to day basis. The fact that there might have been a misunderstanding with the terms Groupon was offering doesn't shock me at all. I'm not trying to bad mouth Creation Cafe, but there seems to be a pattern of the owners not paying attention to the details.
      • Oh, please!
        Lawsuits? Really? First, a Groupon is NOT a "gift certificate" - it's a COUPON. Secondly, all deals have a CLEAR EXPIRATION DATE, so if you don't use them before they expire, how is that anyone's fault but your own? You get email reminders telling you to use your Groupon. How stupid do you have to be?

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