I got a 3 hour french cooking lesson for my Wife and I. Pretty good deal. The day before the lesson we got a message it was canceled. Since the money-back guarantee expires in 7 days, the guarantee expired before the thing was canceled. So we are out.
If their stock price is anything to go by, this must be a fairly common experience.
I've used Groupon a couple of times and had good experiences. Sorry yours turned out so badly.
It seems like if the lesson was cancelled that would be the fault of the school (or whoever was providing the lesson) rather than Groupon and it should be up to them to fix it. But I agree the money-back guarantee should never expire before the event even takes place.