An online coupon company is once again selling discounted LCBO gift cards despite earlier complaints from people who paid for the cards but never received them.

Your City Deals started selling $100 LCBO gift cards at half price before Christmas. CBC News then reported most of the buyers did not receive the discounted cards. Now the site is promoting new deals for gift cards from LCBO, Petro Canada, Burger King and La Senza.

'There is no authorization required because we are reselling items we've purchased ... they could be gift cards, they could be helicopters, they could be fruit.'—MIchael Bailey, Your City Deals

Ontario's liquor control board is demanding the Ottawa company stops selling the cards and it has sent a cease-and-desist letter to Your City Deals.

The coupon company is not stopping, though. It now encourages customers to seek refunds from credit card companies and pay again using direct deposit from bank accounts.

Company defends new promotions

Your City Deals told CBC News it has sold almost 500 gift cards in its latest promotions. Its new president, and former vice-president, Michael Bailey, insisted the company was not doing anything wrong.

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Your City Deals' president Michael Bailey said his company has done nothing wrong because it purchased the gift cards. (CBC)

"There is no authorization required (from LCBO or any other companies) because we are reselling items we've purchased," said Bailey.

"They could be gift cards, they could be helicopters, they could be fruit."

Your City Deals is losing money on the cards, according to Bailey, and these promotions are purely to generate buzz about the site before releasing local daily deals as more people visit.

In the fall, the company also said third-party companies PayPal and Elevan refused to release the money to them and that is why the gift cards never reached the customers. 

Consumer alert expanded as site skirts Better Business Bureau

The Better Business Bureau has given the company an "F" rating because of customer complaints and it has issued an expanded consumer alert. It also told CBC News earlier this month it does not believe the company still exists.

LCBO statement on Your City Deals

The LCBO takes the credibility of our products very seriously … and want people to know that the resale of LCBO gift cards for unauthorized advertising, marketing, sweepstakes or other promotional purposes, is strictly prohibited. The LCBO has not authorized any other website to sell its gift cards, and will take the necessary steps to engage unauthorized third-parties directly, which may include taking legal action and/or involving law enforcement as required.

Our concern continues to be for the consumer. To this end, a second letter has been sent to the owner of yourcitydeals requesting this activity be stopped and we have also notified the Ministry of Consumer Services.

  • Heather MacGregor, LCBO spokeswoman

"We've tried different phone numbers, different addresses, we cannot seem to locate the business," said Diane Ladeluca, the bureau’s regional president, adding the company keeps moving, which should be a red flag for consumers.

"They had an initial address on Murray Street in the (Byward) Market, which the mail was returned from. Then they had another address which we tried again on Rochester (Street), which the mail was returned from again," she said.

The BBB also advises customers to only use credit cards if they want to buy anything online. The problem now, though, is Your City Deals has stopped accepting credit cards.

E-commerce professor, Dr. Umar Ruhi, called the site "buyer beware," adding direct deposit is too risky.

"There is no third party involved. You're directly interacting and transacting with a company and you have to resolve that dispute yourself," said the University of Ottawa professor.

Interac also warns an e-transfer of funds can't be reversed once the recipient has deposited the money.

 

With files from the CBC's Ashley Burke