Groupon....Great deals or scam?

Mr.Boy

I've just bought a voucher for Oakbridge Wine... £8 for £30 of wine. When I looked last week I worked out I could just squeeze 4 bottles for £30 and got the voucher. The voucher activated today and now all their prices are up like 30%... £4.99 -> £7.99, £8.49 -> £11.99, etc. Seems a bit too big a coincidence and now the prices even with the voucher aren't attractive to me.

Badgergal

I bought a voucher for highlights the other day and haven't been able to get through to the salon, constantly engaged and I had been hoping to get my hair done in the next month or so. At this rate I won't be able to get an appt til autumn...perhaps I should just cancel the voucher.

BrandNewDay

A lot of the vendors who go with Groupon find themselves in over their heads. I know of a cleaning company in America that was almost put out of business by a Groupon offer, and there's at least one news article about how Groupon nearly buried a coffee shop.

http://posiescafe.com/wp/?p=316

Chilly_Willy

I bought the Aston Martin experience (£190) and three days before I was to have the car delivered I received an email from the supplier explaining that their insurance provider had pulled the rug out from under them. They were very sorry, but I'd have to reschedule. This was after not being able to book on any of the five preferred days I'd indicated three months earlier. Then a month later, a friend who had booked the same experience was informed a week before he was due to have the car delivered that it had blown it's gear box. Again, the company was very sorry but he would have to reschedule.. Coincidence? I suspect the company is plugging gaps when they are unable to make regular returns on the car with Groupon customers but if they are able cash in on a particular day the Groupon punters are cut adrift. Groupon did refund both of us but only after initially stating we'd be credited £190 to our a/c's.

I had earlier bought a voucher for two hours cleaning services and attempted to redeem it today only to find that the company's phone number is out of service (googling mccleanandgo returns the supplying partner). So I expect I'll be requesting another refund shortly.

Groupon are going to have be more selective in their decisions as to companies they partner with, but I guess that's a conundrum for them and potential partners as established, successful businesses are unlikely to require promotion via a Groupon type service.

nolan8213

I run my own restaurant & jazz bar in South London, been open for over 2 years. Since Groupon has been operating I have received numerous sales calls from them guaranteeing business (note I said business not profit). After a number of sales calls in 2010 we gave in and listened. We had heard about them though a number of publicities such as in Time Out. Our restaurant menu is formed as a 2 Course/3 Course Menu Deal £20 & £25 respectively with free entry to the live jazz music we do every night in the upstairs bar. Decently well priced for such an upcoming area. They said their subscribers respond well to offers showing a 50% - 90% discount. We ended with organising an offer of £12.50 for a £25 menu = 50% discount. Groupon's commission is 50% of the priced deal. This is the breakdown.

Normal Value - £25
Groupon Customers - £12.50 for each voucher
Groupon Sales - £6.25 commission
Supplier / Us - £6.25 (vatable)

Note: This effectively makes us lose money in the hope people will spend on drinks in order to break even. Also note Groupon sells approximately 1500 vouchers per deal.
That is nearly £10,000 turnover in their pocket per deal per day!!!

We wanted the deal to run in such that the offer expires just before our peak season. 3 months later still no feature. We called them up and asked what was taking them so long. They said that due to the growing demand our offer was not extravagant enough and that their commission has now been raised to 60%, and that they wanted us to re-evaluate the deal to offer more to their customers. This was clearly out of our range and we ask that they cancel our contract. Not to get into too much details they said this is not possible. Now this is where the Office of Fair Trading would be interested. The salesperson gave us FREE advice on how to get around this solving this problem. He advised us to provide an Exclusive Menu for Groupon voucher redeemers which has fewer menu choices and cheaper dishes than to our regular menu. He also advised us to use cheaper ingredients and to create cheap dishes that were not on the regular menu so that customers could not compare the difference. i.e. Factory Chips instead of Homemade Chips & Cheap cuts of beef instead of a true Rib-Eye Steak

Having heard this I had emailed OFT on their scams. Unfortunately I have not physical proof of this. All I can say is I will NEVER deceive or scam a customer out of pocket for my business' survival. If I want repeat business I shall do so but only if I can provide the same quality that was 1st given before. As for Groupon, I am still waiting for them to get back to me and sue me for breach of contract.

Advice to the public, only use in-house meal deals and not 3rd party companies advertising them. Not only are the businesses suffering but the consumer will never receive the true value of a product. Ever wondered why businesses in Central London are forced to charge a 200% mark up on their menu prices. I give you a clue it has nothing to do with the quality.

classixuk

I can echo the above, as a business owner myself, the only winner on a Groupon Deal is Groupon themselves.

But I think I've thought of a fabulous way you MSE'rs can save even more money than Groupon offers, and also help the business who is offering the Groupon too!

This should work with other 'group deal websites' too.

As pointed out in the above post, when Groupon signs up a business, they encourage the business to do a massive discount (50-90%) off their normal price. When the deal is advertised, Groupon also take half of whatever is sold leaving the business owner with next to nothing.

So, for example, you see a Groupon deal like this:

Debbies Salon

• Fish Pedicure
• Eyelash Tint
• Leg Wax
• Brow Wax
• Curly Blow
• Highlights

£29 instead of £99!

You think that's a great deal, right?

But Debbie is being charged 50% + VAT by Groupon for advertising the deal. Of that £29, she only ever gets given £12.08. Groupon gets the rest. Think how poor Debbie feels doing all that work (and buying stock to do it) for £12!

So here's what you should try...

When you see the Groupon deal offered with a small business (one where you know the owner or manager is probably available), try giving them a call and asking if you can come in for the service and pay them in cash instead?

Like this:

"Hi Debbie. I see you're advertising on Groupon today for tons of stuff for £29. I'd like to come in next week and have it done, but I'm aware that Groupon take 50% plus the VAT out your cash. I worked it out and you'll only get £12. Would you rather I made the appointment outside of Groupon and I'll give you £24 cash instead?"

Now I can tell you, that as a business owner, I would welcome you with open arms. I would throw out the red carpet. I wouldn't be using the cheap products on you, or offering you a 'limited menu' as you just enabled me to take twice as much on the deal.

And you? You just saved an extra 12% on top of the Groupon saving!

What do you think guys? Who will be the first to try it?

donteatthat

classixuk wrote: »

I can echo the above, as a business owner myself, the only winner on a Groupon Deal is Groupon themselves.

But I think I've thought of a fabulous way you MSE'rs can save even more money than Groupon offers, and also help the business who is offering the Groupon too!

This should work with other 'group deal websites' too.

As pointed out in the above post, when Groupon signs up a business, they encourage the business to do a massive discount (50-90%) off their normal price. When the deal is advertised, Groupon also take half of whatever is sold leaving the business owner with next to nothing.

So, for example, you see a Groupon deal like this:

Debbies Salon

• Fish Pedicure
• Eyelash Tint
• Leg Wax
• Brow Wax
• Curly Blow
• Highlights

£29 instead of £99!

You think that's a great deal, right?

But Debbie is being charged 50% + VAT by Groupon for advertising the deal. Of that £29, she only ever gets given £12.08. Groupon gets the rest. Think how poor Debbie feels doing all that work (and buying stock to do it) for £12!

So here's what you should try...

When you see the Groupon deal offered with a small business (one where you know the owner or manager is probably available), try giving them a call and asking if you can come in for the service and pay them in cash instead?

Like this:

"Hi Debbie. I see you're advertising on Groupon today for tons of stuff for £29. I'd like to come in next week and have it done, but I'm aware that Groupon take 50% plus the VAT out your cash. I worked it out and you'll only get £12. Would you rather I made the appointment outside of Groupon and I'll give you £24 cash instead?"

Now I can tell you, that as a business owner, I would welcome you with open arms. I would throw out the red carpet. I wouldn't be using the cheap products on you, or offering you a 'limited menu' as you just enabled me to take twice as much on the deal.

And you? You just saved an extra 12% on top of the Groupon saving!

What do you think guys? Who will be the first to try it?

That sounds great! Only isn't the paying in cash part slightly dodgy!?

classixuk

donteatthat wrote: »

That sounds great! Only isn't the paying in cash part slightly dodgy!?

Well, not really, unless you intend to pay with forged notes. LOL

The reason cash is preferred in business (at least by me) is that when you pay by card (debit or credit), I get charged 2.5% of the money by the bank for handling the payment. Also, cash in my till = cashflow. I can use that cash to pay wages, such as the cleaner, at the end of the week.

To a businessman/woman, cash is always king.

donteatthat

lol I see! I was thinking you were meaning pay in cash and not put through the books

savingkellyjo

Well, I know of a few cases where your idea has already worked. A friend of mine is a photographer (not in the UK though) and she does a few deals through Groupon. Sometimes people call her to ask questions about the deal before they buy the voucher and she is the first to propose them to pay her directly and not through Groupon. Also, apparently they take a while to pay the businesses and if a customer decides not to the use the coupon, they keep all the money.

I guess it is possible if you contact the owner directly, in large companies the employees wouldn't care...