St. Louis, Mo., Feb. 29, 2012 - St. Louis Daily Deals an Internet-based business modeled after discount giant Groupon, apparently has shut down, leaving several companies unpaid and consumers holding potentially worthless coupons, the Better Business Bureau (BBB) warns.
The BBB urges businesses and consumers to be careful when dealing with companies selling discounted coupons to the public. Such companies typically sell vouchers for everything from lawn care to housekeeping services at deeply reduced prices. Companies that market the coupons usually keep a percentage of the money and turn the rest over to the businesses.
The owner of a St. Charles, Mo., house cleaning business said St. Louis Daily Deals still owes her thousands of dollars after collecting money for coupons and then not paying her. ”I am very angry,” she said. “I just don’t understand how they could do this to somebody.” She said she is struggling to honor the coupons, even though it has been extremely difficult.
Michelle Corey, BBB president and CEO, said the collapse of St. Louis Daily Deals sounds a warning to companies looking to market their products or services to new customers. “The potential of discount couponing is certainly there, but there is a risk too,” she said. “For businesses and consumers, the message is the same: Go in with your eyes wide open.”
Lorilee Cummings of Warson Woods, Mo., is listed on Missouri secretary of state records as the registered agent of St. Louis Daily Deals, the only St. Louis area person on the state documents. Both Cummings and her husband, Bill Cummings, have identified themselves as owners of the company.
The couple has not responded to phone messages from a BBB investigator.
The owner of the St. Charles house cleaning service said she contracted with St. Louis Daily Deals in November to offer $200 cleanings for $79. She said the contract called for St. Louis Daily Deals to keep 30 percent and pay her 70 percent of the coupon price. When St. Louis Daily Deals did not pay her for 80 sold coupons within the 30 days stipulated by the contract, she tried several times to contact the couple, without success. She said Bill Cummings eventually paid her for a third of the coupons that had been redeemed. In an email Feb. 8, Cummings told her to “please be patient. We are transitioning the company and everything should be complete in the next couple of weeks. You will be paid.”
The owner of a house cleaning service from Barnhart, Mo., said he also contracted with St. Louis Daily Deals in November to offer cleanings normally priced at $105 for $49 each. He said St. Louis Daily Deals sold about 90 of the coupons, collecting more than $4,000, but has paid him nothing. In a Feb. 13 email, Bill Cummings told him that he will be paid when the sale of assets is complete. The businessman said he already has done 41 cleanings, but is telling coupon holders that he can no longer honor the vouchers until he is paid. “It’s killing us,” the businessman said. “It’s bad.”
The owners of a Kirkwood, Mo., spa said St. Louis Daily Deals sold about 60 discount coupons for facials at $35 each, bringing in more than $2,000. The owners said they have yet to receive anything. They said they have absorbed the cost of 20 facials, but are telling other coupon holders that they cannot continue to honor the coupons. One of the owners said she asked Lorilee Cummings what had happened, and Lorilee Cummings replied: “It’s complicated.”
Shortly before its website was shut down, St. Louis Daily Deals described itself as “family owned and operated by people who live right here in our own community. We love our city and all it has to offer, and we are committed to supporting local businesses by offering unique deals that showcase everything that makes our town special.”
The BBB suggests that consumers exercise caution when considering purchasing discount coupons through third-party marketers. Look closely at the history of both the coupon sellers and the small businesses that will be redeeming the coupons. It is often best to buy only those items or services you truly need or want. Check for a BBB Business Review by going to www.bbb.org or by calling 314-645-3300.
The BBB also offers the following advice to businesses considering contracting with a discount coupon marketer:
- Does it make good business sense? Can you still make a profit from the discounted coupons or will any losses be offset by attracting new customers?
- Make sure you have a written, signed contract agreeing to all terms of the arrangement and make sure you have read it carefully.
- What are the payment arrangements? Will you be paid as soon as the marketer is paid, or are you asked to wait for two weeks, 30 days or longer for your money?
- Stipulate in the contract the maximum number of coupons you will honor, so that the deal will not be oversold.
- Check for a BBB Business Review by going to www.bbb.org or by calling 314-645-3300.
Contacts: Michelle Corey, President & CEO, 314-584-6800, firstname.lastname@example.org, or Chris Thetford, Vice President-Communications, 314-584-6743, email@example.com, or Bill Smith, Trade Practice Investigator, 314-584-6727, firstname.lastname@example.org