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Monday, January 16, 2012
Ind. Law - Maybe the AG's consumer protection division can investigate
Jenny Anchondo of Fox 59 had a story last Friday that got my attention. Here are soome quotes:
Trouble is brewing between Restaurant.com, a local restaurant and some of their customers.It sounds like both those who buy the Restaurant.Com certificates and the small restaurants who are convinced to sign contracts with Restaurant.Com without fully understanding the implications may have cause to complain.After buying gift certificates, House of Tokyo customers found out the company had canceled the deal and the certificates were no longer valid.
Joell Lasley bought the certificates from Restaurant.com to the House of Tokyo as Christmas gifts. After the holiday, she found out they were not being honored.
“I was mortified that when I found out that the gift certificates that I had been giving to family and friends were not going to be honored,” said Lasley.
Hay Duong, the Vietnamese restaurant owner, explained that there was a language barrier between him and the salesperson from Restaurant.com.
“I didn't quite understand what he was talking about, you know,” said Duong. “But I thought that when he sold the certificate that the money would go back to the restaurant.”
However, his business does not get any money out of the deal. The customer paid $10 to Restaurant.com and got a $25 dollar gift certificate to use at House of Tokyo.
“What Restaurant.com does is we sell tables and we drive revenue,” said Christin Accomando, a representative for Restaurant.com who spoke to Fox59 on the phone. “We don't bring them revenue directly, but we bring but we bring people to their restaurant through marketing our website.”
“When we asked Restaraunt.com to please take our name off of their website, they basically just didn't do it,” said Danny Bogard, a consultant for House of Tokyo. “They continued to sell certificates.”
Accomando said they signed a contract and must fulfill the 90-day commitment, which is why they continued to sell the certificates, even after knowing House of Tokyo would turn customers away.“They shouldn't have signed the contract if they didn't fully understand,” said Accomando.
House of Tokyo is also being sent to collections for the certificates sold by Restaurant.com, even though they never got any money out of it.
Restraunt.com let Joell Lasley transfer her certificates to a different restaurant. However, it seems that deal fell through too.
“A few days later, they sent me an email saying ‘We regret to inform you that Southport Bar and Grill has canceled their contract and we'll let you choose another one yet again,’” said Lasley.
Accomando insists the company is not doing a bait and switch plan. * * *
Bogard said honoring all of the certificates would ruin them. It would be like giving away about $30,000 worth of free food.
“It’s destroyed our reputation,” said Bogard. “Some really loyal customers have purchased them and used them and now they're angry.”
A reader who watched the Fox 59 broadcast sent this:
These little restaurants do not know what they are getting themselves into -- they don't understand they aren't getting money (the idea is that they will get repeat business) and they don't insist on putting on limits. It almost drove a little New Orleans type restaurant here in Avon out of business last year for that very reason and I know a number of the other non-chain places have just refused them. They cannot handle the volume, especially when it costs them money!
Posted by Marcia Oddi on January 16, 2012 12:15 PM
Posted to Indiana Law