Groupon

Sep 14, 2011 by

Groupon

Daily deals website Groupon has been exploding in publicity and growth in recent months. If you’re not sure what Groupon is, I don’t blame you – it’s a relatively new concept so let me explain.

Groupon is deals website that offers 50%+ off stuff to do, see, eat, and buy in your city.

They’ll send you an email everyday with their latest deals and discounts. If a minimum number of people buy that discount the deal is on and you’ll be charged for purchasing whatever it is you selected.

You can then go and (hopefully) enjoy the shiny new product or service.

If the group deal doesn’t get the minimum number of people (unlikely), you’ll get your money back. Simple, huh?

 

“Sounds Cool – But Can Groupon Be Trusted? Is It A Scam?”

Groupon is not a scam and they can be trusted.

That’s how they’ve managed to build a $25 billion dollar business. However, Groupon does have distinct pros and cons which should be considered before you spend your money.

I like to criticize first so lets start with the cons :)

 

“What’s Bad About Groupon?”

Several people have talked about how businesses get a raw deal with Groupon but for this post, I’m looking at it from the point of view of an average consumer. That’s because the pros and cons of Groupon for a business are totally different and that requires a post of its own.

So here’s the word on the streets from those that hate Groupon:

  • “They can’t book me in for months!”

Groupon has the power to drive hundreds or even thousands of people to a business. As a result, some users have complained of businesses not being able to book them in for whatever it is they ordered for several months.

The way to overcome this? Phone the business while the deal is running and ask them to give you an estimate on when they’ll be able to book you in bearing in mind how many Groupons have been sold. Also, if at all possible, try and estimate it for yourself. If the deal is running at your local spa which only has one treatment room and 1,000 Groupons have sold, you can be pretty sure that you’re not going to be pampered for a while.

  • “The service was crap!”

Another consequence of a business experiencing a rush in demand is that the quality of service may, and sometimes does, fall into the depths of crap. As staff desperately try to match demand they can forgo the common pleasantries and take a conveyer belt approach. Low, zero or even a negative profit margin is also a cause of poor service.

You should check out reviews on the business beforehand to get an understanding of the level of service they typically provide – that should help give you a rough indicator of what to expect.

  • “The product terms weren’t clear!”

There have been a few cases of Groupon not making the product or service terms crystal clear.  For example, they may advertise a camera with a case in the background but forget to mention that the case isn’t included.

To prevent an unpleasant surprise, check out the Groupon seller’s website as the chances are that they’ll have more specific terms, e.g. case not included, on their site.

  • “I’m not sure I got such a good deal after-all!”

Trying something that you’ve never had experience with or any idea on how much it should cost in the first place is a bad idea. See if that laser teeth whitening treatment is actually good value by comparing it against it’s competitors. Although unlikely, the price may have been slashed from a sky-high price.

  • “I’m spending money on things I don’t need!”

Some of us find it harder to control our spending than others. For those that love splashing out, Groupon can be dangerous. It’s hard to say no to a 75% off a new 3d TV that you don’t really need. If you’re prone to impulse spending, it’s simply best to avoid Groupon in the first place.

 

“What’s Awesome About Groupon?”

Groupon wouldn’t have grown to be the massive beast it is unless it had some awesome qualities. Here they are:

  • “I get amazing discounts!”

It’s not often that we get 50%+ off stuff to do, eat and see in our city – a bargain hunters paradise!

  • “I get to try out cool products and services!”

The huge discounts on offer mean that you can often try out new things that may have been out of your reach.

  • “Their refunds policy is great!”

Groupon are known to have a great refund policy if a product or service lets you down and many people have successfully claimed it with minimal hassle. That’s reassuring.

 

The Verdict:

Groupon is legit and if you’re going to use it, you should take note of the cons mentioned above and the ways to get around them. If you do, Groupon can be a really valuable and enjoyable service.

Groupon scores high on the legitimacy chart because of it’s great discounts and refund policy that has been tried and tested by many users:

Groupon Scam

You can register for Groupon email updates (free) here. Also, remember to check out our deals & discounts page for information on other legit services that can save you a ton of money.

Have you had experience with Groupon? Positive or negative, leave your comments below.

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8 Comments

  1. I don’t think Groupon is a scam per say for the users. However, for investors, I would advise caution. They have yet to turn a profit and I think they mismanage their money. The things that you describe are mainly issues with the end business rather than Groupon which acts solely as the intermediary.

    • Sandip

      Hi Richard, thanks for stopping by. The issues I mention affect the consumer as opposed to the end business. The most common end business complaint is regarding the large discounts that are enforced. One the other side of that, that’s exactly Groupon’s selling point.

      Regarding Groupon from an investment standpoint, their costs have been mammoth – advertising on prime time TV does take its toll. Although this is a common characteristic of many companies in the growth phase, something which Groupon is definitely still in.

      I personally think Groupon would make a fairly good investment. It’s growth has been stellar, it’s the market leader, there is still room for expansion and it’s a cash rich business. Although please don’t take that as investment advice! :)

  2. Groupon and their teeth whiting service is is actually really great! So No, they are no scam.

  3. Foster

    I have purchased several items from Groupon. I am having a 50% success rate. One item I bought from a company called extremeflyers. They are out of the UK. It has now been over 40 days and I have not revceived the item. Groupon will not respond nor will the company. And yet Groupon has my money and will not honor the so called pinky promise. Groupon keeps 50% of the sale price. That means the so called coupons are marked up 100% to account for the split in revenue. So you are not getting a deal on anything. For that reason – SCAM.

  4. Kim

    Yes, they’re a scam. Bought Botox as a gift that didn’t work and Groupon will only give me a gift card for this bad experience! They sold bad botox and won’t refund your money.

  5. SCAM! SCAM! SCAM! SCAM! 1 second ago

    Groupon are a scam!! They are offering IPL laser hair removalyesterday and today the same deal, 6 sessions for £99 instead of £350, thats £251 saving 72% discount. WRONG!!! I could have got this deal even if Groupon didn’t offer this on their site and sometime ago and even TODAY!

    Having researched the company, EUROLASE, offering it, I came across a GUMTREE AD, from EUROLASE offering the same!! So how on earth can Groupon say they are giving us the customer a discount when there’s no discount there????? It’s a scam!!!!! I even called the company and some woman who can’t even speak clear and concise english was happy to offer me the deal on Gumtree!!!! Groupon are not saving us money with back street companies like EUROLASE!!!!!!!! Why would any company post an AD on Gumtree unless its a back street one?!?!? This has definitely opened my eyes and I will definitely be doing my research before I buy any offers!!!

    Oh and 1 last thing this same company offered the same deal Groupon has at the moment for £59 with KGB last week, Yet AGAIN it wasn’t a 80% or 90% discount they were saying because I could have got it for £99!!!! They are all scammers!!!!!!

  6. GROUPON IS A SCAM.
    MY EXPERIENCE WITH GROUPON GOODSS:
    FIRST COUPLE TRANSACTIONS WERE SUCCESSFUL.
    I MANY I HAVE PURCHASED AFTER THAT ARE NOT LEGIT!!!!!!!!!!!!
    I HAVE EMAIL RECORDS, COMMUNICATIONS WITH THESE ‘FAKE COMPANIES’, AND WANT TO DO SOMETHING ABOUT IT!
    THEY ARE RIPPING PEOPLE OFF!!! THESE $15 – $50 DEALS REALLY ADD UP WHEN THEY ARE FAKE. I WANT MY MONEY BACK. THESE COMPANIES THESE GOODS ARE SOLD FROM WONT ANSWER EMAILS, THEIR PHONES, NOTHING!!!!!!
    IF I HAVE 14 DAYS TO RETURN A PRODUCT AND NO ADDRESS TO RETURN IT TO — NOT FAIR AT ALL!

  7. Bought a ride/drive package from try it racing and it turned out to have hidden fee’s faulty cars and bad service people. Don’t try it racing they are the spirit airlines of nascar

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