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Group Coupons – a Bitter or Sweet Deal?

Love (and shopping) is in the air, Ottawa, Spring 2011

Unless you spent the last few years in a cave, you probably noted the emergence of dozens of “group coupon” websites: Groupon, LivingSocial, Koopon, DealFind and many others are probably already serving your city. Simply type the name of your city plus “deal” and they will pop up in your search results. Or just look at this blog’s sidebar: Groupon often advertises here.

I’m kind of a late adopter and I never really paid much attention to these websites until a few months ago, when I noticed Deal Page, a page that aggregates all the deals for a given city. I found it was a pretty smart idea because there are simply too many group coupon websites on the market, and each of them requires you to log in to see the deal of the day. Deal Page bypasses all that: a quick glance at the page will show you all the relevant deals for your city.

I bookmarked the page and started checking it once in a while. Most offers seemed to be pretty good deals, offering hefty discounts on spa packages, meals in trendy restaurants or yoga/Pilates classes. In the past 6 months, I bought two deals on two different websites, one for a pedicure/manicure and one for a spa package.

First “Captain Obvious” point—these deals do save you money but chances are you will spend more than you intended to. Group coupons encourage people to buy “treats,” that is non-essential services such beauty services or restaurant vouchers. Chances are you didn’t really need karate classes but you bought a package because it seems like a sweet deal. If you are looking for deals to make ends meet at the end of the month, don’t bother. Or check out these 11 Ways to Resist Wasting Your Money on Groupon and Other Deal Sites.

So, all’s for the best, in the best of all possible worlds? Not according to some disgruntled businesses and customers who experienced group coupon nightmares.

The number one complaint from businesses seems to be that they didn’t know what they were getting into. Group coupon business clients mostly want to spread the word and attract repeat customers. However, most of them are small businesses and they are not always prepared for the potential unexpected large influx of deal buyers. In some instance, so many people buy the deal that it would take the small business several years of working full-time to reasonably honour them all.

Other businesses report that while they don’t expect to make a profit when offering a deal (the service or goods are heavily discounted and social websites take a large cut), they have problems just staying afloat. And deal-seekers can be rude, cheat or “forget” to tip staff members. Finally, there are apparently less repeat customers than most businesses hoped for. It’s true that as a customer, I probably won’t come back to the spa where I had my mani/pedi: the full-price tag of the service is simply too high.

On the other side, group coupon buyers may find that it is difficult to schedule appointment due to the masses that bought the same deal. For the pedi/mani deal I bought, I was lucky: I called right away and was scheduled within a week or two. Mind you, that was almost two months ago and I’m willing to bet pedicures are not the best-selling service in the dead of the winter. I’m scheduled to use the spa package deal early May—it took almost two months to get an appointment.

Other buyers complain that they are treated as sub-par customers because businesses don’t feel they are getting their money worth. Scams are starting to appear as well. For instance, this Valentine’s Day offer wasn’t such as sweet deal, and a photography deal was recently pulled off after it was revealed the photographer stole pictures to promote her business.

I will continue to check upcoming deals but I’m getting really picky—not that I was a big consumer before anyway.

Have you ever used a group coupon website? Bought a deal? What was your experience?

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