How to use Groupon and other discount sites
By now most people have heard of Groupon,
the daily deal site that offers heavily discounted coupons for a
variety of goods and services. Its rapid growth Ė management recently
turned down a $6 billion offer from Google to buy the company Ė has
spawned a host of competitors, such as Living Social and Dealmap, and given a much-needed shot in the arm to hundreds of local retailers.
is how Groupon and other daily deal sites work: A small business Ė
typically a neighborhood restaurant, a spa, or a local theater Ė agrees
to discount the cost of its goods of services by 50 percent or more.
Groupon, or one of its competitors, then markets that discounted offer
to its subscriber base in the form of an online coupon. Subscribers pay
Groupon via Paypal or credit card and then take the coupon to the local
business to cash in their discounted deal.
Most deals are
presented on a regional basis and run for just one day, although they
can be extended. Once a subscriber signs-up, they get notified of a new
local deal every day, usually by e-mail or text. Supposedly everybody
wins: Groupon makes a hefty commission, the local business gets a rush
of new customers, and the consumer gets a great deal.
However, despite the apparent win-win, there are a few things that the consumer should look out for:
- Make sure that itís something you really need. There is no doubt
that discounted online coupons make consumers spend more. Some offers
seem such a bargain, e.g. $25 off $50 worth of spa treatments, that they
are hard to resist. The key is to ask yourself whether you would have
ever spent the original $50. If the answer is yes, then you will have
genuinely saved $25. But if the answer is no, then you are actually out
If your plan is to treat yourself or your family, then
thatís great, but you havenít saved money. Instead, youíve been
persuaded to part with money that could have been put toward something
- Carefully monitor the expiration date of the
offer. Many offers run for six months but others have a much shorter
duration. Make sure you redeem your purchase within the specified
period. Businesses that participate in these programs are still
obligated to honor the coupon price after the promotion is over, but you
wonít get the additional discounted value.
- Make sure that itís a genuine deal. Groupon recently suffered some bad press
from a Valentineís Day offer than didnít appear to be the bargain that
was advertised. Make sure the discounted deal is genuine, e.g. in a
restaurant, you are ordering from the regular menu.
- Subscribe to multiple discount services. Donít just subscribe to Groupon
or Living Social. Try to find as many group discounters as you can in
your area. That way you can compare prices and have more chance of
finding the deal thatís right for you.
Comment by Sarah, posted 9/16/2011, 6:38 PM:
I'll just say, where's the love for Portland, Groupon? We are just as connected as Seattle, and much more community focused than any city on your list (hello, Dallas?!), and should be a strong market for any locally-focused web service. <a href="http://www.dealevents.com/diets/dealevents">dealevents</a>
Comment by Elle, posted 2/19/2011, 5:55 PM:
Very succinct post. I once considered signing up with Groupon, but I didn't when I realized I would end up spending more than I needed too for the deal. If you use these services you must have a plan in mine. http://CleverlyChanging.com