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Day 185: How evil, exactly, is Groupon?

Hey guys! So, today, I was going through my email inbox and getting rid of all the unread messages. In so doing, I noticed that a bunch of them were from email lists and I never read them. So then, I went on an "unsubscribe" spree, which was very fun (and informative - some companies make it literally impossible to unsubscribe).

See you later, unread email list messages! Sayanara! Adios!

So, I found that I used to get the email reminders from Groupon, SwarmJam, and WagJag (those half-price coupon places). I wrote about the whole Groupon thing awhile ago, and how my first adventures with them didn't work out so well (i.e. the lunch I bought cost the same I paid for the Groupon so I saved... no money at all, and in fact, bought a more expensive lunch than usual).

Should've just eaten my brown bag lunch with the other guys. Le sigh.

I've figured out that these sites are really not for me for a few reasons.

1) The deals are almost never for places that I go
2) I don't like lots of email clutter
3) I like to spend money and get something right away, I don't like to spend money for the idea of something in the future, kinda

And then I remembered that I've been meaning to talk about this article for awhile:
the unpleasant case of Posies Cafe Groupon kerfuffle. Go ahead, read it and then come back... You back? Yay! OK, I like how this article explains how Groupon works when it doesn't work, but also explains how they set up their deals.

Anyway, the whole Groupon thing seems like (along with extreme couponing) a way to encourage faux-frugality by letting people feel like they still get to buy lots of stuff. Like it's consumerizing frugality.

And don't get me wrong, I love buying lots of stuff. But, for me, learning to be frugal is about learning to buy less stuff, not to buy lots of discounted stuff. I think, again - just for me, that you need to kind of reprogram your brain to value frugal things and lots of consumerism and consumption does just the opposite.

This  makes me half want to plant a garden and half take a nap.
That guy looks kind of judgmental.

So, personally, I'm going to keep trying to save money the way that I'm most comfortable with - cutting down on expenses and using what I have.

How about you guys? Groupon yay or nay?


J Goreham-Penney said...

A bunch of people I know got their e-mail accounts hacked after they all bought the same Groupon, so I avoid that shit like the plague.

Daisy said...

I like sites LIKE groupon, but groupon itself has gone downhill and I haven't purchased one in awhile. But theyre great if you want to go out for dinner and it's too expensive and you want to try somewhere new, or if you want to do yoga you can always wait until theres a deal!

M said...

inmintcondition said...

This is such an enlightening post and link to the Posies Cafe's experience. "Consumerizing frugality" is a great way to put it, and these sites couldn't have come a better time during the Great Recession. I *almost* bought half-off tickets to a local go-cart venue, until I read the fine print -- only redeemable Monday thru Friday, between 9am-4pm. Huh? I'm working in the office during that time! So useless.

Ellstar said...

I've only benefited minimally from the groupons I've bought, they are generally more hassle than they are worth and are for places I wouldn't like to frequent other than through the discount. At least I've only wasted maybe 60$ over the past year, I know people who spent more in places that the groupon/wagjag/whatever actually SUNK the business and they lost whatever value they would have had in the offer. Groupon doesn't serve their businesses or customers, lose lose basically.

Donna Freedman said...

It depends. By picking and choosing I've gotten massages and other services at very good prices, and deep discounts that I use to take my sister out to lunch. Recently I had an hour-long session with an amazing photographer who gave me a CD full of the only photos of myself that I have *ever* liked. The cost was $50.
I've also seen social commerce deals for essentials such as glasses and teeth-cleaning/X-rays. Pick your spots and you could end up doing well.

Martina said...

Team buying is bad for business.

When you offer a $100 product or service for $50, Groupon (or whatever) gets 50% of your sale. So that leaves the business owner giving a 75%.

Take for example, that hair cut + pedicure you purchased for $50 worth $100. $25 goes to groupon.

Stylists and aestheticians get paid commission, usually around 50% of the service revenue. If you assume an equal split between the two services - hair cut for $25, pedicure for $25, the employees will only make $12.50 for the service provided to you. Assuming they both do their job in under an hour, if they take more than an hour, the salon owner has to pay them at least min.wage.

So from that $50 sale, $25 gets paid to the stylists. Leaving the salon own with $0 to pay for supplies, employee benefits, and overhead.

Plus, the salon becomes so busy with fulfilling the Groupon deal, regular customers can't get an appointment and go somewhere else where they can.

So the business is making no money on the transaction and the employees are barely making minimum wage in that example.

It's a horrible deal and works for very few business models. Not to mention, those looking for a deal rarely will become loyal customers.

Sorry for the rant, but so few people - including business owners - realize how bad these deals are for their business.

L-A said...

I'm undecided about the Groupon. You get this discount in your inbox and it seems exciting at first, but then I'm not so sure. I have used Groupon. But in two cases, they were for small, local businesses and I made sure I still spent more than the Groupon was worth. The Groupon saved me some money, but not much - but it was okay, because I was planning on going to the place anyway (like $20 off a meal that I had to celebrate my graduation).

It did, however, save me money on a hotel room. I got two nights for the price of one. Add to that some Groupon credits, it was totally worth it. But I'm inclined to think this isn't the norm - that it's not always a good deal for me or the retailer.

Annabelle said...

Wow, greats points, everyone. It seems like maybe the only situation where Groupon (and similar websites) really would be win/win for the users and the company would be larger companies who can afford to make so much less money. (And who have the resources not to lose their regular clients)

But it seems like so many of the businesses offering these deals are small businesses trying to make a name for themselves.

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