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The Savvy Online Consumer

Groupon Revealed: The Pros and Cons of Daily Deals

By SiteJabber on October 3rd, 2010 • 41 comments

Have you ever wondered how daily deals sites worked? Hailed as a great success this new, niche retail market is helping people to save in creative ways, on a daily basis. But are there any cons? We have taken a close look at what the daily deal market consisted of, in an effort to give consumers a clearer understanding of what is really going on. We have illustrated the most important findings of our study in the graphic below including comparisons of Groupon, Living Social, Woot, and BuyWithMe.

(click image to enlarge)




Comments

41 Responses to “Groupon Revealed: The Pros and Cons of Daily Deals”
  1. This doesn’t mention Groupon services being over-sold..

    There have been many times when I buy a service and the experience is totally changed due to the company overselling it’s services beyond capacity. For example, you buy a Groupon for a house cleaning service.. but when you call the company to use it, there’s literally a 6-month waiting list.

  2. Cindy says:

    Not every daily deal site works this way. Sites like DealOn and HomeRun have falling price models so the deal is always “on”. The cool thing with them is that as more people buy the cheaper the deal is. So as a consumer there is more incentive to share.

  3. Todd says:

    I am getting so sick of these daily deals that developed in the face of our recession. Most offer lousy value like the massages at third rate spas by horrible cmts. Now that I see this info graphic I understand why grouon makes so much money and why 90 percent of their deals suck. I did get a good deal at a local Mexican place that I go to anyways though.

    • Wendy says:

      I have just advertised a Groupon offer and now I regrete it. I think my husband wants to divorce me! The whole thing is cra*p. Our offer is really good because our Pub/Restaurant has got a very good reputation, from 12 yrs of hard work. Our restuarant sold 956 Groupons in 24 hrs and is valid for 3 months. We cannot accommodate that number of custom. We take £5.45 per person for a meal that could cost £26.75 pp. Groupon take 40% of the sales and I’d imagine the very keen Rep gets a hefty commission. She wanted the offer to carry for 3 more days at least, which I stopped! It is greatly oversold on the basis of pure greed. Avoid at all costs businesses!

      • Cheryl says:

        No offense, but -didn’t you know all of this before you committed to Groupon?

        • Wendy Oxlade says:

          Unfortunately the G/O rep did not do her job properly. Otherwise we would have been very aware of their greed. It was a previous G/O customer who had been treated the same way who brought it to our attention on the day. Since then we have heard countless stories and it made it to the National press. The OFT investigated G/O and came up with a whole list of requirements which by English laws they have to trade under to avoid prosecution and therefore had to change thier code of practice.

      • Eisley says:

        I agree. They do not force you to do anything. They will help you accommodate this many people if you call them and extend the expiration date.

        • Wendy Oxlade says:

          Do you work for G/O? This comment is laughable! It is not for us to go backrupt to benefit the likes of the Multinational companies. Please read my above response as you clearly do not understand how bad the company is. And read every other comment on this website. Group on should be exterminated!!!

  4. Steven Appleby says:

    The initial Groupon link pertains to the subject or product searched on the Internet.. But follow through and one is offered something completely different as a money saving offer.

    And then there are limitations.

    If people want to spend their time pursuing these pyramid selling sites that is their choice, but should not complain if the offer ends up not being favourable. One would not normally welcome a doorstep seller offering similar, so…

    SA

  5. CB says:

    Do people have safety/privacy issues with groupon or other coupon sites?

  6. Debbie says:

    We have never had a problem with groupon. Last deal was 1/2 price stay Marriott Victoria on Concierge floor with access to concierge lounge. We had a great room, view of Harbor and had a great time. We will definitely use groupon again.

  7. Julie says:

    I purchased a king sized bed yesterday from Groupon via crazypricebeds and double checked that it was the bed and mattress I was buying.
    There was nowhere in the smallprint that is was bed frame only and so I pressed BUY and gave them my card details.
    I then later went onto the crazypricebeds website and saw it said in brackets that you have to buy the mattress seperately.
    It did not say that on the groupon deal! It said features:sprung slats for extra support, a mattress that slots into the base……..
    Since then I have emailed both grouon and crzy price beds and have received an email back saying they will deal with my query within the next week due to phones being extremely busy.
    Since then they have now removed the wording about the mattress and added on the crazy beds site that the groupon voucher does NOT include mattress.
    They get you to purchase the item under false advertising, my order states with mattress so therefore I feel that is what they should be sending me seeing as they have already taken my money!
    Will not be using them again……..

  8. david lynch says:

    I used Groupon to buy a nikon camera from AJelectronics ,the camera was not fit for purpose ……although boasting 14 mgp it could not focus no quality .Now AJelectronics are marketing a Sony laptop using Groupon as a selling vehicle …..I would not touch it with the proverbial.
    Now I cannot get in touch with either AJelectronics or Groupon after returning the camera in agreement with them both.No answer to phonecalls or emails.
    Never again..go to Currys or similar and pay a few quid more for service.

  9. Nancy duPont says:

    Groupon is going downhill fast. The CEO should have sold it when he was offered a huge amount of money but he thought he was the next Mark Zuckerberg. I purchases a Swedish massage at PA Mobile at Optimal Sports Health Clubin Philadelphia on October 15 that could only be used the next day. I called the phone number all day to make a appointment and it only said that the voice mail box was full. I complained to Groupon and they said they would give me credit to my account. That was a week ago – still no credit – no apology.

  10. Nelli B says:

    Hi everyone. Re the GROUPON / CRAZYPRICEBEDS deal in September this year.

    I bought two separate vouchers and redeemed both on line. I received two separate emails from CRAZY saying thank you for my purchase and was I enjoying my new bed!!!!!!!!!!!!!

    No delivery. No joy from GROUPON who have passed the buck to CRAZY. Now CRAZY say they have no record of any orders in my name and to redeem the vouchers, i would have had to login to their website as a new user! How then did their website / order system know who i was, to send me two separate emails of ‘….hope you are enjoying your new bed….’????

    Just passing the buck. I have credit card statement but have been advised to go back to GROUPON to get them to refund me………!!

    a lot of scammers……

    ANYONE OUT THERE GET THEIR BED OR REFUND? TELL ME HOW YOU DID IT PLEASE…………!! ALSO, WHAT IS THE UPDATED STORY RE TRADING STANDARDS,…..ANYONE KNOW???? Been working in Europe for the past couple of months so kind of lost track a bit….

    Thank you………….

  11. Bill Howerton says:

    I have used GROUPON a number of times. But when I paid for a recent Rembrandt teeth whitening system, they refused to send me my merchandise. I have waited more than 2 weeks, and it still has yet to arrive. When I wrote them, to resolve the issue, they failed to even respond.

    I will be very reluctant to use them in the future

  12. Cath says:

    I ordered something from Groupon on November 28th 2011. It was a “deal” for an electric car…a Christmas gift for my nephew who would be on my side of the country for only a week during the holiday….and never got it on time… now janurary 24th 2012…still waiting for it. actually..i’m not waiting for it anymore. They also made me pay fees that wasn’t mention in the deal. I tried calling Groupon they would say they would try to contact the partner company and call me back in 2 to 3 days, they never do. I HAVE TO CALL Back weeks after week and re-explain the whole situation. And STILL they don’t do anything about it. I e-mailed a bunch of times… no answers. Never an answer. So cleary they don’t give a S$%t about their customers satisfaction. So really Groupon is a Scam. Also when they say they give you 10$ credit if you refer a new customer… they don’t. I reffered 2 new ones and had to call them so claim it and they would say…”oh sorry mam, you will see your credit in your account in the next few days” …and never got it. I gave up. Over a month of fighting with them to have my money back. I guess they won. But they lost a customer and i tell EVERYONE i can about how Groupon is a scam.

    • Julio says:

      There is an argument that these prtlfoams do hurt some retailers. However, they often are a form of promotion that make people more aware of the service or product. I know I’ve used Groupons at restaurants I would not have tried otherwise, and have become a repeat customer. Retailers such as Gilt Group do offer special deals, but often these are items that are being discounted across retail prtlfoams, and only available for a very limited time for a select group of people.

    • every human says:

      BION I’m impressed! Cool post!

    • certain issues says:

      That’s really thinking out of the box. Thanks!

    • multiple requests says:

      Alright alright alright that’s exactly what I needed!

    • specializes says:

      That’s a shrewd answer to a tricky question

  13. Prem says:

    In the entire process what is the commission or revenue for Groupon. On which business model it works. It would be nice, if this article has this information as well.

  14. Wendyb says:

    Groupon have made me so very angry.
    Purchased a voucher Oct 22nd 2011, bought a mattress but never received it, cancelled order and requested refund January 9th 2012, I’m still waiting for it. I keep getting told they have requested it and to wait 10 – 14 days. I asked them how they can take my money over night but I have to wait months to get it back, the answer I got was, I dont know!! I have asked to speak to a manager but none available, they say they will call me!! I have contacted trading standards, Office of fair trading, watchdog. Think it might have to be a solicitor next. I am really shocked that a company can treat consumers this way and get away with it.

    • wendy says:

      You can only blame Groupon for this cock-up. Trading Standards are onto them, Watchdog have covered them, as have many national UK papers last year.

  15. Maya says:

    I have bought a groupon voucher from matching bedrooms in uk and has been 3 months since and i have never received anything,Have contacted groupon customer service inumerous times via phone and emails but not one has done anything so far all they say is that the refund has been accepted and that i have to wait another 10 days,I have spoke with 4 different menbers of the team and nothing, the Manager is never available.They should close down bunch of gabbage.

    • wendyb says:

      I finally received my refund on 14th March after calling them and losing the plot! Matching Bedrooms sent me a cheque for the refund of the delivery charge so I have all my money back, I was promised compensation but as you can probably guess, there has been nothing.
      I will NEVER EVER entertain anything like this again, As the saying goes, “If it looks too good to be true, it probably is”.
      I am usually so cautious too!!

  16. Madasheck says:

    I HATE STUPONS(STUPID GROUPONS). I ordered an item on March 9 and it has not been shipped as of today, April 2. Calling customer service is a joke..because their hours are so riduculous because “they are afraid of the dark and weekends”. Ordered a claw candy/prize machine for my grandson and it never arrived. Do yourself a favor and just take the time to go to the store…..

  17. Kate says:

    I ordered a fan March 30th and they said it would be shipped within 7 to 10 business days. We are on the 12th business day and the FedEx number they assigned to it cannot be tracked. They have shoty business tactics and terrible terrible customer service. Also, I thought i was buying $64 Bill Cosby tickets at half price, $31. When I got to thte show I received tickets that were valued at 21.75 in the nosebleed section with a bunch of other groupon’ers who were also disappointed! After wasting nearly an hour on the phone, they are supposedly going to contact me within 24hours, I wont hold my breath! I will never use groupon again! If you are contemplating using this site, I say NOOOOOOO! Use ebay or amazon!

  18. Cherie says:

    I bought a Photobook America and was disappointed to find that 1)if I decide to change types/size of books I have to start all over, and 2) that there is a 40% off sale, so with my groupon I’ve saved only $4. I’ve not done this before and didn’t realize that the definitions for page numbers and ‘multiple’ is different than in real life. I actually put together 2 books, but they will only let me use the voucher for one. Big disappointment. I’ve written to groupon to complain.

  19. Mary hilsman says:

    I also ordered three things from groupon in the last two months and have not received any nor have I been able to reach them. I wish I had reviewed them at this site first and I never would have ordered anything. I noticed that they take your money fast, and I guess there is not much I can do about it.

  20. Ben p says:

    DANGER! WARNING! Mighty deals is a serious con in almost every area of this $#*! dysfunctional company. It wouldn’t surprise me if two people were running it from their bedroom. Guaranteed 30min + call wait time, every time I’ve called and that was mid morning time. Customer service doesn’t exist hence staff training non existent. These mighty deals, robotic type humans have never been taught manners and the 3 robots I spoke to had no emotions, which it presume roughly the number of people to run this hideous, pirate attempt to probably recreate a standard professional business like ‘group on’. I presume this hopelessly tiny team of simple, unskilled people have some kind of ‘deny all responsibility’ button somewhere next to their ‘argumentative’ button, which triggers when confronted with
    the daily complaints, false advertisements, and major errors all over this pathetic hazardous service, what can only be illegal and close to falling apart along with the rusty parts of the cross-wired, confused robots and their hopeless and limited knowledge, which include 3 pre-programmed scripts, which only have a repeat function.
    Seriously, I have never written a blog or in any forum, plus I’ve dealt with numerous poor company’s and been a tele rep myself once but this frustrating joke who claim they are mighty deals, should by now have the reputation of something more like ‘spiky ordeals’.
    If I could only summarise – don’t believe 80% of their products are in any way accurate! mighty deals ‘conceal’ and need to be revealed!!! If you have extreme patience or are probably owed money then these are the only reasons worth waiting on the approx 40min annoying call waiting guarantee the offer. They are committed to ensuring all agreements, such as to call you back, consider your refund, await 7-10 days for there pretend finance team look into your problem, etc are all but a couple of meaningless words to delay your problem and usually a refund putting them in a good position to keep your cheated money, with their 7 day deadline where customers are expected to have been offered a refund within this, tactical time limit, leaving most customers with no hope at all.

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