Groupon

by Harley

Remember how last month I blogged about doing a 9-day detox, because I had a coupon? Completely inaccurate. That was no coupon. That was a groupon.

Groupon. Before I knew the word, I thought of it as “the addiction that dares not speak its name.” But now that I know it for what it is, I must share my cautionary tale, and perhaps start a support group.

Groupon, for the uninitiated, is a company that began in Chicago in 2008, offering customers a half-price pizza. Last November, Google offered to buy it for 6 billion dollars. How could such growth happen?

I’m afraid I’m responsible.

Here’s how it works. Every day I check my e-mail and there, in my in-box, are 2 or 3 deal-a-day offers. I call them all Groupons, but I’m using the term generically. Mine are from local competitors, faux Groupons, all using the same principle. A business—say, a hairdresser, or piano tuner or Mongolian barbecue offers me a product or service at a spectacular discount. 75, 80, 90%—serious savings, the kind that turns a casual shopper into an obsessed nutjob. The catch is, I have 24 hours to click on the link and pay for it. The next day, that deal’s gone.

If I and a minimum number of fellow shoppers buy it, a certificate appears in my in-box. I print it out, and take it to the drycleaners, the yoga studio, the sushi bar, and hand it over. No money changes hands.

Plus which, my local “groupon” site gives a portion of the proceeds to my kids’ elementary school. I can get my air conditioner filter changed, and educate our young.

But here’s the rub. I was listening to NPR  last week and learned that the merchants offering these huge discounts—let’s say 80%—split their measly take with Groupon. Now, I’m no Warren Buffett, but if a merchant’s getting 10% of her usual fee, I’m guessing she's losing money on the deal. Still, it’s worth it to her if I become a lifelong customer and pay full price from now until the end of time.

Ah, but will I?

If it’s the piano tuner, yes. The drycleaner, no, because it’s not geographically convenient. Yoga studio, yes. Detox, no. (I regained the weight I lost within 7 minutes.) Laser hair removal, no, because there’s a finite amount of body hair I want to part with. It’s for this reason that you’re unlikely to find a Groupon for funeral services, wedding cakes, or vasectomies.

So now I feel morally obligated to skip any groupon service I can’t really commit to.

And that "one-night-stand" mentality is only one of the risks the merchant takes. Another is that Groupon clients forget to tip. Another is that too many customers sign up, and swamp a small business. On the buyer’s side, there are, tragically, expiration dates. I know because I was late by one week for a manicure/pedicure. The horror. The horror.

I am genetically predisposed to be a Groupon junkie. My Aunt Olga was a champion coupon clipper, hitting 3-4 stores a day to save 7 cents on a case of ketchup, whether or not she liked ketchup. I feel her spirit egging me on. True, I don’t really need a dog trainer that makes housecalls, but at least I have dogs. And what, you may ask, does a Man Friday do? I don’t know, but I’ll keep you posted, because I bought $120 worth of his services for $30. And four hypnotherapy sessions so cheap they were practically free. I can use them to cure me of my Groupon habit.

But not yet. Because I’m waiting for the big score, one of my Groupon dreams, at 90% off:

            Summer in the Italian Alps for one adult and 3 children

            A week at Canyon Ranch, for everyone at TLC

            A new boyfriend (or even an old one, in good condition)

            World Peace

Got a Groupon fantasy of your own?

Happy Monday!

~Harley

 

Comments

[mary alice at mystery lovers bookshop]

Harley is one smart chick!
When we looked into this phenom, we were amazed at the numbers! It is really insane as advertising goes but there is one born every minute who has no idea how to build a business.

I think I will let my fantasy machine put me to sleep and sweet dreams.

[Reine]

I wouldn't mind a leisurely trip up the coast to the Samoa Cookhouse and back. All my e-friends would be invited too, of course. Oh, and I'd need that van with the special controls and wheelchair lift, or retractable ramp with automatic door opener-closer thingie would work. Yes, tthat would be a groupon I'd go for.

[William]

Merchants are trying anything these days, aren't they? Even *I* can see the numbers don't work out for them, and my math skills are pathetic, to put it nicely.

I'd be very interested in seeing some valid numbers on the success rate of the merchants who offer this. Some real solid profit/loss kind of stuff.

[Reine]

Maybe they make their money by collecting the fees that people pay for the coupon, but never redeem. See, that would be me. Like with gift cards.

[Reine]

And it might not be a big money loss for a lot of businesses - you know, like putting another sweater in the dry cleaning machine just may not cost that much. Or if the hair stylist has a lot of free time for lack of customers, it could be a time suck to cut someone's hair but not cost hard cash. So in cases like that it might be worth it to try and gain a new customer.

[Kathy Reschini Sweeney]

I would like a Groupon for 4 straight hours of sleep.

Harley - the economics of these are terrible for merchants if they don't get repeat customers. On the other hand, a new business looking to build an e-mail list might find that a cost-benefit analysis of gathering the data any other way makes this a good choice.

I bought some last year but had problems - the services were impossible to schedule and when the time came, I really didn't feel like driving to a different neighborhood to get a manicure. So I quit doing it all together.

In related news, reality TV has hit a new low (for me) but maybe not for you, Harley - there is actually a show about coupon clippers. You know, the kind who end up leaving the grocery store with a cart full of stuff AND money back from the store. I have to wonder what their net hourly rate looks like.

[Nancy Martin]

Hey, you're doing a good deed for the economy every time you buy something. Go, USA! I get the Groupon email every day and do take the time to look just in case I feel patriotic. Today: $40 worth of cosmetics or whatnot from The Body Shop for $20. Salute the flag! Except.....I don't really need any stuff like that. LIkewise, I don't have room to store 24 rolls of paper towels, so I quit Sam's Club. I am just not an enthusiastic consumer these days.

But a TLC road trip to Canyon Ranch---we'd sell out that Groupon in no time, Harley!

[Laura K Curtis]

I have to say that Groupon (the real Groupon) has yet to offer me things I'd want at more than 50% off. Perhaps that's because I am 1)too lazy to travel far to get things I can get in my own town and 2)mostly interested in the restaurant offers anyway. The best Groupon deal I ever got was for Donors Choose. I can't figure that out at all...how does one get a coupon that doubles one's contribution to a charity? But I snatched it right up.

On the other hand, the site I love to hate is ideeli.com. Gorgeous clothes at ridiculous prices for only 24 hours. Thank god they rarely have clothes for big girls like me or I'd be broker than I already am! Every morning an email arrives with what they have that day, and I just have to look at everything. *sigh*

[Joshilyn Jackson]

Wait, WHAT? You got a groupon for DONORS CHOOSE? I would buy that.

I am on something like ideeli called ROUX la la or somesuch and I have to NOT GO THERE if they have Kate Spade purses. Nothing good will come of it. Except REALLY cute purses that are STILL too pricey even on that discount.

[Harley]

Laura, that's why I go with my local faux Groupon outfit -- I too am way too lazy to travel far afield. The drycleaner ($20 for $50 worth of drycleaning) actually required a map to find. But they were extremely nice and except for the expired (although not dead) manicurist, I've had no problems with any of the Groupon merchants.

The carpet cleaner almost wept with gratitude at having my business. Times must be really tough for small businesses.

Kathy, are you actually watching the coupon show? Has my Aunt Olga shown up on it?

[Karen in Ohio]

Our grad school, perennially poor, and getting-married-in-November daughter is a Grouponiac. She actually rounds up friends to join in with her on mani-pedi offers, etc., and that's how she found her Miami dentist. She was so enthusiastic about it that I joined, and got $50 worth of books for $25 at Barnes & Noble. But after that there was never another offer that interested me enough to click, so I quit. We don't eat out enough to try new restaurants in other neighborhoods, so it wasn't worth it.

A local fish shop has a sign warning "Groupon crooks" to stay away from him. Business has been tough for this guy, who has fresh fish flown in from both coasts and the Gulf, daily, and whose largest customers are restaurants. He's downsized the store, hired his kids instead of outside helpers, and basically done whatever he can to weather this economic firestorm. I can easily see how a couple days worth of no profits could sink him totally, and I completely sympathize.

For dining deals, I've used restaurant.com They have deals for every city in the US.

A TLC Canyon Ranch deal? I'm there! Especially since a four-day stay there is close to $4 grand.

[Harley]

FOUR GRAND? Okay, let's see: who's up for a TLC campout in the backyard? BYO sleeping bags.

I love the word "Grouponiac."

The fish guy has my total sympathy too, but how is Groupon crooked? Are they not upfront about the fact that you're trading profits for advertising and a (temporarily) expanded customer base? Clearly, it's not a good call at all for every business. And I'm curious too about the long-term benefits for the merchant.

[Maryann Mercer]

(Un)fortunately for me, I got curious about Groupon while out in Portland and signed up just to see what was out there...and now I get stuff that's a "DEAL" in Portland but can't change the locale to my home town. You would think that would be possible, right? Good thing about Groupon is that the coupon gets people into places like B&N and pedi-mani shops, but there's also the downside. Nefarious shoppers try to scan and copy their groupons to take advantage of retailers...I know. We've seen a couple.
Coupon clippers? Well, I cut out coupons too, but for things I would normally buy...and I don't buy in bulk. I mean Chuck and I would take a year or two to go through some of the stuff these women walk out of the store with (unless there's a clippers' 'black market' out there). Or we'd throw it out. Or hate it the first time we tried it and try to give the rest away. If you have hungry growing kids I suppose it's all right. Budgets are tight. I'd rather not have a freezer full of frozen bread or green beans (unless they're homemade or home grown). And I often like the store brands...and around here we don't see that many coupons for them. Still, Harley...my fantasy Groupon? A European Cruise (with stops at Copenhagen, Estonia, St. Petersburg, Istanbul, etc) on Royal Caribbean for less than $400 per person for an oceanview room...I'd go in a minute!

[Nancy Martin]

Maryann, I'll go on that cruise with you!

[Kaye Barley]

I'm lobbying for the TLC Canyon Ranch deal!

[Hank Phillippi Ryan]

Groupon always seemed to me like there was a big catch somewhere. I don't know what it is, but it just seems--wrong. Like a pyramid scheme of some kind. SO that's wrong?

I'm unable to resist when a shopping thing comes in my email.--so I just instantly delete it. If I don't it'll be like--maybe I do need all new dishtowels. The white ones, all tied up with a blue ribbon. Or, wait, colored spatulas! All different sizes.

So Imagine when I see the shoes and purses and scarves on sale. Yeesh. Someone sent me Rue La La, and I know I should just undo, but what if the best thing in the world is in the next email?

SO, I delete.

[Harley]

Okay, Hank and Joshilyn have both mentioned Rue La La and it sounds to me like an addiction waiting to happen. A very pricey one.

[Nancy Pickard]

Thanks, Harley! I've been so curious about Groupon. I tried a local version, but I only have so many hands and feet to 'cure.

I read an article recently--NYT?--that told sad stories of little restaurants, etc., losing their regular customers who came on Groupon days and gave up in disgust at the crowds of strangers who never came back.

Seems as if there could be a way to make it work, though, starting by more seriously limiting the number of groupons available.

Can we have a grouponanairplane to Paris?

[Margaret Maron]

If the week at Canyon Ranch doesn't work out, let's find a groupon for a private railway car and throw a rolling pajama party.

[Rachel Brady]

Harley, you crack me up. Particularly with the "old one in good condition" remark. Happy shopping.

[Nancy Pickard]

I like Margaret's idea!

[Laura (in PA)]

I get emails from a Groupon knock-off - Philly Dealio, or something? I don't think I've used any. My husband belongs to Groupon, and has used one for an oil change and one for 1/2 price tickets to an Antique show that my daughter and I used.

A TLC group deal would be awesome. And now I have to go check out Rue La La.

[Tracy in NC]

Yes, I get Groupon and have only done the deals on mani/pedi services and dry cleaning. All the other "deals" are not something I would normally buy, and I'm the same way with coupons. I only cut out what I need, despite the constant bombardment of friends and emails offering to show me how I can get $100 of groceries for $3.

My son and his friends at college have their own Groupon...its called dumpster diving. They even have a detailed map (with locations and best times)explaining when the doughnut shop throws out bunches of doughnuts, the organic grocery tosses vegetables, etc., all wrapped in plastic bags ready for them to pick out of the dumpsters. Plus he has classmates at several local groceries and restaurants who text when good stuff gets tossed. It sounded horrifying at first, but my son claims the food is actually sorta fresh and wrapped up tightly. They gather it and have huge potlucks on weekends. Somehow they convince others to bring meat dishes and beer while he and his housemates provide veggie dishes, rice and doughnuts. In the fall they pilfer apples from a local meadow and bake pies. He claims he has learned to cook a zillion veggie dishes using this method and has promised never to call me again at 1 a.m. demanding my veggie pasta salad recipe.

My dream Groupon would be one for college. With a son majoring in Classics (minoring in Latin and Ancient Greek), spending next year in Europe as an exchange student and planning on grad school, I need education coupons! Anyone know if Groupon is in Europe yet, so my son can get deals over there beginning this fall? With the dollar declining, we're gonna need it!

[Cornelia Read]

I like Margaret's idea, too. Or Canyon Ranch.

Groupon could make huge money on wedding cakes with most of the people in my family. My mother keeps threatening to start Marriage Anonymous. "That way," she says, "when I feel a wedding coming on, I could call a friend and have them talk me out of it."

[Karen in Ohio]

Harley, I think the "crooks" in question are people trying to scam using the coupons.

I was once the coupon queen, especially when I had a family of five to feed, including a voracious husband, a teenager, a toddler, and a baby needing both formula and diapers. Two shopping trips to two different stores a month, sometimes saving as much as $100+ on a $300 bill. But I never bought things just to say I "saved" money using the coupon.

A Facebook friend who grew up next-door to us posts her "deals" all the time, but if you look at them carefully it's mostly junk food. Stores rarely post half-off or BOGO coupons for fresh produce or meats, and that's mostly what I buy nowadays. I don't even buy cleaning products, since I've gone to using white vinegar ($2.50 for 1 1/2 gallons) and baking soda ($2.75 for 11 pounds) for almost all my cleaning. That's better than coupons, anyway.

Margaret is onto something. That train trip idea sounds like a blast.

[Laura (in PA)]

I'm totally on board with the train idea. :)

[marie]

Harley, I love this blog today.
Couponing is elusive to me. I frequent the same grocery store and use their reward card and get their rewards in the mail.
The frustrating deals are those attached to craft stores which promise you a discount on "certain" dates. I invariably arrive with the trusty coupon only to be rejected by the clerk alerting me that
1. It's not Tuesday
2. I did not buy the super duper frame for that picture I bought yesterday.
3. When I return I only get the big discount on the
most pricey item.

4. I must return on Tuesday between the hours of 9AM
and 10AM
5. It must be cloudy with a chance of showers.

The other merchant feature that amazes me is that a major department store has a preview event where if you see something that you like you cannot purchase it until the NEXT day at the sale price. That drives me bonkers.

[Harley]

Yes, Marie, I know, and I feel your pain. I have a niece who was born with the Coupon gene. Everything you describe as hell is her kind of challenge, like a crossword puzzle. And when she was 15, I took her to Europe, along with her sister and 2 cousins, and she beat us all at finding the bank with the best exchange rate.

I also LOVE the idea of education Groupons, Tracy. I'm not talking karate class or yoga, either. I'm talking hardcore college credits.

[Debby]

Hmmm... a local radio station has been doing 'dinner deals' for years. Get a $50 gift certificate for only $25. Only on Fridays, and a different one each week. Have really enjoyed them, and also liked having spares for last minute gifts.

Luckily, I have always remembered to tip based on the actual cost of the meal, not the final cost to me. Which was kind of funny the other week, as my best friend and I used her coupon and got a $130 meal for her original $40 payment, and my covering the tip total. Whew.

For now, I will only do restaurants. It seems safer to my bank account that way.

[marie]

This actually happened this weekend.
DH took his 25% coupon to a hardware store where he picked up a twenty dollar electronic gauge.
The checkout clerk asked if he wanted a warranty on the item.
My husband declined because the warranty would probably negate the discount.
The clerk informed him that the store policy involved a thirty day return policy on the gauge.
If it breaks after that with no warranty you are out of luck.
Was the gauge worth it? Maybe if it is handled gingerly after thirty days we may have a winner.

[Harley]

Even though I do not know what an electronic gauge is, or what it does, I am praying for its health and longevity, Marie.

[marie]

Me too, Harley.
Tech terms and buzzwords keep our romance alive.
I sometimes even feign interest as I peruse the hardware store aisles.
If I am really good I get to go the craft store.

[lil Gluckstern]

The train, the train...

[Alan P.]

The first time I saw an email from Groupon I thought it was a sham, but it is not. I have purchased several, one this past Saturday. You do need to read the fine print, the merchants are sticklers on it. I have also found the ones that I have used to be very easy to use. My mother needed some help with their website and their phone help was fast, pleasant and most importantly, right!

I have not tried any of the knock offs.

When I was newly married, DW gave me a stack of coupons. I went to the store and used them all. Including the ones for stuff we had never bought. After spending an extra $50 to save about $8, I got home and she asked, "Why did you buy this?" "You gave me the coupon." Silly me, she just likes cutting things out of the ads.

[Alan P.]

I am with Karen, a look at my shopping cart these days will tell you I need coupons for apples, bananas, spinach, carrots and cabbage. No such luck in St. Louis, either.

[Carol R]

I love Margaret's train idea, but until science catches up with fiction so that I could be transformed into a fly on the wall there is just no way I could meet so many people at one time.

[Karen in Ohio]

Carol R, but we already know one another, my dear. You would be surrounded by longtime friends.

[Kerry]

I thought Groupon was intriguing until I saw its Superbowl ads. Call me a whiny liberal, but I didn't see anything particularly amusing in the faux public service announcements about serious issues that deserve serious attention. So I won't be messing with them.

We do have some local versions, but I've never been able to figure them out :( My husband, who does the grocery shopping, used coupons extensively when we lived in WV where the local grocery stores regularly had double-coupon days. Now he goes for the "buy one, get one", which saves us a few pennies here and there.

I'm ready for the TLC getaway, whether it be road trip, spa, or backyard campout!

[mary alice at mystery lovers bookshop]

I keep wondering about the 753 people who bought the $25 for $50 in books from Joseph Beth here three weeks before they closed.....now there's a crime.

[Reine]

Carol R, I'm with you on meeting so many people all at once, but really I do love the train idea. Where would we go? I want to go someplace where ski pajamas work well. I have a groupon for sit-down bi-skis, with lessons, at Mammoth. We could could rent a condo on the mountain... really nice!

Marie,
"4. I must return on Tuesday between the hours of 9AM
and 10AM
5. It must be cloudy with a chance of showers."
HAHAHAHAAHAHAAAAAAAAAAAAA!!!!

[Carol R]

Karen in Ohio,{{{Hugs}}}

[Deb]

You have educated me today, as I have never heard of Groupon! Of course, I am such a reluctant shopper that I shop for food only because it is necessary to life,and shop for clothing only when what is currently in my closet becomes too raggedy to donate to Goodwill or to be worn in public.

I mostly buy store brands, and so I rarely have use for manufacturers coupons, but I do take advantage of discounts for "frequent shoppers" at my store.

Because I love to travel by train, I really like Margaret's idea! (Indeed, I took a train a few days ago to visit the relatives I am with at the moment - and whose computer is driving me crazy, so please do forgive the typos!) If you do find a train Groupon, let me know! I will go just about anywhere! I like to fly, too, for that matter, so everybody please keep your eyes peeled for air travel coupons!

I'd also appreciate deep discounts for the laundromat, car insurance, utilities -- oh, I could go on and on and on...

[Karen in Ohio]

The cool thing about train travel is that people who are afraid to fly will love it, and people like me who get seasick will also love it.

When and where should we go? :-)

[Tracy in NC]

Karen, I am intrigued....where are you getting 11 pounds of baking soda for $2.75? I just paid .99 for one pound, as it makes a terrific bathtub cleaner. You must live near an Arm & Hammer plant or something. Inform us, please.

[Karen in Ohio]

Tracy: Costco.

It might be slightly more than that; I'm going by my (admittedly) faulty memory. It comes in a heavyweight recloseable plastic bag, too.

[Laraine]

Harley: count me in for train, Canyon Ranch or backyard camp-out with TLC!
I've thought about doing some of the local Groupon type stuff, but am dissuaded by the results a friend had in a similar experience:
A local morning TV show asked her to come on the show and discuss her profession. She thought, 'oh, a way to attract new customers!', went on the show and did a good job. Her office phone began ringing off the hook; probably in excess of 300 calls the first few days alone. She had a small office and no one to answer the phone, so it went to voice mail when she was with clients; she couldn't accomodate all the new callers within even six to eight weeks and nobody wanted to wait . . . after a short burst of almost hysterical activity, she was back to same-old, same-old, except now there were 300 or more unhappy folks out there who would never try her services again.
Sigh. A friend used to warn me that winning the lottery could cause big problems by all that money trying to cram its way into your life at once: I think I grasp a little of what they meant, through Groupon lenses.

[gaylin in vancouver]

Yeah, coupons don't work very well in a house of one, a 700 sq ft apartment that is. I also use the baking soda, generic lemon juice cleaning method and can only store 2 rolls of paper towel at a time. Food allergies make most coupons non-usable for me, I don't eat bread, processed cereal, baked goods etc. Now if someone could get me coupons for red pepper, house insurance and quinoa that would be terrific.
My natural grocer's has a member card, I get all the sales discounts and it adds up points, 2,000 points = $20 free groceries and I get $20 free every 2 months or so. Good enough for me.
I did use a manicure coupon provided by a friend and went with her, it was a horrible experience, I guess they didn't profit much from this deal and took it out on our hands.

[mary lynn reed]

Margaret...I got a Groupon offer this morning for a sailboat excursion for 4 friends and myself. It's not a train, and only lasts a couple of hours, but maybe we can get that train yet. Actually, some of the resort deals are pretty good.

We got an annual membership to LACMA for half off. (Los Angeles County Museum of Art) I consider that my great score, but we've also snagged a dozen cupcakes, a purchase at Shoebacca.com, and a couple of dinner things. I keep checking out the housecleaning ones, but no one has been in my address range yet. I am sorry I didn't buy the window washing last week.

[Harley]

Window-washing!? Man, I could've used that one. I wonder if my Man Friday groupon guy does windows?

I am all for this train idea. But we need a mathematician (or perhaps Marie's husband?) to figure out the geographic midpoint for all of us at TLC. I'm thinking it's going to be . . . Omaha.

In other news, my 5th grader just announced she needs a protractor for her homework and she needs it NOW. Talk about an item that I haven't seen for 40 years. I've knocked on the neighbors' doors, but even the ones with high school kids have no protractors. Do any of you own one? Extra points if you recall what it's for.

[Harley]

Oh: and Mary Alice, I'm shocked at that Joseph-Beth deal.

[Karen in Ohio]

We have one somewhere. Three math nerd kids. And I have one I used when I was in kitchen design, lo, these many years ago.

Staples, Harley, in the drafting section of the store. Or OfficeMax, or Office Depot. Good luck!

[marie]

Do not hate me because I am a google freak but here is a site where you can pring a protractor.

http://www.ossmann.com/protractor/

[mary lynn reed]

We have a couple of protractors, Harley, I use them for patternmaking. Gotta keep the dangle of the angle precise.

You can buy one at the drug or grocery store. Probably packaged with a ruler and a compass (the draw-a-circle kind)

Do you really want us to run one up your way?

[mary lynn reed]

You can get them at Office Depot, etc. in the drafting tools area, Michael's in the drawing supplies. Almost any art supply will have them.

[Harley]

Yup. Found one at Rite-Aid, along with some half-price Easter candy. No need for a Groupon there.

[Storyteller Mary]

Enjoy the Easter candy! . . . and have fun measuring angles with that protractor.
I vote for the party train -- I was just thinking about how much fun we had on the Alaska RR to Denali Park!

[Harley]

Storyteller Mary -- isn't Denali Park something else? I got to take a helicopter into a glacier. Hair-raising, but I'll never forget it.

[Reine]

Protractors bring back bad memories... ick.

[Judy Alter]

I've had some terrific meals at restaurants I normally can't afford, courtesy Groupon. I don't use it much but an occasional offer is too good to resists--like this week a discount at Coldwater Creek where I can go with a clear conscience, because I shop there anyway.