Group Buying Code of Practice Tightens

Group buying has proven popular in Australia. In 2012, the market generated $504 million, and according to a December 2012 study by Telsyte, the top five sites showed year-on-year growth of over 9%.

However, it is not all roses. Competition is fierce and the size of the market is not expected to grow as strongly this year. That means we can expect consolidation at some point.

But the industry has also suffered from a range of issues and has been the subject of complaints from consumers and merchants alike.

To combat this, ADMA, the principal industry body for data-driven marketing and advertising, became involved in writing the Group Buying Code of Practice last year.  The aim was to set a best practice benchmark for group buying in Australia.

The code which is voluntary, boasts foundation members Cudo, Groupon, LivingSocial, OurDeal,, Ouffer and Scoopon – but Spreets has changed its business model and will no longer be a signatory to the Code.

A recent review recommended changes to the code, which the ADMA Code Authority will be enforcing. The changes to the Group Buying Code of Practice include:

  • New Code Authority powers to spot check group buying company compliance
  • Requirements for more detailed terms and conditions (no more surprises for consumers)
  • Tighter controls over how many vouchers are sold – helping ensure merchants understand and can meet their obligations
  • Clear and unambiguous refund policies which must be readily accessible with each offer
  • Improved complaints handling with defined response times for queries and complaints (1 business day) to reduce consumer frustration
  • Defined complaint resolution timeframes set at 10 working days — unless there is a reasonable expectation the process will take longer — but no more than 30 days.

The ADMA Code Authority will proactively conduct checks on the websites and offers made to the public. Signatories can be identified by the Group Buying Code Member logo which will be on their websites and offers.

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