In Re: LivingSocial class action

Or what to do if you stuck with a LivingSocial voucher which has expired?

Usual disclaimer – I’m not a lawyer and this is not legal advice. Use it at your own risk.

A few months ago I purchased a “voucher” from LivingSocial for a Golden Gate Park Segway Tour. LivingSocial presented the voucher as great deal, but they oversold them, and after a week it was not possible anymore to book the tour any time before the voucher’s “promotional value” expired. I put it in the list of things to deal in 2013, and forgot about it.

It didn’t have to wait long. Apparently LivingSocial business practices annoyed enough people and they finally got sued for that. There is a class action called “In Re: LivingSocial Marketing and Sales Practices Litigation” which I received the notification about. The plaintiffs claim issuing “vouchers” (which are de facto gift certificates) with the expiration date is against the state laws. While the LivingSocial “voucher” stated that “the paid value never expired”, personally I don’t see how they could get around this restriction in the California law.

The California Civil Code 1749.5 is very clear that a gift certificate cannot have any expiration date:

1749.5.  (a) It is unlawful for any person or entity to sell a gift 
         certificate to a purchaser that contains any of the following:
   (1) An expiration date.

As you see, there is no mentioning of any “promotional value”. It is worth noting that LivingSocial is not unique here. Several retailers such as Costco sell gift cards below their face value (like $100 gift cards for $79.99). None of them have any expiration dates.

More details about the settlement are available at the settlement website: http://www.livingsocialvouchersettlement.com/

As it typically happens with class actions, the parties reached an agreement, and we are notified about the proposed settlement. As it happens more and more often nowadays, the settlement provides no meaningful benefits for most of the Class Members. Therefore the most reasonable strategy is to exclude yourself from the class action.

In this case the settlement is only relevant for those Class Members who have the unused LivingSocial vouchers they purchased prior to Oct 1st, which are already expired. If you’re not one of them, there is nothing you can personally gain from the settlement. Considering that by staying in the Class you’re losing the right to sue LivingSocial for that and you’re not getting anything for losing that right, the most reasonable choice seem to be to exclude yourself. Fortunately the Administrator made it easy, and the exclusion request could be submitted online so you don’t even need to send anything by mail.

Now for those Class Members who do have unused expired vouchers from LivingSocial – and I am one of those – the settlement establishes a compensation fund which is supposed to reimburse us for those vouchers. Here it is important to notice that the fund has limited funds, and the members will be compensated pro rata up to 100% of the voucher cost. This means that you may not get all the money you are owed (if there are more claims than funds available), and to get even those you need to submit a claim.

Therefore staying in the class is a bad choice as it doesn’t guarantee you recover all your funds. Therefore I suggest a different strategy which I successfully pursued myself.

First you need to exclude yourself from the Class by submitting the exclusion request online.

Second you need to write to LivingSocial, either through their online contact form or by postal mail sent to:

1445 New York Ave NW, Ste 200, Washington DC 20005

Here is what I wrote, you should adapt it for your specific circumstances:

<Your name, address, phone, email, LivingSocial account>

On <date> I purchased the gift certificate from my LivingSocial account <account>. The gift certificate number is <number>. The merchant providing the service was overbooked and I never had a chance to use the gift certificate before it expired <if you were unable to use it for the different reason, describe it>.

Recently I received the e-mail from the Class Action Administrator IN RE LIVINGSOCIAL MARKETING AND SALES PRACTICES LITIGATION and learned about the class action settlement which is settling exactly the same issue. The settlement provided me with an option to submit the claim and obtain the refund for the unused expired certificate. However I have been involved with the class action settlements in past and had very poor experience in getting a refund this way. Therefore I have excluded myself from this Class Action, and I’m going to bring my own refund claim against LivingSocial in the court.

I have read the Amended Complaint and on my information and belief Hungry Machine, Inc. dba LivingSocial indeed violated the California gift certificate law as well as possibly other laws. I believe there is no doubt a court would agree with those arguments listed in Complaint and a positive court verdict is very realistic. Therefore I see no reason to settle with LivingSocial for the less than the amount I have paid for the certificate.

Hereby I request LivingSocial to promptly refund the amount of <amount> I paid for the expired gift certificate <number>. The refund could be done either by a credit to the original card or by a check mailed to the address listed above.

If my refund request isn’t honored within the next three weeks, I will file the complain with the Small Claims court.

I was indeed ready to go to the small claims court, but it wasn’t necessary since within a week LivingSocial refunded the full price I paid for the gift certificate.

This entry was posted in class actions.

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