This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and raising children at Childwild.com.
I have a pretty idyllic Friday evening planned: I’m going to yoga class, and then taking my husband out for dinner. These are both fairly spendy activities for me, but I got a great deal. I’ve already paid for both my yoga class and my date night with Groupons.
Groupon is the mother of all daily deal sites, with a rapidly growing number of competitors. The concept is simple: A product or service is offered at a discounted rate, but the deal only goes through if enough people buy it. The businesses make out — in theory — on volume, while the buyers score some great deals.
Sounds almost too good to be true, right? And it’s just that — almost too good to be true.
A Groupon Groupie
When Groupon works, it works great. That yoga class I mentioned? I got 50% off a month-long membership at the local studio right around the corner from my house. I was going to buy that membership anyway, and the Groupon happened to be fortuitously timed for two weeks before I wanted to use it. I snapped it up. My date-night Groupon is a similar deep discount for dinner at my husband’s favorite restaurant. We go there all for all our special dates, like anniversaries and birthdays. Buying a coupon for half off dinner there was a no-brainer.
I’ve bought a few other daily deal coupons:
- A discount at my favorite thrift store
- A coupon for a cocktail bar a friend and I have plans to check out
- A ten-visit pass at the local climbing gym
Again, these were activities I’d been wanting to do anyway. So far, I’ve been delighted with each of my Groupon purchases. They’ve saved me real money on things I was definitely going to buy anyway.
The “one day only” sales tactic works for me, too. There’s something about the time pressure of these deals that gets past my normal resistance to buying Stuff. I know I can slip into “shopping mode” and start overspending, and that awareness sometimes makes me too cautious. I don’t want to buy anything for fear of flipping the switch. A daily deal site is kind of great for a shopper like me: They offer a deal a day, and I take it or leave it. Even if I buy that one thing, I won’t be tempted by the item sitting on the shelf next to it. While a lot of these sites do have multiple deals running simultaneously, they don’t push you to browse for more the way, say, buying a book on Amazon pops up a whole string of tempting “recommendations”.
In my case, this has worked out well. I’d been wanting to join that yoga studio for months. I looked at their web site so many times I memorized the class schedule. I asked friends about their experiences there and heard only rave reviews. I walked past it at least a few times a week and stared in the windows. I made a New Year’s Resolution to take a class there. New Year’s stretched into March, and I still totally meant to do it.
But I never got past my own resistance to spending “unnecessary” money. Even when my doctor told me I needed more exercise and my therapist suggested taking up a meditative practice. Yoga is both. I’m so happy to be doing it now; I’ve been going to three classes a week and loving every minute of it. The Groupon was just the right nudge to get me over my shopper’s paralysis and in the door.
The Dark Side of Deals
I probably sound a bit like a Groupon groupie. As I said, it’s been great for me so far. I’m acutely aware that the deal is almost too good to be true, and that some people will be bitten by it. There’s an obvious dark side to daily deals. At heart, daily deal sites are just another avenue to entice you to buy more Stuff. Whether it’s real physical Stuff or meta-Stuff like classes and restaurant meals, it’s still Stuff you spend your money on.
When you’re offered a deep discount on something, it can seem appealing even if you don’t really want or need it. So far, I’ve managed to stick to a firm personal rule of never buying a daily deal for anything I wasn’t already planning to spend money on. I’m comfortable with those purchases: They’re things I want, and I could afford them at the discounted rates I paid.
Not everyone escapes the smoothly oiled marketing machine of the daily deals so well. Time has a great piece up on their It’s Your Money blog about “Groupon remorse“. Some people buy so many coupons they need spreadsheets to manage them. There’s a whole secondary market emerging in people reselling Groupons and other daily deal coupons that they bought and then realized they were never going to use. (If you want in on that action, you can check it out at Lifesta.)
To the extent that they encourage you to buy Stuff, the daily deals are just one more frugality buster. A half-price dinner out is still more expensive than a home-cooked meal. If buying Groupons becomes a habit for me, it’ll lead me to spend more than I want or need to, on Stuff I don’t really need.
Used wisely and sparingly, though, it can be a tool for some great deals on things you’d be spending your hard-earned cash on anyway.
Have you tried Groupon, or another daily deal site? Have you loved it or loathed it? What’s your strategy for making sure you only buy deals you’ll really value?
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Hubby and I have gone on several dates over the past 3-4 months thanks to Groupon, along with a couple more planned when it gets warm outside. I love it!
We also like to get the 3 Redbox Rental for $1! You cant beat $0.33/DVD from Redbox for a movie night at home (or a rainy day.)
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I am one of those people who has a spreadsheet of all the deals I have bought from Groupon and similar sites. (It helps me remember which deal I bought from which site and when it expires. Otherwise, I would forget about the, and they would all expire before I remembered them again!) I think daily deal sites are great for things I was going to buy anyway. One of the things I really like about these bsites is that they will often offer ways to “earn” credits, usually by referrals. I realize that you can only cash in on referrals so many times, but every little bit helps, right?
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PS – It’s even better when you get them through SwagBucks when you can get points for buying them and then, in turn, get FREE things. I am buying Mother’s Day Gifts from Amazon.com by using FREE SwagBucks by searching online and buying Groupons from SwagBuck’s daily deals!
http://www.swagbucks.com/refer/MegenCrispin
AND, we only spend on what we have in our entertainment budget. We generally have $100/month for our entertainment, which means I can buy one or two $10 or $15 groupons without going over and still have enough to have fun throughout the month.
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I used to get the daily e-mails from groupon, living social and campus crowd. Sometimes, I scored great deals, like 3 yoga classes for $6 (campus crowd). Other times, though, I think the groupon caused me to spend much more money than I intended on something I really didn’t need. So I unsubscribed from the daily e-mails and just take a glance at the sights from time to time. I still have two for restaurants that I have to use.
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LOVE Groupon and Plum District!!
I primarily purchase the food gift card deals: $5.-for $10.- gift card at Caribou Coffee, Papa Murphy’s, Divanni’s Pizza and so on. I shop/eat at these businesses so they are a great deal for me AND can be used for gifts too.
Also scooped up the Redbox deals… 3 movies for a buck?! Puhleez – that is a steal my friends.
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As a newbie to Portland, Groupon has been great for me. I discovered a couple of really good restaurants, a thrift (clothing) store and one for a massage studio that was probably the best deal I could find. I think for every 30+ Groupons that comes out, one resonates with me, so its not something that’s a regular purchase for me.
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I have not read all the responses. I am on a fixed income and I love groupon. Yes, I have a spreadsheet to track them, but I also have a spread sheet to track all my coupons as well. Just recently I got tickets to the Studio movie Grille for five bucks each for movie and snacks. In my area they seem to have a preponderance of spa type things, but I have gotten many for restaurants and other things…they are a great deal. I got fifty dollars at the gap for twenty five bucks and got three chrismas gifts for the price of one, because it could be used on clearance items.
As for the business side, I am a small business who did do a group buying offer on a local group buying site and was not at all unhappy.
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Like Ginger at #49, I only use Groupon for businesses that I have patronized before or were planning to try anyway, or for massage services. I love spa services, and its much cheaper to use groupon for these than pay “rack rate” prices for massages and facials. When I first joined Groupon, I bought a couple of deals because they were “deals” and not because I needed or wanted them independantly of Groupon offering them. Luckily I didn’t spend too much, and some of the things I got (like a custom frame job) I ended up really enjoying, but if you aren’t disciplined you will definitely end up spending money on things you dont need.
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Groupon seems like it might be a great way to save when you spend, helping frugal folks have a little fun along the way.
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I use massively Groupon and I have to say that it allowed me to save a lot, especially by reccomending Groupon to friends and becoming bonus for it!
Idea: in a month I’m going to spend a week holyday in a fabulous european city…I’ve bought 6 coupons for eating out during that period: man, I’m going to eat almost everyday in restaurants spending very little!!! And for activities as well!
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There are a lot of these sites in Canada now and I am signed up for daily emails on most of them. I’ve only bought one deal though, which was for a fish and chips shop. I have a fish and chips review blog and the deal was $10 worth of food for $5, so I bought 2. Other than that, most of the things on these sites are stuff I would never buy (like waxing, spa day, cleaning service), or restaurants I’m not too interested in. I’m unemployed right now so I don’t buy any of the deals regardless (the fish and chips deal I bought back in September).
I think they can be good, but as with regular coupons only use these sites for things you would buy anyway.
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OK so to look at this from the money-making side of things.
Is this a good place to advertise if your business is local? Because I want to “get rich slowly” not “spend money slowly”– and not to say spending control is not part of the equation, but making money is the most important side of the equation.
Let’s say I have a new CD of interest to a certain community (not necessarily a geographical one)
I could use the same mechanism: “if you buy the first 300 pre-release CDs today, you’ll get them at 1/2 price. our prices will go up after april 1st”. so everybody rushes to buy the pre-release (that is assuming it’s a desirable product–or that there is enough hype).
It’s a similar principle as Indie GoGo i think — get enough contributions and the money is yours. you build a critical mass of donations to get your “cause” started.
hmmm… i have a cause i would like to raise funds for, i think
anybody else with business ideas?
e.g.”the fund to contract with new tech elves”– contributors get a free J.D. Roth e-book.” doesn’t have to be a non-profit deal, does it? there is a similar site that funds creativity in general. i’ll have to look up my archive but they fund inventions, etc.– “micro venture capital”
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A first-hand account of the impact of a Groupon at a local restaurant.
http://www.oregonlive.com/business/index.ssf/2010/09/coupons_come_with_downside_con.html
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It’s strange to me that so many people in these comments object to Groupon because it is harmful to small businesses. Groupon is essentially advertising, and it’s up to the business owner to decide if it’s effective and worth the cost.
Personally, I love Groupon (found my local salon, my yoga studio and my spinning classes through deals). I think it’s probably pretty worthwhile for some businesses, because my spinning and yoga studios offer Groupons on a regular basis to attract new customers.
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I’ve signed on for the daily Groupons in my zip code. No purchase yet, but I see all the deals in my inbox & FB page. I have noticed that even after telling them my gender (male) that I am still seeing a lot of spa treatments come my way. Maybe I should be shopping for my wife?
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Come on people, tell me about how to make money with groupon instead of spending it!
Spending is for suckers!
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I get several of the groupon-type e-mails but so far have only purchased 2 deals. The first was the $10 for $20 at Amazon which was essentially free money for us since we purchase there often (at least monthly for things we have price-checked).
The second was $20 for $40 at a local butcher. I purchased it as a Christmas gift for my husband and he loved it. We will probably go back there at least once or twice a year, which is more than if we had never been there. We wound up spending a little more than the $40 that the groupon covered, as did the couple in front of us that was also using one. I asked the store manager how many groupons he had sold and he told me over 3000 and that they expected it to be very good for business and were eager to do it again.
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I signed up when it first came out in my area, but I found that there’s nothing I use, because I’m such a frugal frannie. I buy pet food, gas for my car, food for myself, and the odd book or piece of clothing (only at a thrift store, though).
Paying less than full price for something I wouldn’t want to do is not a savings, but an unplanned expense, so it’s not really for me.
If they had a 50% off gas or groceries, then I’d be there.
I unsubscribed after a few months — I am not in Groupon’s target demographic.
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I really dislike groupon for alot of the reasons people have said. Shady, useless, etc…
Its just a new form of scam. I also dislike subscribing to anything.
I much prefer coupons offered by the company itself, not by a third party.
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Interesting article. Its amazing where some people’s weaknesses are and others aren’t. DH loves these deal sites, often points me towards ones that he knows was something I was looking at. (UPS shipping at Christmas, lego items near a nephew’s birthday). I do peruse them, but only buy for things I’m already looking for/at. I love a good deal, but just am not tempted to “save” money on a deal I won’t use (that’s called spending money, not saving).
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The nearest town to us that has a groupon-clone is 40 min away. We don’t use it.
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Full disclosure: I am NOT affiliated with this blog in any way shape or form. Except for posting here of course, and I’ve emailed JD but for a totally different subject.
I just wanna see if the hive mind at GRS is capable of generating profitable ideas.
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Just as a follow up to all-rather than have your email box inundated, vist a deal type site that covers your area….mine is http://www.mydallasmommy.com (hope that’s allowed, JD. By visiting her sites, she lists all of the national and dallas group buying choices in one post each day. My email is empty and its much faster.
Some of the most frugal folks I know groupon, including the famous GRS contributor Donna freedman.
S
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I agree with Sierra’s take on Groupons. I vowed to never buy a Groupon unless it was for something I was already going to buy, and so far it has worked out well. I was planning to try a new garage that a friend highly recommended, so when I saw a Groupon for 50% off an oil change at that very same garage, I was psyched. I liked the place a lot and have since taken my car there for repairs totaling $500, so it has been a win-win situation. The only other Groupon I bought was for $50 worth of merchandise at Nordstrom Rack for $25. I have two teenage daughters, and Nordstrom Rack has been our first-stop clothing store for years, so again, a no-brainer because I knew it would get used for school clothes.
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So many people on here are talking about how it hurts small business. The owners know what they are getting into when they sign up. I have bought several mani and pedi deals because this is something I do often. I have purchased massages that I have always wanted to do but never wanted to pay full price. I very seldom buy restaurant deals because most of the ones offered here can be found on restaurant.com for $2 for $25 worth of food.
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We love Groupon! We’re currently using them to check out local wineries. We bought two Groupons to two different wine tastings this week – one was $35 for two tastings, two take-home bottles of wine, and two wine glasses (originally $70, and I also had an extra $10 off from referring someone); the other was $25 for two tastings + tapas plates (originally $50, and hubs had a $5 credit from something). That’s two dates for under $50.
We also snapped up the Living Social deal where you got two movie tickets for $9 – hubs bought first, shared the link on FB and three other people bought so his was free, and then I bought one as well…FOUR movie tickets for $9!! We did the same thing when LS offered the $20 amazon gift card for $10. We’ve also purchased discounted gift cards to Barnes & Noble, Bath and Body Works (used for birthday gifts for two family members), a local restaurant we already enjoyed, and to try out several online wine and food retailers.
I don’t find that I have trouble keeping track of them. I flag the confirmation e-mail in my inbox until I’ve used it, and Groupon is good about sending out reminders when you have unused deals. If it’s an online retailer I try to use it pretty quickly anyways.
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I find all my friends in the new mommy group are Zuilly junkies. I have purchased maybe 6 groupons in the last year one was an impulse buy although I had great plans for it just didn’t follow through now I still have the credit but no use for it. I love the canvas prints and yesterday through this blog I save the cuddle tones bear on gropoun which made me ecstatic I have had this web page saved on my favorites list for month and actually the plan was to purchase the bear for my daughters first birthday. Glad I waited, but now her grandparents who live far away can record stories and read to her.
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I find this article interesting. The heated discussion about fairness, service, small business etc.. It made me think, I have a pretty strong anti coupon stance for some things, yet I NEVER pay full price at bed bath and beyond. And then it hit me. I am willing to use a coupon for hard goods, but I am loathe to use them for any type of service. I DO NOT use coupons for restaurants etc.. Maybe I have hard time telling people to their face that I think the price they charge for their service isn’t fair and I’ll only patronize them for a deal. Maybe I feel that the price on hard goods is marked up to cover the coupons. That said if a place is running a special, like my yoga studio having a couple free classes a week for beginners, or my massage therapist running a half off special to increase traffic. I’ll take advantage in addition to my current patronization and often reccomend a friend. I don’t know – something just bothers me about using a coupon for a restaurant, or a spa. Maybe it’s because in a service establishment (restaurant, spa etc)you usually have to present the coupon before you order or recive your service, so they know you’re not paying full price before you recieve your service.
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Agreed that Groupon’s recent ads were in poor taste.
#44 & #38 Agreed. I looked at it for a photographer awhile back and it didn’t fit for other reasons. But the biz owner know what they are getting into (they set the discount and agree to the terms of getting 40%-50% generally of the groupon sold — which means they could end up making very little in the transaction). It is intended to stimulate trial and hopefully generate repeat business which in the end makes it worth the expense. Also, with restaurants, they hope to regain some of the profit margin with drinks and add ons. I talked to our waitress and she advised that tips had been mixed but she thought she was coming out ahead given all the traffic. It is a shame people are tempted to tip on less than the full amount. But I believe (hope) that part of the reason the owner does the groupon is to help fill seats that aren’t full generating tip income for their employees, so I’m sad to hear about Mel’s sister’s experience (#7).
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Stephen #63, I just read the article. That is horrible. I guess there will always be people who try to scham the system.
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@Bella,
I just don’t see how you don’t think service driven businesses do not up their prices also? They do it for the same reason that others do. If they were not, they would not be able to offer such a discount.
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My partner and I only recently joined Groupon/Daily Deals, but so far our experience has been positive. We mostly follow the “only if we’re looking for something in that category” philosphy, and we always check with each other before buying. As a result, it’s actually been more informative than anything else! We’ve already discovered one service we gladly would have joined even without the Groupon, if only we’d known it existed.
Before joining we also asked a local small restaurant owner what his experience with them was, and he was very enthusiastic. At that time he didn’t know how many of the new customers would become repeat customers, but it must have been enough since he recently ran another coupon through our local newspaper’s daily deal site.
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Yea. A good business owner wouldn’t do it if it weren’t good for them. I just seem to have this possibly unrational mental block.
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I bought my first groupon last fall for a discovery flight (quick flying lesson in a small single-engine plane). I have wanted to get my private pilot’s license for years, and love to fly, so this was perfect for me! I get three daily-deal emails (Groupon, LivingSocial, and BuyWithMe). I’ve gotten wonderful deals on hot air balloon rides, skydiving, museums I’ve wanted to visit, belly dancing lessons, white-water rafting, dinner theater, a couple of restaurants I already loved, movie rentals, cupcakes, and a massage and facial. I haven’t let anything expire unused yet. I love the Groupon and LivingSocial apps on my Droid. I don’t even have to waste paper to use them.
It seems like every time I put something on my list of things to do, I just have to be patient and eventually a deal will show up! Now I’m just waiting for a deal on tandem hang gliding.
My weekends are pretty much all planned out for the next 3 months between races, deals, and weekend trips out of town.
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I was pretty late to the Groupon thing when all the coupon blogs were touting it, but I finally bought a $10/$20 deal with soap.com, which included free shipping. After that, I passed on anything else until the $1/3 movie rentals for Redbox deal.
The last one was actually a nearby wine store offering free shipping of 6 premium wines (even in our liquor-controlled commonwealth) for $45 and since I had $9 in Groupon credit, the whole deal was $36 or $6/bottle, delivered to my door. I nabbed it and was all excited to use it for a gift for my husband. Then the bomb dropped in my marriage and divorce became reality, and I emailed Groupon asking about a refund. At first they said they don’t do that once the deal’s over except for really extenuating circumtances. I told them mine but said I understand that it probably doesn’t qualify, and they immediately refunded my $36 and told me to spend it on myself and hoped I’d feel better. I was just so impressed to find out their customer service dept apparently has real people in it that I think I’m more of a Groupon fan now than ever.
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I find that these deals can be a great way to try out new things and activities. My current job doesn’t allow much for much free time or flexibility but my situation will be changing drastically in July and I plan to take advantage of far more of these deals — especially as a way of trying out new fitness classes and the like.
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