My Thoughts on Groupon

I've been subscribed to the email-per-day-coupon-offer-site Groupon for about three months now, and I thought I'd share my take on the service with you.

But before I do that, here's a piece from US News on why they are shunning Groupon. Their reasons for disliking the service:

Here's why I'm not interested: I don't want a daily temptation to spend money I should probably be saving. Sure, it's possible that Groupon would one day send me an offer on something I need to buy anyway, saving me a few bucks. But the main purpose of coupons and every other kind of retail come-on—whether delivered by catalogue, email, cell phone alert, or teleportation—is to separate consumers from money they'd otherwise put in the bank. Consumers don't need to be persuaded to buy things they need; the whole purpose of marketing is to convince people to buy things they don't need.

In other words, they don't want the temptation to buy something they don't want/need.

Now, here's my take on the service:

• First of all, it's free (just had to state that for anyone who doesn't know.) So it's not costing me anything to try it out.


• There are an awful lot of useless deals. I don't need/want a manicure, car detailing, or sun tanning service. I wish there was a way to say "these are the types of deals I'm interested in" and only receive those. Adding in all the others simply is an extra email I need to handle every day.


• If you're not careful or don't have self-control, I can see where all the offers would get you to buy stuff you never even considered before -- adding up to a lot of extra/unplanned spending.


• The deals aren't that good. For instance, I recently received an offer to "save over $150" (or something similar) on a car detailing -- I could get it for $89. Driving by the detailing place on my way to work, I saw their sign offering the $89 deal to everyone. So yeah, I might be saving $150 on some theoretical "retail value" price that no one has ever paid, but I'm not saving versus anyone simply driving in to the business.


• It is kinda fun to see all the businesses you never knew were in your area. Not that I'd ever use them (probably), but it's fun to see what they've come up with each day.


• I did get lucky once (the only time I purchased a Groupon.) I called a friend and set up a lunch meeting for a place he likes. Two weeks later -- a day before our actual lunch -- I get a Groupon for $20 of food for $10 AT THE PLACE WE WERE GOING TO! Ch-ching! I snapped up a coupon very quickly and used it a day later, thank you very much.


• That said, the $20 of food for $10 had some restrictions. I couldn't get the daily deal (which was cheaper), I had to order off the menu (where prices were higher.) So my $10 savings was more like $7. Then I had to use it all at once. The cost of our lunches was $18 or so, so instead of wasting my last $2 I bought an extra salad for my wife (which she loved) and took it home that evening. So I ended up spending more than I intended.


• I wonder how many people buy the Groupon and then never redeem it. This piece seems to indicate that it's somewhere between 10% and 50% depending on the service. The reason I ask is because a co-worker of mine bought a Groupon a couple months ago. When I asked him how it had worked out (it was for a high-end restaurant) he said, "Oh, I'd forgotten about that. I need to use it." And he's a penny pincher too -- so if he forgot about it, I'm sure many more people do as well. I don't need to tell you what a bad deal this would be, right?

In the end, I really don't think much about Groupon. I'm planning on keeping the service for another month or so to see if it gets any better, but if not, I think I'll cancel it. Not enough value for me to justify keeping on the list -- even if it is free.

Do any of you use Groupon? Do you like it or hate it?

Comments

[Rae]

You’ve summed up my opinion pretty nicely.

It’s not very tempting to me, but that is partly because my city doesn’t have deals—the city 45 min away does. But once in a blue moon, a good one will come out for my area.

There was once a Barnes & Noble one ($20 Groupon for $10), which was great, as I spend maybe $100/year there. (And similar site Living Social had an Amazon one—even better).

The only other decent Groupon I’ve seen was one for a local sushi place we go to once a month or so. $30 of food for $15. It had limits, such as dinner only, but since we almost always go there for dinner anyway, I bought two (one was a gift to my S.O., since you were limited to one for yourself and two to give as gifts). Since our bill was usually right around the $30 mark anyway, it was a good deal, but I have seen others that were not nearly as good.

Also, I’ve started seeing many reports of how bad they can be for the businesses (especially small business) who offer the deals—they’ll end up losing more money than anything, because Groupon seems to push them to offer deals where customers really struggle to spend more than the Groupon—meaning the business doesn’t actually get more business.

[Steve]

It's pretty mediocre for me on a whole, but there are deals worth pursuing. I recently purchased a $25 of wine for $75. We drink wine regularly and is something we'd be buying anyways. There can also be activities like paintball, dancing lessons, etc. which are sometimes heavily discounted. Do I go paintballing regularly? No. Do I like to find things to do on the weekend anyways, and might be spending that money doing something less fun? Certainly. Is it an easy way to get a big group of friends together for something? Definitely.

Groupon is no different than anything else. Control yourself (and your wallet).

[Ginger]

Groupon and many other sites allow you to check boxes for what kind of deals you want sent to your email. I rarely buy any of them but the few I have bought have all gotten used, most quite quickly.

[Mike B]

The gym where I work part time offered a deal through Living Social and sold 250 or so trial memberships (12 sessions for $35). Of those 250, we've only had about 90 show up. We're hoping that about 10% sign up as full time members.

[Matt]

I use Groupon and LivingSocial which is basically the same deal. Yes, I agree that it can tempt you to do things that you would otherwise not do. I ignore 90% of them.

That being said, I think it's a great way to get us to try restaurants that we've always wanted to try or to try a restaurant that we've never heard of. I like to think that I'm capable of making the decision on whether to buy or not and when a Saturday night comes along and we want to go out, I pick out a Groupon or other discount that I'm sitting on and give it a try.

I have had one expire, but in many (if not all) states the Groupon is still worth face value (If it's a $20 Groupon for $10, after the expiration it's worth the $10 you paid). So, if it does happen it's not a disaster that I have to pay regular price to go to a restaurant I've been meaning to try anyway.

Is it a great deal? Probably not, but it's definitely a good deal if you're disciplined.

[tom]

I subscribe to Groupon and LivingSocial

It's completely worth it if you find 1 deal a month or even 1 deal a quarter.

For example, my wife and I go the movies, maybe, once a quarter if that. Recently there have been 2, buy-one-get-one free offers from LivingSocial. We combined one of those with a $10 off $20 to a restaurant we like, and had a great night out.

Why unsubscribe and pass up deals when all you have to do is delete the email?

[Claire]

I got season tickets to my local ballet company for $30, down from $30+ per ticket. That was a pretty great deal, and I really enjoyed going to the ballet with my mum. I would say I buy a deal on groupon maybe once a quarter, and always make sure to use it within about a month of purchase.

[tom]

RE: Businesses who use Groupon

I've seen the same reports that say it's not a good deal for businesses to use Groupon because they will lose money, but that's a risk they chose.

They are essentially buying customer visits. If they are confident that this will generate repeat business, then it's worth losing money.

It's all about Risk/Reward.

[LotharBot]

My thoughts on Groupon: their business model is unsustainable. They're bleeding cash and don't seem to have a sensible plan to get in the black. Their S1 is a mess. A lot of businesses that deal with them are extremely unhappy with the results. See, for example, http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-collapse/

OK, so I'm thinking like an investor, not a customer. Still, I haven't seen any deals come up that make me, as a customer, impressed.

[Matt]

Thanx for the info. It sounds like something I will pass on. I don't need any more "things" clogging up my in box waisting my time.

[Amanda @ Heart Tree Home]

I have had GREAT success with Groupon. As with anything, self control will mandate if it works for you. I bought a $40 gift card for $20 to the place that my husband and I had our wedding reception at, and which we return to every year on our Anniversary. Also, I was able to buy rock climbing starter packages for a quarter of the cost of a first time day pass, and it included equipment and another free day after; we had been meaning to try it out for a while, and it was a great deal. For the cost of a dinner and a movie we got two full days of climbing at the gym.

[Texas Wahoo]

"•I wonder how many people buy the Groupon and then never redeem it. This piece seems to indicate that it's somewhere between 10% and 50% depending on the service. The reason I ask is because a co-worker of mine bought a Groupon a couple months ago. When I asked him how it had worked out (it was for a high-end restaurant) he said, "Oh, I'd forgotten about that. I need to use it." And he's a penny pincher too -- so if he forgot about it, I'm sure many more people do as well. I don't need to tell you what a bad deal this would be, right?"

Groupon will actually refund the money you spent if you fail to use the deal before it expires. Technically, I think the establishment is supposed to refund your money - but Groupon will do it if they don't.

[Bad_Brad]

I agree with the US News article. Groupon is a nice idea in theory, but reality is that 99% of Groupon's deals are spam in my inbox. Groupon deals are for things that are not necessities. It's a temptation more than anything. And I don't need any more temptation in my life.

[Scott]

They might not be around all that long anyways.

http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-collapse/

[texashaze]

Does anyone remember the dot com bubble? This looks like a leftover from those days. I subscribed for a month and really never found anything good unless I wanted to get my nails done or a yoga class.

[Holly]

I love Groupon and I hope it sticks around. My husband and I have used a few restaurant deals ($40 of food for $20) and they were for places that we have been wanting to try. We need an excuse to have a date night now and again since we are natural homebodies.

One bad thing that I can say is that once my kids find out that we're planning to go, they want to come, too! So much for those romantic dinners...

[MelMoitzen]

I'm finding the value of restaurant deals aren't all that much better in nature than the free Pennysaver/MoneyMailer type coupons (buy one entree, get one free) that you don't have to pay for. That having been said--in my area, at least--the restaurants are of a better caliber than the ones who do traditional mass couponing.

In short, I'm addicted to these things, and I'm finding them really easy to buy...but actually using them before the expiration date is another matter entirely. I'm not sure I really can get (or want) a rotisserie chicken that I've already paid for by this Friday. The lines at the businesses on the last day or two before expiration are usually looooong.

I believe that under most circumstances, the base value never expires. So if you pay $10 for $20 worth of food and that offer expires 6/30/11, the business then needs to still accept it and give you $10 off if you show up 7/1/11 and after.

[Dan]

I've used both Groupon and LivingSocial and think they're both great, for the consumer at least.

I only buy things I KNOW I would normally buy anyway. And in some cases it has saved me a ton of money. For example, I got a week of soccer camp for 3 of my kids at half price saving me $345. Not too shabby!

[KaseyD]

I get Groupon and Tippr emails. I view these services similar to the Sunday newpaper advertising inserts - I'll look and if I use/want/need the item I'll "clip" the coupon.

I've used Groupon successfully for several items, including: Christmas gifts (helped give me ideas), garden supplies (I needed anyway) and new grocery store (close to me, but I never tried before). That one was 50% off groceries I'd buy anyway!; it's a no-brainer for me.

Nonetheless, by clicking through the links LotharBot and Scott gave, and getting to read the merchant agreement, one has to wonder how desperate the merchant has to be to sign up.

That said, since I can control most impulse buying, I think this is an excellent way to locate and support local businesses. I've revisited two of the four local Groupon businesses after my original Groupon purchase.

[jes]

Having pretty good self-control, I've found Groupon to be a good deal. I bought a flotation/massage session (I'd been curious about flotation tanks), a coupon for a fairly expensive restaurant I was going to anyway, a $20 Amazon coupon for $10... These are excellent deals. Like I said, self-control. For the merchants they're not such a great deal; my hairdresser lost a bundle on an offer. (Living Social, they take a huge whack out of each coupon sold)

[kh]

I LOVE Groupon, but you have to use it properly for both the business and consumer to benefit. I got a family membership to a local museum (that my kids love) for $40. After our year membership was up, we loved it so much that I paid the full price ($90 or so) to renew the membership. Win for business and win for us. I think the memberships tend to be the best deals for us and for the business, but I have also used Groupons for book stores and restaurants. If I have benefited from using a Groupon at a business, I try to show some loyalty by returning to the place if it was a good experience.

[Gina]

I agree that it requires discipline to be useful and actually save you money. I refuse to use it for anything that I wouldn't normally buy. For example, it seems that I get a lot of emails for spa treatments, which I would not normally use. However, I recently got a $20 coupon for $10 at Old Navy where I can always buy clothes for my kids who are always growing out of their clothes and that is a good deal.

[optionsdude]

My wife signed me up for a Groupon at a jewelry store. Hint. Hint.

[Brian]

Check out deal aggregator sites. I find them to be more useful-- there's dealradar, dealgator, 8coupons, etc.
Also there's a secondary market for groupons people can't use, you can also get a good deal on those.

['Beachin]

I've been using Groupon for about 6 months and Living Social for about 3. Like most, I agree that the majority of deals are useless, but when you see one that benefits you how can this be bad ?

I bought a dinner cruise for 1/2 off and know I really got 50% off as I previously paid regular price for the same cruise. I would have never known this offer existed but for Groupon since the cruise company didn't offer the deal anywhere else.

I also got 2 movie tickets through Fandango for $4, so that was a great deal as well.

I look at it like any other coupon or discount aggregate site. They offer a lot of stuff that most people do not have interest in, but occasionally provide a great deal. Since it cost you nothing what are you losing ?

BTW, it would be nice if you did an article on other discount sites so we had a single location of places that your readers recommended.

Thanks for bringing us such a diverse collection of information. I really love that, along with the great feedback from users. It really shows how diverse people are.

[Jennifer Lissette]

I've only purchased a Groupon once: $10 for $20 worth of merchandise at Old Navy. It worked out well. My son needed new shirts and I was able to purchase 6 for $11. But those super great deals on something I'd use anyway are few and far between. I can find out about them through my favorite thrifty bloggers rather than be tempted daily on Groupon,

[Jclimber]

Groupon is definitely a good deal if you get one for a place you are going to go anyway. I got one for photo processing and another for a restaurant I wanted to try out

[Jenna]

I've purchased several Groupon (and similar) deals in the past, mostly for restaurants, but also for things like bowling and movie tickets. I have enough self control that I don't feel tempted to buy what I can't afford, but it is annoying that most offers are things that don't interest me.

I've recently found ScoutMob, which (so far) I like much better than Groupon in terms of the way they operate. It's not yet as widespread, and my city is currently on a weekly deal rather than the full daily deal plan, but you don't have to buy something up front...it's more like a coupon than a discount gift certificate. We recently had dinner at one of our favorite restaurants, which had an offer for 50% off up to $60 (so, $30 max discount), and it included alcohol and specials. So far, all the deals I've seen on there were for non-chain, local restaurants - places we likely wouldn't have seen discounts from otherwise.