Mum takes on Groupon after major error
When a 31-year-old Aussie mum secured her dream business she never expected she’d need a second job just to stay afloat.
A Brisbane single mum says she’s been thrust into a David-versus-Goliath battle with global discount giant Groupon.
Tomi Cao, 31, says her dream is hanging by a thread after an error left her thousands of dollars out of pocket.
She poured every dollar she had into buying a wellness spa, but just a month in she’s had to take a second job to stay afloat.
“We have been working for free,” Ms Cao told news.com.au.
Ms Cao was inspired and full of hope when she took over AN Head Spa & Wellness in Brisbane at the end of October.
“I was so hopeful going into this business that I could turn it into something great. I see so much potential in it,” Ms Cao shared.
But the customer base she inherited came with a nightmare catch.
The previous owner notified Groupon the business would be changing hands, requesting all campaigns be paused.
“There was a lot of pushback,” Ms Cao alleges.
“They insisted they needed to speak to me, because at that point there were well over 300 vouchers already sold that were unredeemed.”
The business was a ‘priority partner’ due to how well it had been performing on the platform.
“There were so many vouchers being sold through their platform. We’ve got an average of a 4.98-star rating with 112 reviews,” she explained.
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Ms Cao decided to honour the existing vouchers, spending the first week of November buried in their admin.
“I submitted every document that was requested of me,” she recounted.
But two weeks on she realised no payments were coming in as predicted. Her merchant portal claimed she had $0 revenue, redemptions and zero vouchers issued.
“I’d had proof in writing that they reassured me everything had been updated,” she said.
With no visibility from Groupon, she has had to rely on her own point-of-sale reports to track services provided.
“The estimate is between $7,000 to $12,000 that they owe me right now,” she alleges.
She says the figure is still climbing.
“It’s increasing because every single voucher I’m redeeming every day is added to that amount.
“On our system it’s showing that we have provided, from the 31st of October till now, more than $20,000 worth of full-price value treatments for Groupon.”
On November 17, Groupon finally told her where the money had gone.
“They finally admitted that the funds were misdirected to the wrong account. To the previous owner’s account,” she said.
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Ms Cao claims that she had repeated assurances that the payments wouldn’t go to the former owner.
“This is pure negligence on their end. I’d raised it and I even suggested this could be the problem,” she said.
She claims her concerns were brushed aside with “generic copy-and-paste responses” when she reached out for updates.
“It just seems like a generic Chat GPT response to me,” Ms Cao claims.
Meanwhile, Groupon appointments have continued to fill her bookings calendar.
“We can’t get paying customers in the door,” she pointed out.
Reaching the previous owner hasn’t been straightforward. She’s overseas and now a full-time carer for her husband, who has a cancer diagnosis.
“I just don’t have it in me to push her in that situation,” Ms Cao said.
The former owner confirmed to news.com.au that her final communication with Groupon occurred on November 17. The same day they acknowledged the error with Ms Cao.
“I was informed that a payment had been made to me in error,” the former owner told news.com.au.
She requested written documentation with proof of the mistransfer, so she could return the money correctly to Groupon.
“Transferring the funds to the new owner’s bank account is not appropriate and does not resolve the accounting or tax implications on my side,” the former owner explained.
“To date, I have not received any written evidence explaining the mistake, nor confirmed bank details for the original paying account.”
For now, her hands are tied.
“Until the required documentation and correct bank details are provided in writing, I am unable to take any further action. This issue did not arise due to any error on my part,” she explained.
Ms Cao took to TikTok to air her frustrations and make customers aware of what was occurring behind the scenes.
It’s completely unethical,” she claims.
“If I don’t speak up for my team and defend my business, no one will,”
She also shared her decision to no longer accept new Groupon bookings.
Ms Cao alleges Monday morning was the first time Groupon tried to call her. It was not to fix the issue, but to urge her to delete the video.
“I’ve spoken to their account manager yesterday for the first time since this whole things went down, and the only reason they reached out was to ask me to take down my social media post. I declined. It’s disappointing that it took public pressure and media attention for them to even pick up the phone,” she claims.
Many customers have been understanding of her situation, feeling sympathy. Others have been hostile.
“The reputation is what I’m working so hard to try to protect,” she explained.
She says she and her staff have been left to absorb much of the frustration, which has only added to her emotional toll.
“It’s causing me a tremendous amount of stress. From what should be a really good, exciting time,” she said.
“I’m bootstrapping this whole thing. I’m working another job to try to support this … I’m trying everything I can to pay people.”
She currently has no choice to honour customers who have currently already booked with a voucher in her system.
“At this point we’ve already got customers booked with the vouchers until January 26,” she revealed.
This morning, Ms Cao revealed a small payment from Groupon had been made to her.
“We finally received a small payment from Groupon for last week’s redemptions (a week’s worth), the original amount they misdirected to the previous owner is still outstanding,” she claims.
“They’re now saying the payout is still ‘pending approval’, but couldn’t give a date or guarantee suggest it might be sometime this week. They’re also refusing to confirm whether they’ll proactively contact customers for refunds, which means my team is still the one dealing with angry and confused customers as they would still come to us first before being directed to them..”
“Even after I made my stance clear multiple times, they were still trying yesterday to convince me to keep accepting old vouchers, framing it as ‘easy customers’ because they come directly to us saying how it would only help my business. It’s evident they are trying to avoid issuing refunds, despite the circumstances.”
Ms Cao has lodged a formal complaint with the ACCC.
A spokesperson from Groupon told news.com.au:
“We’re sorry for the frustration this situation has caused, this is not the experience we want any partner to have when working with Groupon.
In this case, payments continued to be sent to the previous owner as the required documentation confirming the ownership change had not yet been finalised. Once the change was verified, we escalated the matter immediately and approved payment to the new owner. The payment is expected this week. We are in direct contact with both parties; recovering the funds issued to the previous owner and ensuring that customers are fully supported.
We recognise that this transition could have been handled more smoothly and apologise for any inconvenience caused. Our focus remains on resolving this matter in good faith and supporting the small businesses who rely on our platform.”
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Originally published as Mum takes on Groupon after major error
