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Charles Rex Arbogast/The Associated Press

Some small business owners in Quebec say Groupon Inc. has left them in the lurch amid signs the company is scaling back its operations in the province.

Eloise Lafreniere, who owns the Davelo Beauty Institute in the Montreal suburb of Carignan, says the daily deals company owes her $11,500 after her salon launched a promotional campaign for facials and other treatments with Groupon in February.

She hasn’t received a cent since, with calls going unreturned and e-mail replies coming late, she said.

“They would always delay us by a week, saying, `Oh, you’ll receive the payment next week,“’ said Ms. Lafreniere. “We started to become worried.”

She got in touch with a lawyer and is now considering a class-action lawsuit. “We are not the only ones not to have been paid. There are multiple businesses in our situation,” she said.

Jean-Benoit Daigneault, who runs the Heli-Tremblant helicopter tour company, said Groupon owes him nearly $2,000. He said he’s been forced to reject passengers’ coupons as a result.

“It’s not a big amount. But it’s a question of customer relations, and that’s not good,” he said. “I’m not even able to contact them to say, ‘Stop selling it.“’

“I tried to contact my sales representative; the phone number was shut down. Their general inquiry number was shut down. And the only way you can contact them is send them an e-mail, but there’s nobody who replies,” Mr. Daigneault said.

Groupon, which shuttered its Montreal sales office in March, said it issued payments Thursday following a story in La Presse, but the business owners say they have yet to receive a cheque.

The company said the delayed payments “were broadly merchant communication/education issues and were not in any way related to external factors – competitive or otherwise.”

“Groupon will of course pay all Quebec merchants for Groupons that they’ve successfully redeemed – and continue to redeem,” spokesman Nicholas Halliwell wrote in an e-mail.

“While Groupon no longer staffs a discrete sales office in Montreal, customers in Quebec can continue to purchase local deals, products and travel.”

The rest of the 11-year-old company’s Canadian markets have “long been served” out of its U.S. headquarters, he added.

Some confusion has nonetheless set in.

Quebec’s Consumer Protection Office received a complaint on May 15 about the company and a spa that would not redeem a coupon purchased from Groupon. The complaint “appears to have been linked to the news of a possible end of Groupon’s activities in Quebec,” office spokesman Charles Tanguay said in an e-mail.

The business model works like this: Customers pay Groupon for a discount deal with a retailer; when the customer uses the coupon, Groupon passes that cash on to the retailer, minus a commission – typically between 20 per cent and 25 per cent of the purchase price.

Once a giant of the online discount marketplace, the Chicago-based company has seen its share price – which breached US$26 after its initial public offering in 2011 – dwindle to below US$5 for much of the past four years.

Revenues have fallen nearly 13 per cent over the past three years to US$2.64-billion in 2018, and the company has lost money eight of the past 10 years.

For François Thivierge, owner of Aventurex rock-climbing gym in Quebec City, the relationship has been smooth for three years.

“We haven’t had any problems yet,” he said, touting a Groupon discount for an ice-climbing package and an “indoor ninja program.”

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 6:55pm EDT.

SymbolName% changeLast
GRPN-Q
Groupon Cl A
-0.7%12.82

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