SecProbe.io

August 2, 2012

Via E -mail
Mr. Jason Child
Chief Financial  Officer
Groupon, Inc.
600 West Chicago Avenue
Suite 620
Chicago, Illinois  60654

Re: Groupon, Inc.
Form 10 -K for the Fis cal Year Ended December 31, 2011
Filed  March 30, 2012
 File No. 1-35335

Dear Mr.  Child:

We have reviewed your filing and have the following comments.  Please comply with the
following comments in future filings.  Confirm in writing that you will do so and explain to us
how you intend to comply.   In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.

Please respond to this letter within ten business days by providing the requested
information or b y advising us when you will provide the requested response.   If you do not
believe our comments apply to your facts and circumstances, please tell us why in your response.

After reviewing the information you provide in response to these comments, we may
have additional comments.
Revenue, page 45
North America, page 45
International, page 46
Loss from Operations, page 49
1. Please expand your disclosures to discuss how certain channels which were launched in
2011, including but not limited to Groupon Getaw ays, Groupon Live, and Groupon
Goods, contributed to your revenue growth and impacted your deal margins, loss from
operations and revenue reserves, if at all, and your expectations on their future impact.

Mr. Jason Child
Groupon, Inc.
August 2 , 2012
Page 2

 Non-GAAP Financial Measures, page 50
2. Please includ e a prominent presentation of the amounts for the three major categories of
the statement of cash flows when presenting free cash flow, a non -GAAP liquidity
measure.   In this regard, refer to the guidance in Question 102.06 of the Compliance and
Disclosure  Interpretation on Non -GAAP Financial Measures dated July 8, 2011.

Cash Provided by Operating Activities, page 53

3. We note that you attributed your increase in cash to changes in working capital activities
(in part), resulting primarily from a $380.1 mil lion increase in merchant payables due to
continued growth in the daily deals business.   Please further address the extent to which
the increase in merchant payables is attributable to a change in the mix of the daily deals
business, in which merchants are  obtaining a larger percentage of the proceeds from
Groupons sold or where merchants have been subject to longer payment terms.
Critical Accounting Policies and Estimates, page 56
Refunds, page 56
4. We note that during the third quarter you launched several  new channels, including travel
(Groupon Getaways), live concerts and events (Groupon Live), and consumer products
(Groupon Goods).  Tell us whether you established a higher refund reserve during the
fourth quarter to cover refunds primarily for these newe r deals or your standard featured
daily deals .  In addition, provide us with the following information:
 Quantify the shift in your deal mix during the fourth quarter and the percentage
increase of higher price point offers through your new merchant chan nels between the
third quarter and the fourth quarter that required you to establish a higher refund
reserve at year -end.
 State whether the higher than anticipated coupon returns were predominantly in the
US or in your international operations.
 Explain  in detail how your original estimate disclosed on February 8, 2012 of the
reserve for customer refunds proved to be inadequate after you performed additional
analysis.  Specifically tell us what additional analysis was performed and when the
problem was i dentified.   Explain how it only impacted the fourth quarter of 2011 and
did not impact the financial statements for the nine months ended September 30,
2011.
5. Please revise your disclosures to include a more detailed description of the input
parameters for your modeled refund behavior, including but not limited to the deal mix
and price point of deals.   Additionally,  tell us:

Mr. Jason Child
Groupon, Inc.
August 2 , 2012
Page 3

  How you considered the relatively long or indefinite period of time in which a
Groupon may be refunded pursuant to your Groupon P romise, your lack of historical
experience with higher price point offers and/ or with new markets, and the absence
of a large volume of relatively homogenous transactions.
 The maximum amount of future refunds for which you may be liable as of each
balance sheet date.
6. In a note to your financial statements, discuss in detail your rebate/refund policy for deals
featured in late 2011, including for those higher price point offers and how you
concluded that you could reliably estimate those refunds for this  new deal mix .
Consolidated Variable Interest in LLC, page 80

7. Please provide variable interest entity disclosures required under ASC 810 -10-50-2
through 50 -15 or tell us why such disclosures are not required.   In addition, t ell us how
you addressed your a rrangement with the LLC in your previous registration statement s
and when you determined that you were the primary beneficiary.   In this regard, we note
your prior disclosure that you adopted the provisions of the guidance on variable interest
entities pro spectively beginning in 2010, and its application had no impact on your
consolidated financial statements.
Item 9A. Controls and Procedures, page 104
8. We note in your disclosure that you concluded there was a “material weakness in the
design and operating e ffectiveness of (y)our internal control over financial reporting as
defined in SEC Regulation S -X.”  You further describe the material weakness as one that
“relates to our financial statement close process.”   Please explain in more detail each of
the three  “primary factors” that contributed to this material weakness, the specific
accounts impacted by these “factors,” and how you determined that these three “factors”
indicated that there was only one material weakness and it was limited to the financial
close process.   Additionally, please describe the considerations made in determining to
aggregate control deficiencies.

Please file all correspondence over EDGAR.  We urge all persons who are responsible
for the accuracy and adequacy of the disclosure in th e filing to be certain that the filing includes
the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules
require.   Since the company and its management are in possession of all facts relating to a
company’s disclosure, they  are responsible for the accuracy and adequacy of the disclosures they
have made.

            In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

Mr. Jason Child
Groupon, Inc.
August 2 , 2012
Page 4

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Kathryn Jacobson, S enior  Accountant, at (202) 551 -3365 or Robert S.
Littlepage, Accountant Branch Chief , at (202) 551 -3361  if you have questions regarding
comments on the financial statements and related matters.  Please contact Ajay Koduri,
Attorney -Advisor,  at (202) 551-3310 , or me at (202) 551 -3810  with any  other  questions.

        Sincerely,

        /s/ Robert S. Littlepage  for

        Larry Spirgel
        Assistant Director