Becoming a Groupon Groupie
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 website 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?
Become A Money Boss And Join 15,000 Others
Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)
There are 86 comments to "Becoming a Groupon Groupie".
My fiancee and I use coupon sites to check out new eateries in our area. We live in a touristy area of Florida, and since the economy has been so wonky on the gulf coast lately, there are constantly new restaurants and bars opening up (and old or not-so-old ones closing down) near us. The new places almost invariably offer a Groupon or Crowd Savings to get people in the door. We’re self-confessed foodies, so we want to try all the new places, anyway — the coupons make it possible for us to do so when we otherwise probably couldn’t afford to. (I’m a grad student and she’s a school counselor)
That being said, I make a point of not checking the coupon sites on my own. I think I might end up being one of those people who falls for the discounts too easily: “Ooh, 50% off underwater basketweaving… why not?!” So I let my fiancee check the sites, and we only get the coupons if we both agree we want to try it.
I love Groupons for date nights. Having a 50% off coupon for dinner out helps offset the price of a babysitter for our 3 kids. However, we did go to one of our favs with a Groupon recently and ended up amassing a bigger bill than anticipated with $9 drinks we somehow justified because the food was so inexpensive. (Alcohol sometimes is not covered by Groupons, check the fine print.) I would have been more upset about it but it was a celebratory dinner, so I chalked it up as a learning experience — and additional revenue for a fav. restaurant.
Still, I really like Groupons. I think it is a great win-win for the businesses and the consumers (if people buy what they will use, like Sierra). I have let one Groupon expire, it was for something I wanted to try (home delivery of organic food), but in the end I didn’t find the pre-selected fruit and/or veggie bundles appealing the last week I went to order — and I procrastinated too long. In hind sight, that was part of the reason I had not ever ordered before. But I have used all the others purchased which I was more selective in choosing and have achieved some great value for entertainment and gift items.
I’d be curious to know if any business owners have used Groupon and how their experience went on that side of the coin. I have looked into it for marketing clients and seems great (if you can afford to take a loss on your product to gain trial and hopefully future biz). Wonder if any biz ownders have had a bad experience with Groupon.
Like Lucas(#1) I also mainly go in for restaurant deals, which I run by my BF before buying. I find just waiting a few minutes(and checking the business out on Yelp) is enough to keep me from getting something I regret.
I go to an internet site that houses all the internet coupon deals for my particular city on a single page. I check it every day – it takes thirty seconds to scan about thirty deals. I really only take advantage of restaurant deals located near my work. I go out for lunch every day, and so the coupons are great for that. Almost everything else I ignore.
I do have to mentally check myself because some of the deals are really outstanding. But I just ask myself, “do you really need a dozen roses, even if they are 75% off?” The answer is invariably, no.
I hate to say it, but I find these services pretty useless because they either don’t service my area yet or their offerings are very limited. (They’re still growing in Canada, what can I say?)
What concerns me is what these deals are doing to small businesses. Most people don’t understand the costs that the business pays to have a deal through sites like Groupon, not to mention the loss they’re taking on the deals themselves. There is some research already that suggests that businesses aren’t seeing return customers or people spending much more than the deal is worth. (I wish I could find the references, my apologies!)
For now, I let all those daily emails go to my “junk” email account just in case there is something interesting. After five months of following five different sites, I’ve only found one useful coupon.
I check the sites daily, but I’ve only ever bought 1 Groupon. I live about an hour away from 2 major cities so what works for me is deciding if it’s worth driving all that way and dealing with parking and whatnot. So far, not too many of the deals are worth it for me. But I still like to look just in case.
And actually these Groupons can be devastating, especially for small businesses who lose money on these deals and often can’t deal with the rush that the deal will bring in.
I have a sibling who works for a business who runs Groupon deals on occasion. She said a lot of the people who have used the Groupons have been the nastiest, rudest people. She works at a salon and the people who use the Groupons often do not tip or will complain about the service to try to get the service they purchased at a deep discount for free. The owner of the salon gives the employees no warning of when she is running Groupon promotions. My sister is already struggling in this economy and the commission she makes from a service with Groupon nets her about $6 for an hour of her time. Some of her established clients bought multiple Groupons which I believe is excluded. However, after some of the nasty phone calls from people demanding substitutions I don’t think the owner will put up a fight against that and risk losing clients. I have used Groupon for events,so don’t get me wrong I think it’s a great service. People don’t seem to get that salons are just like restaurants: tip based on pre discount prices. Please realize there could be a commission person making below minimum wage trying to gain you as a new client.
Sierra,
I love using Groupon and related sites. Because of these, for instance, I am going skydiving in less than a month, but also have used them for a SCUBA class, going wine tasting, watching a medieval comedy show, gone on a pirate cruise, and so much more. They really are fantastic, and great to discover the city or area you live in.
When I first discovered it, I bought most deals that come out. Today, I buy way less since I know that they come with expiration dates, and I don’t want to buy something I won’t use. Also, buying with friends makes it hard to use often since you then need to coordinate everyone’s schedules. So, buying with just one friend or your girlfriend/wife makes it much easier to plan.
My wife bought something from Groupon for the first time this past weekend. At first, I questioned the purchase, since it wasn’t something we needed, but in the end it ended being a nice night out (it was 4 movie tickets) at a great price. I think as long as we can keep it sparse, this will be something to take advantage of.
We do a lot of Groupons for date nights, and I recently tried out a yoga studio with one. I find that I try a lot of places I didn’t even know existed.
#7 Mel – Some of the ones I’ve had say tips should be based on the regular price, and I can’t even believe they have to say that. Until I started getting discounts through one of my employers, I didn’t even realize people would consider tipping on the discounted price. Sad. I’m sorry for your sister. Some people are obnoxious.
I’ve registered with this and Living Social with my coupon-junk-email address, and so far all I see is yuppie products and services aimed at derailing my budget with the help of deadlines that promote impulse buying. Which is the antithesis of good money management and living frugally. I’m at the point where I don’t give a damn about publicity, and can laugh at the nonsense, but it just adds to the clutter of my inbox, and who wants clutter?
I profit much more by registering for coupons with stores and brands I patronize on a regular basis, and wait until they offer the stuff I normally buy anyway, then stock up. Discipline is setting us free.
Then of course if you are at a phase where your finances are progressing full steam ahead and you have some “burn” money to throw at things, then hey, enjoy, but impulse buying is still impulse buying.
I haven’t joined the Groupon circle yet but only because the right deal hasn’t come along. I appreciated this post since I wasn’t 100% sure how Groupon worked. If I see a Groupon for the kick boxing studio at the entrance of my neighborhood, I’m there!
The Economist has an article this week about Groupon Anxiety:
http://www.economist.com/node/18388904
Maybe it’s just the region where I live, but Groupon rarely has deals that interest me. I’m not going to go drive 40 minutes away to try a pizza place just because I got a discount on the meal, and in our area, I know all the restaurants well enough that I only buy deals for places I actually go to. I think the places around here understand how to use these services, bc the deals they offer are still generally fair to the businesses. For example, you might get $50 worth of food for $25, but the average bill at that particular restaurant for a family of four would run $125-$150, so the actual discount is around 20% or so. The cheaper places tend to run a deal where you get $16 for $8, so they might be discounting a little more, but they still are only discounting maybe 30% on a typical meal.
Now that my husband and I already have three or more Groupons for restaurants, I’ve decided that we shouldn’t buy more until we’ve used these. With the preponderance of daily deal sites (Living Social etc.) I’m sure there will be a lot of frugal people who get suckered in to spending more money. Like Sierra said, a half off meal is still more expensive than eating at home. But it’s oftentimes hard to really gauge whether or not this would be a meal you would go to anyway.
Last month I received an offer in the mail to a really nice restaurant near my house. They basically invited their loyal customers to come that month and pay whatever they wished for the meal. The letter complained about the current Groupon phenomenon and how it devalues restaurants. It claimed that Groupon takes around 50% of the money you pay for the coupon. This means that the restaurant will oftentimes lose money on the deal, especially if you don’t buy a high profit item like a beer or soda. I guess the hope is that you will come back. While I found the letter from the restaurant urging me not to partake in Groupon to be in poor taste, it did make me think about the whole movement.
@Mel
I’ve noticed sometimes when we use entertainment book coupons that the waiter will often change their attitude in a negative direction the minute the coupon is presented. I attribute this to the fact that a lot of cheap people use coupons, and oftentimes these cheap people tip on the discounted amount rather than the actual amount. I find this very rude on the part of the customer. I’m surprised more restaurants don’t have an automatic 20% tip on the pre-coupon amount, but I guess the owner doesn’t care that much about tips.
And this isn’t directly related to Sierra’s post, but I wish “Stuff” could go back to its former uncapitalized state.
I’ve gotten Groupons for RedBox and Blockbuster Express to save even more on cheap movie rentals. Around Christmas, I got a $100 credit for $35 to a website that makes photobooks and got gifts for family. I recently got a Groupon for 6 months of Sunday-only delivery of my local paper so I don’t have to go to the store to get coupons. Yesterday, I had my oil changed at the local dealership with my $15 Groupon.
It’s tempting to fall for the “buy it before it’s gone” line, but I’m trying hard to only get things I would otherwise buy anyway.
I love Groupon! I am very lucky to live close to NYC where this type of deal works best. I also use ones for my home state and have yet to be disappointed.
I learned to scuba dive (something I always wanted to try but couldn’t justify the cost), seen amazing museum exhibits, gone on a walking tour of Little Italy, and taken ballroom dance lessons. I found that there was so much to do even in my own neighborhood that I could actually afford if I use a Groupon.
I think the success of this type of program is living in the right area. I subscribe to several cities and also to whatever area I am headed to for travel. I saved so much on a recent vacation by taking tours through Groupon offers. I just hope that the small businesses are gaining new customers out of the deal. I personally have given repeat business to 5 or more places that I’ve used a Groupon and I hope others do to.
The one problem with Groupon and other deals is that the underlying mentality in even looking at them isn’t “What will I save money on” but rather, “What will I spend money on”. Just surfing these sites shifts me into a spending mentality. As Sierra points out, this can only be good if it’s for something I was planning to buy anyway (after looking at Consumer Reports, Google and/or yelp.com); usually that means I have a particular vendor already in mind. So I’ll either go to their website directly to see what deals/sales they’re offering, or I’ll patronize a small local business instead.
Groupon is similar to using coupons and taking advantage of deals in a store, it is a tool only. If you cannot resist spending money, you cannot blame the tool for your issue. If Oreos are half off, it doesn’t save you money if you weren’t already planning on buying them. If you’re new in town and want to explore your new city, Groupons can be a great way for you to do that. Can’t afford that pricey French restaurant that everyone raves about? A Groupon that costs $20 for $50 of food lets you sample their appetizers and desserts. Deals and coupons are not magic, they do not make everything better, they are just a tool you can use to assist in your money management.
Also, I find it interesting that people want to blame Groupon for a business not benefiting from using them. Businesses aren’t forced to work with Groupon and if they are good business owners, they will do their research and decide if the pros outweigh the cons. In the instance of the stylist, I think if the salon owner wants to use Groupon, they should reimburse the stylist or get their permission to make them one of the stylists available. That is what happened at a salon I went to, you could only go to a handful of the stylists who had agreed to participate.
My experience mirrors Nancy L’s comment when it comes to the size of the deals. A lot of Groupons I see now offer a deal for the fraction of the typical total cost at the store. So a golf store offers %50 on $40 worth of purchases knowing full well that if you buy anything there it will typically cost you over $100. So far I have not been that impressed by Groupon and have only bought once in over three months. I’m thinking of stopping their regular emails to my Inbox too.
I am not a part of Groupon but happen to love Living Social for three reasons:
1. I live in Northern Delaware, which Groupon really considers to be a suburb of Philadelphia. It is a 40 minute drive to philly to an area I probably don’t know very well. Good chance I’ll never buy anything on there. LivingSocial offers a “site” for Wilmington DE and looking at their list, some other smaller metropolitan areas.
2. Groupon is so secretive in comparison to LivingSocial. You can go to LS’s website and see the day’s current deal in any city without giving away your email address.
3. I don’t think Groupon does this, but if you get three friends to buy in to a deal with you on LivingSocial, you get yours for free. LS did a $10 for $20 Amazon credit; I bought it and referred my wife, and two other people bought it through my link, so we got $40 to amazon for $10. They even have travel deals, that are available longer than a day, with the same rules (though I’d imagine its a lot harder to get 3 people to put down a couple hundred to some location you want to go to).
I agree with #18 Laura. Groupon is just another way to separate me from my money… 🙂
It’s much easier to really save money by spending on what I really want. I’m not very good at giving into temptation so I just don’t join Groupon.
I went to a local crepe/rice pudding place and they were inundated with Groupon people the day after the coupon expired. Man, the owner gal was starting to get mad, but what can she do? She wants to gain new customers.
Yes, the daily emails from sites like LivingSocial, Groupon and Eversave may be crowding up your inbox. And yes, for some people, it may just be a waste of time.
I suppose if you are going to use it, you have to have a system….For me, I only purchase things that I know we’ll use in the future. Recently, I got two movie tickets for $9.00. I don’t even spend $9.00 on ONE movie ticket…Oh, and it expires at the end of the year? Great. I have time to use it… (Now to find a groupon that gets you a great babysitter for cheap…)
It was worth it to me. I was able to make some room in the grocery budget to take out nine dollars…
But that’s just me. If I ever fit into the trap of buying every single one that hits my inbox… Then I’ll quit cold turkey.
Until then, I am going to reap the benefits when it’s the best for me and my family because that’s what works for me. 🙂
@ Ana and Mel — Agreed! The one coupon I did buy was for a major retail book chain. After I learned more about how these sites affect small businesses, I passed on a coupon for the local dry cleaners because I felt wrong entering into that dealing knowing I’d be hurting the business. I’d rather except a lesser deal (they have regular specials) and establish a good relationship with the business instead.
It’s really made me think about how I view large retailers versus independent ones.
I too am very selective with what I buy through Groupon or similar sites. Several have popped up in the Detroit area. I have only purchased two. One for a coffee shop I was planning on trying anyways and one for a local gymnastics place my dd has been wanting to go for a while.
Never used or have seen a groupon, but I will check out the site today and see what I can find.
Hope it is not like ‘snipe’ hunting.
While I’m sure that there are folks who don’t tip very well when using coupons, there are folks who don’t tip well when not using coupons. As some have said the waiter or server may change their atitude or service for the worse once they know you’re using a coupon. In which case I say they deserve a miniscule tip if any at all. This also may contribute notion itself, rather its possible coupon users are bad tippers because they get bad service.
I’ve loved these (groupon & living social) and we’ve used them for the experience options rather than any stuff or services. Have been rock climbing, on a bus /walking tour of Seattle, museum, movies and a boot camp. Have wanted to do all of these things and getting to do them at 50% or more off has enabled us to try some things that just weren’t in our budget otherwise.
I cringed when I read this subject line.
Groupon pretty much ensured they would never get my business after their Superbowl commercial ads, which were an exercise in poor judgment. Here’s the one about Tibet: http://www.youtube.com/watch?v=vVkFT2yjk0A
I’m not speaking for anyone but myself, but that was definitely a dealbreaker for me.
With services like these, it just seems like “deal fishing” to me, looking to spend money on a “deal” when you could just otherwise abstain and save the money instead of spending it on something you weren’t planning on purchasing. If you were going to spend the money anyway, then great, so long as you’re practicing conscious spending.
But there’s no hard guarantee you’re going to get the deal anyway.
Geez, all the ripping on Groupon. No, its not perfect. It’s not for all areas (just cities mainly) and it’s not for all demographics. lighten up…
I use it mainly for clothing stores, workout classes and some beauty places. My boyfriend jumps on the restaurant deals and car washes.
Coupon books are on the out, and so for my generation I think it is great. I subscribe to LivingSocial and MyDailyDeals but have only used those once each.
All the businesses I have gone to have treated me very well and I have tipped according. Only a few I have gone back to as a returning customer (my mechanic!). I have only ever had to return one coupon because the manager I tried to make dinner reservations was horrible and I couldn’t stand the idea of giving them my business even though I had already purchased the deal.
Last November/December, I spent over $250 on Groupons (there were a lot of great holiday deals on things I had been holding out for months). I have not bought one since then and have just slowly used the ones I purchased.
Groupon is only a spending-danger to people who already have trouble online shopping. It is very easy to purchase something (especially with the one-touch iPhone app). Self control works fine for me.
I live in Vancouver, Canada and have been using Groupon. I got a month’s unlimited yoga sessions for a great deal at a studio I wanted to go to, but could never justify spending their full fee. I got my annual membership to the Vancouver Art Gallery for half price. I was going to renew anyway. So if you stick to the things you were going to do or really wanted to try and get be sucked into buying things you don’t need, I think it works out. If you let groupons expire without using them, obviously it wipes out any savings. I have a limited entertainment budget for the fun things like dinners out and artsy things, so this let’s me enjoy some of those activities without breaking my budget.
I have used Groupon (as well as DailyDeals) quite a bit, nad have a very high level of satisfaction with their service.
One time, a groupon was purchased and the establishment that the groupon was for went out of business soon afterwards – Groupon quickly refunded our purchase without any hassle whatsoever.
I’ve signed up but have yet to use because everything is a want, not a need and my wife’s favorite restaurant or another I’d like to try have yet to show up. It’s difficult to feel too sorry for businesses that this is hurting, though. They can say no to the terms of Groupon, too, and more are negotiating better deals for themselves. There’s a story about that in today’s WSJ, by the way,
This weekend, both my spouse and I will be seeing OUR eye doctor for our yearly eye exams. Both of us have bad eyes and require new contacts and glasses each year. We self insure our eyes using our flex account. These yearly visits can cost our flex account close to $750. This year, we each bought a discount through livingsocial.com. For $65 each, we will each receive $250 towards our exam and glasses. Using Groupon and Living Social to purchase a service I would have already use is well worth it, in my opinion.
I agree with some others that groupon is only likely to cause you problems with your spending, if you already have problems with your spending…
I’ve found it great for the city I live in, my partner and I got half price memberships for the gym we wanted to join, and for the gardens we like to visit. I’m taking him to his favourite restaurant for his birthday with a groupon this weekend.
I’ve also just bought my mum her mother’s day gift (it’s in April in the UK) with a groupon and I’m ordering a photobook for my friend’s birthday with another.
I am not a fan of Groupon in general. I have purchased 2 deals from the site in the past (one for me and one for a friend) but I now feel that the negatives outweigh the positives.
As someone above mentioned, Groupon advertises for all different types of businesses, so you are often sent deals for items or services which you don’t normally purchase. They are encouraging you to part with your hard-earned money everyday!
From the small business perspective, Groupon is not that great of an advertising strategy. It seems that Groupon has created a group of loyal followers (Grouponers) who will only spend money on a good or service if they have a Groupon. Sure, the business gets exposure for a day, but most of the people that purchase the Groupon, do not end up coming back or spending more on the Groupon deal at the time of the service. Furthermore, Groupon pressures businesses to offer a deal of at least 50% off of the normal price and then they take HALF of the revenue that the business pulls in from the deal. So the business walks away with 25% of their normal revenue.
I think people forget that the main purpose of a business is to maximize profits. Groupon is no different. They encourage both businesses and consumers to part with their money so that they can make a hefty profit. The only real winner in this situation is Groupon.
To date, I have purchased two Groupons: one for amazon.com ($10 for a $20 credit) and one for a local coffee shop ($5 for $10 gift card). I haven’t used the amazon one yet, but we are always buying gifts and other items there, so I felt the “insta-50%-off” was a great deal for us. I would caution other buyers to read the fine print carefully, though. I got the coffee card for a place I often meet my girlfriends at and thought this would be a good way to pay for two of the gatherings. I didn’t realize until I got there that the entire amount had to be spent at once. I bought another girl’s drink, but it was still frustrating.
#2, Sonja– Depending on which state you live in, legally, you may be able to get back the money your originally paid (not the face value of the coupon,) if you didn’t use the coupon before it expires. Read the fine print on the Groupon site. I’m not sure how hard it would be to actually do this, but I know it’s the law in the state where I live.
Also, I work for a business that ran a Groupon and it was looked at as a marketing expense. Just like any advertising, running a Groupon costs a lot of money. However, if you aquire a small percentage of those people as new customers, your per-customer aquistion cost may be comparable or lower than traditional advertising. That said, just like some small businesses don’t have the budget to run a big TV ad, some small businesses don’t have the budget to run a Groupon. This is something that needs to be looked at in advance by the business.
I’m surprised that people think Groupon hurts small businesses. I’m a Groupon fan and have bought 4 of them in the past year. I am getting my bike tuned by the local bike shop, I have tried out 2 restaurants (not chains) that I never would have tried, and I signed up for zipcar. The businesses may give a deeper discount than they would in any other forum, and they may have to pay Groupon a percentage, but they get cash up front. A amall business can use an influx of cash to do a lot of things without having to borrow it. For a consumer like me, I get great deals I couldn’t get elsewhere, they have a long expiration date, and they have real value. I think Groupon is good for everyone.
@Erica (#29) I’m glad you brought that up. Almost as bad is the Groupon “deforestation” ad with Elizabeth Hurley. Also in poor taste IMO.
I liked most of the deals I got and the fact that there was no hassle to use any of them.
A lot of less known businesses promote themselves on Groupon. I like discovering new places if only to support the local economy. In this case, the discount is less important.
A couple of times I bought stuff I didn’t need. Groupon refunded my money when I canceled it.
What I didn’t like – having to keep track of groupons and remembering to use them. Also, the amounts are sometimes defined such that you end up spending more.
For example, I got a Barnes and Noble coupon – $10 for $20. I bought a book worth $30. So it ended up costing me $20, a little more than I would pay on Amazon.com by a couple of dollars. Anyway, the reason I did it is because I wanted to support my local Barnes and Noble.
As for hurting businesses, I am sorry to hear that. I wish I knew the facts but the big picture is everyone involved (business owner, groupon, and user) need to understand what they are getting into before signing up for it. I hope most deals benefit everyone. Here is an example of a local cafe in Portland that had a bad experience:
http://posiescafe.com/wp/?p=316
So the bottom line is make sure it is a good deal for YOU.
From a busienss perspective, Groupon and other social coupons are mixed. Some businesses have been hurt by using such sites, because the coupons that are offered only pay Groupon, as opposed to the businesses themselves. What businesses hopefully get is visibility and exposure, but many people will mainly use groupon to get coupons, use them, and move on to the next deal.
On the rare occasion that we go out to a local restaurant, I want to pay in full and leave a big tip. I dislike being cheap with local businesses.
I think the whole Groupon craze is another form of consumerism and similar to going to a 99 cent shop and buying a bunch of stuff you don’t need but get it just because it is on sale.
I guess I also don’t really understand how Groupon is so horrible for small buisnesses…if its such a bad deal for them then why would they sign up? Its not like they’re being forced to offer Groupons.
I think Groupon (and the other similar discount websites) is great when used appropriately.
They’re bad when people use them as a reason to buy Stuff (even if that Stuff is in the form of restaurant gift cards or other intangibles). I have one Groupon regret that I still have, but I’ve learned my lesson.
However, Groupons are amazing when you can buy experiences that you would have likely never learned about nor wanted to have purchased at full price. I purchased a Groupon for a painting class, and I have since gone back 4 more times (paying full price) to do paintings that I love having in my home. I’ve told several people about the place and I know three different people who have gone (who otherwise likely wouldn’t have known about the place). I think the Groupon benefited the painting place well.
I also got a Living Social deal with a yoga place. I loved it so much that I’ve since signed up as a regular and continue to go (as does my friend who also signed up).
As with everything in life, it’s all about balance and making the right decision.
I know Groupon has received a lot of criticisms for their Superbowl commercials (which I didn’t watch) and for some of the businesses they offer discounts for being bad. But overall, I think they have a great vision. Consumers need to own up to their choices no matter what.
I’m lukewarm on the concept. I can see they can be a great way to save money, but I’ve had problems. One is, we end up spending more than we would have because we think we’re getting a deal. Another is I feel pressured to go out because I have a discount, when it turns out I’d be perfectly happy not going. Also my husband is an impulse shopper, so they are dangerous for him; he ends up buying discounts we don’t need and probably shouldn’t use.
If you do it right I’m sure they’re great. I guess I’m just not one of those people.
The people I know who use groupon or similar deals are the people who yes eat out or do social activities more often than I do BUT are going to these places because of the coupons.
I really haven’t seen these people have any loyalty but rather looking to see what fresh blood er coupon has showed up next. Also it has taught them NOT to spend unless there is a coupon or discount attached, again decreasing the chance they will refrequent a business, even if they liked it!
I do like the idea of businesses giving out 10% or whatever coupons to patrons who frequent their restaurant, because it’s rewarding loyalty and repeat business.
I’d like to put out a strategy for saving money on the go. I have a plan to go to a conference then a vacation afterwards in San Francisco then Napa Valley.
My strategy is that I monitor the deals in my area looking for things that are on my list of todos around locally and then add the place that I plan to go to later also. Saves TONS on my trip costs. Food and activities at 50%+ off.
I use groupon/livingsocial for restaurants that look like we would like to try or already have tried and like as well as massages (I hurt my back and monthly massages help but I can’t always afford them so half off helps me afford them), and for other things we know we will use, like amazon. This has saved me a lot of money but yes it requires self control just like normal coupons.
I actually JUST bought my first coupon– a one year Sunday only subscription to the local newspaper for $10. I’ve been wanting to subscribe for months not but held off. Six months of Sunday only on “sale” is $20 so I knew when I saw the Groupon this was the perfect way to do it. Now I get Groupon emails and honestly don’t look at them. I found out about this particular Groupon through a couponing website.
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.)
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?
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.
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.
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. 🙂
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.
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.
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.
Groupon seems like it might be a great way to save when you spend, helping frugal folks have a little fun along the way.
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!
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.
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”
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
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.
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?
Come on people, tell me about how to make money with groupon instead of spending it!
Spending is for suckers! 😀
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.
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.
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.
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).
The nearest town to us that has a groupon-clone is 40 min away. We don’t use it.
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.
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
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.
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.
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.
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.
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.
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).
Stephen #63, I just read the article. That is horrible. I guess there will always be people who try to scham the system.
@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.
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.
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.
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.
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.
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.