Daily deal sites frequently attract criticism when they get caught exaggerating how much money you're saving. Recently, an undercover investigation found that a deal advertised on Groupon (GRPN) was actually more expensive than the original price.
ABC's "The Lookout" booked a stay at a "luxury hotel" in the Dominican Republic through Groupon Getaways at a price of $173 a night for a junior suite -- a 44% discount, the site claimed. But another ABC producer booked directly with the hotel and got a "deluxe room" for $146. When they arrived, they discovered the rooms were exactly the same, which means they actually paid more by booking through Groupon.
That's not all they discovered on arrival. According to the report, the "private beach" turned out to be a public beach teeming with drug dealers and prostitutes. Oh, and some of the prostitutes were actually hotel employees.
Groupon, which fired founder and CEO Andrew Mason earlier this spring, runs plenty of good deals, but it's gotten a lot of flak for deals that don't live up to expectations. But this latest fiasco takes things to the next level, and ABC notes that the site doesn't research or fact-check the claims made by hotels offering deals through the site. That doesn't mean you should ditch Groupon altogether when it comes to booking vacation, but you should do your own research and always take a deal site's claims with a grain of salt.
According to the report, Groupon has received enough complaints about the hotel that it's removed it from the site. We've reached out to the company for comment and will update when we hear back.
Update (1:45 p.m. ET): A spokesman for Groupon confirmed that the deal was removed after numerous customer complaints, and that unhappy customers received full refunds. He also explained that "travel prices fluctuate dramatically" and that the company proactively checks prices and adjusts its deals if it finds a lower price.
He also denied that the post promised a private beach.