Liann Potts estimates she does 90 per cent of her shopping online, for one main reason.
“I just find that I can't put up with the customer service in stores, so I tend to shop online to avoid it,” she says. But the online advantage evaporated when she tried e-retailer Dealfind.
Marketplace received dozens of complaints from exasperated Dealfind customers citing subpar customer service, defective products, oversold services, missing deliveries and an inflexible refund policy.
Potts, who lives in Winnipeg, used Dealfind to buy a steeply discounted computer tablet as a wedding fundraiser gift. She paid just $200 for a product with an advertised value of $490.
It sounded like a great deal, but the tablet arrived almost two months after the wedding party. She wants a refund but all she’s received is an email from the company telling her to stop contacting them.
“It's aberrant,” she told Marketplace host Tom Harrington. “I would never ever expect anybody to be treated like this.”
Online discounts ‘deceptive’
Dealfind’s business model, like many of its competitors, involves getting businesses to offer discounted products or services with the promise of attracting lots of new customers.
It’s a popular concept; a Marketplace survey found 71 per cent of Canadians are familiar with group-buying websites like Groupon, Wagjag and Dealfind. Of those, 49 per cent made online purchases, spending approximately $350 million last year, according to the Canadian Deals Association.
But it’s a problematic business model, Marketplace found, starting with those tempting discounts.
The site tempts customers with inflated product values to make the markdown more impressive.
Marketplace purchased a pair of diamond and sapphire earrings, which Dealfind says are valued at $299, for just $24 on sale, a 92 per cent discount.
While many physical retail stores do that, Western University marketing professor June Cotte argues it’s more misleading when done online.
There’s a difference in the offline versus the online world, she says. “The offline, when they put a retail value of this manufacturer's suggested price, you can say, well, that's ridiculous, because you can compare and you can see the product. In this case, you can't and so … it seems far more deceptive to me because you can't really tell what these earrings are like.”
The earrings Marketplace bought did arrive, but the appraisal was less than dazzling. Andrew Tatarsky, an expert with international gemologist GS Laboratories, found cracked, dull, industrial-grade stones he figured are worth around $50, a fraction of Dealfind’s valuation.
“I think [$299] sounds a little excessive for what you’re getting,” he said. “You can’t really buy something that lists at $299 for $24 … it just can’t be done.”
'I’m beyond angry'
Dealfind CEO Ghassan Halazon says those deep discounts can happen for many reasons, and that the company isn’t misleading anyone.
“There are different mechanisms as to why [businesses] are looking to give out these types of deals,” he argues. “Whether it's to bring in more customers, whether it's to off-load inventory, whether it's to get rid of old models, whether it's to bring people to the website. There are various scenarios. I mean, [regarding the earrings], I'm not saying that what you may have found is true or not. I don't know enough right now. We could take a look at it.”
While customers may be disappointed with their purchases, others find they’re difficult to get at all. Many customers report that products are oversold, or appointments for services are near-impossible to arrange.
Andrea Moniz bought a discounted package for a Calgary spa in 2011, but Dealfind initially booked her for a date when the spa was closed, and she couldn’t rebook for another six months.
Two years later, she still hasn’t had her appointment.
She claims Dealfind did a poor job responding to her complaints. Emails went unanswered and the company doesn’t list a phone number.
“I’m beyond angry,” she said. “I’m now just hoping that my experience can maybe prevent other people from losing money to a company who clearly doesn’t care about customer service.”
Dealfind ultimately responsible, expert says
Cotte was incredulous at their stories.
“I think it's amazing [Dealfind] is still in business,” she said. “There's no question that that is unfounded and unethical business practice.”
Halazon argues the businesses are often to blame in cases like Moniz’s spa treatment. He says some merchants are too greedy or don’t plan well enough, then find they can’t accommodate the flood of customers gained through Dealfind. Cotte concedes the businesses bear some blame, but as the seller, Dealfind should take responsibility.
“They need to take care of [customers], she said. “They need to vet the merchants to make sure what they're selling is actually what they say it is. They need to make sure that customers who have a bad experience … need to be resolved.”
Potts eventually turned to the Better Business Bureau for help, but says Dealfind ignored the complaint.
Dealfind announced a merger with competitor Teambuy in January, and Halazon says the new company’s customer service will improve.
Potts and Moniz both say they’re done with the company, and are encouraging others to avoid it as well.
“[Getting] my money back would be amazing, but just a response from them would be great, yes or no, are you going to give me my money back?” Moniz said. “If they’re not going to be upholding their end of things and standing behind their partners then they shouldn’t be in business any longer as far as I’m concerned.”
Watch Marketplace's episode, What's the Deal?, Friday at 8 p.m. (8:30 p.m. in Newfoundland and Labrador).