Ethics and the offer… FTD’s Valentine’s disaster with Groupon.

Practically the biggest day in the year for florists and certainly huge for FTD and then…a PR disaster when it was discovered that the “ethics” of the sales offer seemed to be lacking.  When the time is right for your sales opportunity, the one thing you don’t want is to find yourself in a firestorm of controversy over lack of ethics in your sales practices.  Yet, that’s exactly where FTD finds itself on the eve of Valentines Day.

The story goes like this…according to an ABC News report…

The problem surfaced when several Groupon customers found the flowers they bought were priced lower as sale items on FTD’s own website. They complained on the Groupon site and the Internet that FTD was making up for the Groupon discount by jacking up the prices.

But FTD Group Inc. President Rob Apatoff said in an interview on Sunday that wasn’t the case. He said it was clear on the sites that the coupon didn’t apply to sale items.

So…let me get this.  FTD offers through Groupon flowers for Valentine’s Day for $40 at a 50% discount or flowers purchased for $20.  Great deal or so the purchasers thought.  Then they saw the same flowers for less than $40 on the FTD site.  What would you have thought?  Did FTD jack up the price of flowers offered through Groupon so that it would appear that the purchasers were getting a better deal?

The ABC reports says…

“At no time did we inflate any prices. Absolutely not,” Apatoff said. “Because there was some confusion with a few, we decided to step up and do the right thing to make sure everybody was happy.”

Even with the higher price on the Groupon site, Groupon customers always got a better deal with the $20 coupon than buying from the FTD site, Apatoff said. Discounts on the FTD site were $5 to $10 lower than the price on the Groupon site, he said.

So…here’s what he said…I think.  The Groupon price = $40 for flowers with a 50% discount.  The same flowers on the FTD site may have been $30 say…so according to Apatoff they still got a better deal with Groupon.  But Mr. Apatoff…that’s not the point.  If the price of the arrangement is $40 through Groupon then it should be $40 on the FTD site.  Ethics are ethics and when you have a price – that price should be uniform to the buying public otherwise, how will the consumer believe the benefit of buying through you or using the Groupon coupon?

Groupon responded quickly…again the ABC report states…

Groupon Inc. officials started seeing the complaints on Thursday and contacted FTD about the problem, President Rob Solomon said on Sunday. Together, they decided to credit the accounts of people who bought the sale items through Groupon, giving them the difference between the sale price and the price that was on the Groupon site, he said. The companies also put the FTD sale prices on the Groupon site, he said.

Groupon has people who monitor Internet prices on coupon items to make sure there are no discrepancies, and they catch differences in most cases, Solomon said. He called the FTD case a rare exception.

In the world of instant data transfer and everyone being a “watchdog” of sorts with a cell phone, recording equipment, etc. companies have to be vigilant in the ethics of their sales offers and the transparency and integrity of their business practices.  Did FTD intend this?  No way.  But, most would agree that the ethics of this situation certainly created more damage for FTD than any extra sales they could have received this Valentine’s Day.

As for me…I went to Wal-Mart and found great flower deals.  One dozen beautiful fresh roses for $15 and a awesome spring arrangement for the same.  Were they priced right?  I don’t know…all I know is I get two to three times as many flowers as I would have otherwise gotten through an FTD florist and the savings and beauty made my wife very happy.

Perhaps this is a lesson in how the changing face of marketing can make or break you – one ad at a time.



One Response to Ethics and the offer… FTD’s Valentine’s disaster with Groupon.

  1. Very interesting! Great work breaking this down.

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