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Wicker Park Chefs Say Restaurant.com a Bad Deal For Businesses

By Alisa Hauser | June 26, 2014 5:18am
 Runa Japanese Restaurant at 2257 W. North Ave. in Wicker Park, Usagi Ya sushi at 1178 N. Milwaukee Ave, John's Pizzeria at 2104 N. Western and Unite Urban Grill at 1450 W. Chicago Ave. in West Town have all discontinued using Restaurant.com, citing unfair business practices.
Restaurant.com Business Practices Upset Some Wicker Park, West Town Restaurant Owners
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WICKER PARK — An online dining deals site has angered a Wicker Park sushi chef, adding another voice to a chorus of area business owners who say they're not happy with Restaurant.com.

Henry Zhang, owner of Runa Japanese Restaurant at 2257 W North Ave., said customers started showing up with unauthorized $25 gift certificates last week.

"I was shocked," Zhang said.

Zhang said he received a phone call from Restaurant.com last week offering to put Runa's menu on the site free of charge — but he did not agree to offer a coupon or deal.

"If you have bought any gift certificate from restaurant.com, please ask Restaurant.com for a full refund, because Runa has never made agreements with them," Zhang posted to his eatery's Facebook Page Saturday.

 Restaurant.com's Facebook page has several posts from angry restaurant owners who did not give permission for deals to be offered or customers who tried to use the deals they bought.
Restaurant.com's Facebook page has several posts from angry restaurant owners who did not give permission for deals to be offered or customers who tried to use the deals they bought.
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A customer told Zhang he paid Restaurant.com $10 for the $25 gift certificate, which has no expiration date.

Zhang honored the certificate but took to social media to tell others he is not accepting the coupons. Runa's menu and offer were removed from Restaurant.com Monday, but more certificates had already been sold.

Tania German, a spokeswoman for Restaurant.com, said Runa's deal being offered without consent was "a misunderstanding" and "fewer than 10 gift certificates" were sold during the four days Runa's deal was live on Restaurant.com.

On Monday, Humboldt Park resident Tom Tyler called Runa to see if they would accept the certificate he bought on Restaurant.com Saturday.

"I always give restaurant owners a heads up on the coupon. This has happened before — there was a sushi place on Milwaukee Avenue just east of Ashland. That owner got mad too, did not honor it. I have always wondered why any businessman would want to do it, it does not seem like a good deal for them," Tyler said.

Francis Yao, owner of Usagi Ya at 1178 N. Milwaukee Ave. in Noble Square said he honored Restaurant.com certificates for three months, but discontinued his partnership with the website in December.

Yao said he stopped accepting certificates from Restaurant.com after he stopped receiving an agreed upon share of 50 percent profit on the deals.

Yao said he cut his losses — which he estimated to be around $500 — and moved on.

German said the website only stopped paying him because he stopped taking the certificates.

Unlike competing deal sites like Travelzoo and Groupon, which share proceeds of online gift certificate sales with restaurant owners, Restaurant.com keeps all profits from its online certificate sales.

German said they discontinued their profit sharing policy on May 31.

"On average, Restaurant.com diners spend $66 per table when using a $25 certificate, which more than covers the cost of the food," German said. She said the the site offers good exposure for restaurants, as Restaurant.com receives four million visits each month.

But Joe Krouse, owner of Unite Urban Grill at 1450 W. Chicago Ave in Noble Square, said his partnership with the site ended in him "losing a lot of money very quickly."

"About an hour after I agreed to join them my deal was up on their site, with no permission on photos or the text and the next day people started coming in," Krouse said. 

Krouse reached out to his Restaurant.com sales rep "to find out how everything would work" in terms of payment as the dining checks kept adding up, but said he got the runaround.

"They said they only meet face to face with active partners, and my deal would have to stay on their website for me to be an active partner," Krouse said.

Krouse asked Restaurant.com to immediately remove the deal.

But German said "all information was presented" to Krouse before the deal went live.

"This was not a case of misrepresentation by Restaurant.com," she said.

Tyler said he uses Restaurant.com certificates about four times a week and "about once every eight times" the restaurant does not honor the certificate. He also said the pool of restaurants to choose from has dwindled since he began using the site five years ago.

Currently, there are 311 restaurants within a 15-mile radius of Chicago listed in Restaurant.com's directory.

Based in Arlington Heights, Restaurant.com employs 65 full-time sales representatives who are "making thousands of calls," German said.

If certificates are rejected, customers will receive a credit to use at another restaurant, German said.

German said "misunderstandings or miscommunication between owners and/or corporate have occurred in .7  percent" of Restaurant.com.'s "active" partnerships in the first five months of 2014. Those include restaurants who were signed up without permission.

"It's possible [Zhang] did not fully understand the program, he would have received a communications stream explaining that their site is going to go live," German said.

The Better Business Bureau has recorded 370 complaints against Restaurant.com in the past three years, with the majority related to product or service and advertising/sales complaints.

In a statement on its website, the agency says the BBB of Chicago & Northern Illinois found "a pattern of consumer allegations." Among other issues, restaurant owners have "alleged that the company's sales staff has misrepresented the frequency of discounts offered by Restaurant.com and that the company has sold coupons for higher amounts than they had agreed upon with the company's sales staff."

In addition, a March review of complaints found "allegations claiming that the company had signed up restaurants for their services without formal consent or prior knowledge from the restaurant owners, leaving them responsible for a program they never willfully elected to take part in," the site says.

In response, the site says, "Restaurant.com has updated their program to give restaurant owners more control over the minimum value spent for each coupon. They are also allowing restaurant owners to terminate their agreement with the company effective immediately if they no longer wish to participate."

However, the website said "the BBB has received no plan of action detailing any progressive steps by the company to resolve the allegations from restaurant owners that they were signed up for the company's services without their knowledge or consent."

German said Wednesday that in early June her company had submitted a "Plan of Action" in response to the restaurants' complaints about being signed up unknowingly.

Zhang said he is considering hiring a lawyer even though the offer has been removed from the site.

"I feel horrible for the people that bought [the] certificate," he said. "As a business owner I feel very angry because I never agreed and that they could just post it on their website is wrong."

Krouse described his brief experience with Restaurant.com as "a good lesson."

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