I Hate Groupon

Groupon

Talk to anyone who runs a small business; a cafe, a boutique, a pet groomer’s. Speak with anybody who offers a service; pilates, eye exams, custom framing, teeth whitening, a booze cruise. Gather all of these people in the same place and I promise you one word, and one word alone, will inspire the most exhaustive of collective groans:

Groupon.

I remember when Groupon first started. It was a cute little service that would email you daily deals and if enough people bought them, the deal was on! Yay! You could then take a boot camp class or get a massage or even have a dental exam for a considerable discount. I thought this was pretty cool, especially since I’ve never had dental insurance. What a great idea!

Cut to five years later where Groupon is essentially like the mafia, with its underlings calling around to local shops and making them offers they can’t refuse. Literally. They can’t refuse them, because for many stores, if you’re not dealing with Groupon, you’re not doing business.

The industry I work for, is one in particular, that has been continuously bent over and made Groupon’s personal bitch. Laser hair removal is a service that used to be, and should be, quite expensive. Why? Because the lasers that we use to remove hair run upwards of one hundred thousand dollars and require regular maintenance which can prove quite costly. Yet so many laser centers have issued deals through Groupon that it’s impossible for any others to sell at full price. So now everyone has to offer a deal.

The bigger problem though, is that Groupon doesn’t give a shit about your business. They want to make money (duh) and they want their clients, the consumers, to be happy, so they negotiate the biggest savings possible with the vendors, strongly discourage caps on sales and then take fifty percent, plus credit card fees, from whatever ridiculously reduced rate a company was made to offer their services at. So what business owners are left with is very little money, yet thousands of new customers who all want to be treated like they paid full price.

This is the part that sucks for the employees. Clients rarely take into consideration that the only reason they were able to purchase a laser session for a fraction of what it would normally cost, is because an insane amount of other people bought them too. There is no way customer service isn’t going to suffer. But try telling them that. Clients will complain when they can’t get through on the phone to make an appointment. They will throw fits if they aren’t treated at exactly the time they were confirmed for. If a laser breaks down, which they do quite often because they aren’t equipped to handle the kind of volume beset upon them, clients bug out over being rescheduled. Often, they will ask for more than their coupon includes and on top of that, they rarely tip appropriately (if at all) even when things do go smoothly.

So why do it?

Business owners will take the initial hit in the hopes that customers will stay past the time their vouchers expire and become loyal patrons. However, they rarely do. Groupon shoppers are bargain hunters. As soon as they’ve used up their treatments at one place, they simply move on to another.

But what about the flip side? Doesn’t Groupon make certain things available to people who wouldn’t otherwise be able to afford them? Yes. But to be honest even being a Groupon customer kind of sucks. The couple of times I’ve purchased their coupons I was met with muted hostility and frustration from the employees collecting them. Once was at a kickboxing studio. I purchased five sessions for the price of one. The first class was great but afterwards the instructor sat me and my friend down and tried to sell us a package of thirty more, for six hundred dollars. When we weren’t ready to hand over our credit cards, he became irritated with us and declined to even make eye contact when we said goodbye on our way out. I felt so uncomfortable, I never went back for the remaining four classes.

Another time I bought a number of Groupons for a weekend getaway in the woods with a few of my girlfriends. There was a mix-up with our cabin and we had to produce one of the coupons to prove that we all belonged there, even though we had already redeemed them over the phone, six weeks prior. When we couldn’t do it on the spot, they threatened to kick one of us out and put a stranger in. The whole time we were trying to get the issue sorted, the guy working behind the main desk was so overwhelmed with the constant confusion caused by the website that he kept shaking his head and saying “God, I hate Groupon.”

It’s gotten to the point where even walking into a place with a Groupon is awkward for me. I feel like I’m saying to the store owner “Hey, I’ve got this piece of paper here that says I’m going to suck. You think you can you help me out?” Seriously, is anyone is ever really happy to see a Groupon customer?

Yet it seems as though the deal site has become a necessary evil. Businesses have to opt in or risk going under, even if it’s completely lowered the standard of quality and care. In a way, I almost think it can’t last. Prices continue to be slashed at a more and more unsustainable rate, making it close to impossible to keep ahead of demand.

So I guess for the time being, I’ll have to ride out the waves of domineering deal seekers. However, one glimmer of hope remains. Sooner or later, with the competetion killing one another and services tapping out, it seems inevitable that the Groupon bubble will burst.

  • Señor Blanco

    I think calling out the “bubble” in this business cycle is right on.

    • Sorry

      Merchants beware !!!

      I commented below but I want to add that small business owners are more vulnerable than ever now.
      I watched a court show where a coupon customer sued a small business owner for books he wasn’t able to buy because the guy went out of business. That is why he did the deal in the first place, last ditch effort. Well long story short, the judge told the customer to go sue the daily deal company because the vendor never got the money from them.
      It is bad enough that we deal with all kind of cheap personalities who do not tip, who run late and do not call, who don’t show and expect to reschedule like our time is not important. Who complain and have these dealers calling us, who bad mouth us online, etc..
      This is the worst business decision I ever made and I never want to see this class of people in my doors again.
      These bottom feeders wonder why merchants are not happy to have them in the door ? They do not understand this concept and do not appreciate the merchants. I did not need to do this deal, My business is fine but it sounded good at the time, why not get more people in the door ? I will tell you why ! 99% will never return, they will not spend a dime more, they will not tip your employees. They have no respect. I never once in 17 years had a bad review online. NEVER. Now these cheap creeps cannot wait to complain to the world. I read in these comments from these bottom feeders that they don’t tip when the service is not up to their standard and that is crap !
      I have had clients for 17 years coming in, paying full price and tipping on that or more. You got the same service. So just go away, mad or otherwise.

    • Mrs S

      I just purchased a deal and called and they are on vacation !
      This seems so wrong. I sent email for refund see what happens.
      Why would anyone do this ? They must have known they were going on vacation or maybe they decided they don’t want to do this now ???

  • Señor Blanco

    I think calling out the “bubble” in this business cycle is right on, because…
    A bubble in the business cycle can occur when value has seemingly accelerated without the risk being properly considered (perceived value error and actual fault usually shared by many). Here the value increase happens when a business has a rush of new customer appointments and a check from Groupon, the customer has a great deal on a service ,and Groupon has made money. Without consideration of the risk or cost as it were, It seems like a win-win-win.
    A bubble continues when it has mechanism in place to feed itself. A business has to join Groupon to compete. A customer only finds the best deal on Groupon. Groupon keeps doing what it’s doing cause their bright idea is making money.(who can blame them? it depends if they knew the results.)
    A bubble grows ever larger when a problem the bubble has caused is solved by feeding the bubble. In this case, when a customer is compelled to not buy larger packages at the site because they can get a better deal back on Groupon. And the business who only got on Groupon to bring in customers to sell larger packages can’t sell any packages sells more Groupons to get some money in the bank. Groupon is more than happy to keep making money.
    A bubble is about to burst when it can’t sustain it self. When does that happen? Well, when the overriding result, in this case a new price norm is reconciled to the thing not considered, as you are saying, it takes a certain amount of time and expertise to perform whatever service, and that costs money. Turns out it costs more than the new price norm. The needle as always hits when someone can’t write a check. Pop.

    P.S.
    I think the market in many of these services that Groupon has “helped” were probably in need of adjustment to over saturation.

    I predict Groupon will eventually fail because the perceived value will adjust to the price and people will eventually be getting a $7 perm when they pay for a $7 perm, and hell the business only gets $3.50. Groupon is it’s own demise, (in it’s current model at least) But the Groupon individuals make it out rich. The small business people and service professionals all have to be broke, start over from scratch and build the industries again.

  • Lorraine

    Ugh…this is the article I wake up to? FUCK GROUPON!
    Their stock is doing poorly..it’s just a waiting game now. I say we throw a party the day it happens. I’m thinking Champagne and confetti.
    Well done Kelly!

    • Kelly

      I’m ready when you are. I just hope we can afford it.

  • Little J

    I can’t wait until it ends. When it does I bought this deal to go on vacation I just hope it doesn’t expire by then!

  • Gabriele

    Well…I at least had the opportunity of my daughter taking advantage of Groupon to treat me to a mother/daughter day at the Trump Spa. It was great! They served me fresh water with my massages (oooo…). Somehow, though, I don’t think the Trump Spa was suffering like some of the other businesses that you mentioned as a result of that coupon. Great point. It sounds like IT IS ONLY BENEFITING GROUPON. A good reason to Boycott it in the future. Thanks for enlightening us as I had signed up for it more that once. Never used it…but wanted to.

    • Kelly

      Maaaahhhm! You just sold me out! OK, I suppose I forgot about that Groupon purchase. And it was pretty nice actually. To be honest I was shocked when I saw that the Trump Soho was peddling on a deal site but hey, whatever works right? Wait. I mean NO! Down with Groupon!

  • DQ

    Then there’s those of us who purchase the Groupon and don’t use it – like that all inclusive weekend getaway for 2 in the Carribean for $149. Turns out all the hotel options were barely two stars and the reviews were riddled with complaints about rambunctious locals. I opted to lose my money over the possibility of getting mugged and/or raped in Mexico.

  • el pedro

    I use groupon to find vendors that are trying to get new business. I call the business up when they have a groupon and say “hey, i see you have a groupon out, and I know groupon gouges you on the price, if I come right in what type of deal can we strike?” It has consistently worked to my advantage, although i am sure the business has agreed with groupon to NOT do this, so you gotta make sure they dont think you are a groupon-narc.

    thans to groupon i was able to learn what a sacrum was, initially i thought it was the taint, but alas it is the small of your back, thank you groupon youve taught me something.

    • Kelly

      I don’t think businesses have to agree not to do that at all. Groupon can’t dictate how they want to sell outside of their agreement. and honestly, I wouldn’t mind giving someone who called a price that I advertised on Groupon because at least then I wouldn’t have to split it. I’ve never heard of the sacrum. Unfortunately, due to the nature of my job, I am faced with the other at least twenty times a day. Thanks Groupon!

      • el pedro

        Groupon convinces the vendor to offer the service at %50 of what they usually charge to attract new customers who will repeat and refer. Groupon typically keeps %50 of the purchase price of the groupon so the vendor effectively gets %25. If the vendor goes around groupon who they contract with then they are taking advantage of “groupons large and diverse mailing list of ……blah blah….20-45 year olds…blah….statistic….average a purchase of 2 groupons a blahh blah” client base and since they set up the email offering a groupon you would be violating the contract by taking direct payments from customers. This is the way thrillist and gilt city work as well. Think about it, if groupon didn’t have this contractual obligation in place they wouldn’t exist. Or as a business model groupon would be as effective as the coupons in the yellow pages.

        • Kelly

          Never thought of it that way. That makes sense. I wonder, are they actually able to police that though? Or is it that if they happen to find a company taking money from would be Grouponers they cease doing business with that company in the future. Either way, if I were an owner, I would happily take an offer from a client who called my place directly and offered me what we advertised on Groupon. I wonder if Groupon has spotters. Like employees who call posing as consumers trying to do exactly that to then weed out the businesses that are cheating the system. Agghh! I hate Groupon!

    • Emily

      I like your thinking. I have had a couple of people call me and ask same and we honored those requests. Why give any daily deal company my money when I can do it at half price instead of a quarter ?
      I am also giving half price deals to my regulars who bring in their friends, family, co-workers, etc..
      Small business owners take your power back from these greedy corporations ! Beat them at their own game and do your own deals !

      • Cindy

        I doubt they have enough employees to police business’ but the way around it is to do same deal after expires and also do deal on your own. Give your clients deal when they bring new customers in. Put it out on flyers. I would be happy to take people who call for half price rate rather than getting 25 %. Actually less since these companies take out credit card fees too. More like 22 %. Business’ need to wake up and STOP working with these vultures. There is no way to make money doing it, only hope would be repeat business which does NOT happen. So it needs to end and needs to end soon. Unfortunately I still get the emails daily and business’ are still doing deals. I still get them not because I will purchase but because I am watching to see who is doing it and how many they sell, etc..
        I know from experience they will not do it again. I have not met one happy merchant and hear from more and more unhappy customers . Unhappy merchants plus unhappy customers do not add up to profit for the daily deal makers.

  • Michelle

    A groupon that takes you out to the woods, only you would find that one. This must have been the trip that the Whooty girl dance was first performed live.

    • Kelly

      Good eye Michelle.

  • http://www.awashwithwonder.com Shannon

    I’ve never really thought of groupon in this way, but it makes sense. Also, because they work with SO many companies, I think consumers have the idea that the companies are good. I bought a deal for a wax, and after having an extremely weird conversation with the receptionist (she didn’t even ask for my name when I made an appointment), I decided to google the company. They didn’t have a website, and the two reviews I could find said it was located in a really sketchy area, possibly INSIDE a mechanics, and that the service was horrifying. I didn’t go and decided I’d rather just pay full price.

  • Kelly

    There are essentially Groupon businesses that are popping up now that derive all of their traffic from deal sites. They often buy used machines which aren’t maintained properly and hire unqualified techs in an effort to manage the overwhelming flow of customers they have due to their coupon deals. It’s truly killing the spa industry. No one buys at full price anymore. They bounce from place to place seeking deals and leaving the good spas with no revenue to keep afloat. So the shitty places prevail. They churn out two hundred clients a day and tech are usually so exhausted they do an awful job just to keep everyone moving through as quickly as possible. So the experience you had is unfortunately becoming more and more common. I’m glad you opted to pay full price. The more people who do this, the better the quality of service will be.

    • Katie

      I agree. As a vendor I gave the same service as I have done for many years. I expected the same kind of clients I had for many years. Did not happen. There is something about these customers that they really are a different breed of client. I agree with all the vendors. They do not return nor tip well if at all. There is nothing wrong with getting anything at half price but don’t tip half price which 99 % of them do. I think the more people spend the more they value whatever the service is. The more they respect you. This age of couponing, especially in this economy is disheartening. The customers are spending what they normally would not, they need to be saving since the future is uncertain and the vendors are giving away their product or service at a ridiculous rate that they cannot make any profit. The more I hear the more I see that the vendors are unhappy with the customers, the customers are unhappy with the vendors and the only ones coming out ahead are Groupon, Living Social and all their competitors.
      How has it lasted so long ???

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  • Steve

    You had me until your comment about getting a tip at a hair removal salon or wherever you work. A tip? Honestly?

    You. Must. Be. Joking.

    Do your job well and your tip is my word of mouth and repeat business.

    • Kelly

      Tipping is customary in the spa industry, which is one of the reasons I got into it. Perhaps your offer of spreading the word about my good services would do me well in other countries where gratuities are not the norm but unfortunately, due to Groupon, I already have way more business than I can handle so you really wouldn’t be doing me any favors. Especially if the people you referred to me were anything like you. I’m not interested in your repeat business if you don’t tip me. At that point you are simply a waste of my time. I would prefer to give your slot to someone who is familiar with the traditional way we do business in the beauty world. Thanks for stopping by though!

      • http://letushaveaconversation.blogspot.ca Alicia Cumming

        Are you guys like waiter/esses in that it is expected by your boss that tips will make up part of the wage you’re entitled to?

        • Kelly

          Yes, for sure. We are paid less (way less) than typical workers in the medical field because we rely heavily on tips for income. We pretty much make a third in tips, a third in hourly and a third in commissions. Sorry it took me this long to see this!

        • Sorry

          Not a waitress and my business includes tipping which all of my employees live on. This is standard in the service industry here in the USA and everyone knows it. These coupon hoppers come in and do not tip, not because the service is not good, it is the same great quality that has kept me in business for 17 years but because they are cheap and know that they will not be back, they will go to the next place that has a voucher at half price.
          This was the WORST business decision I ever made. Yes we had a few repeat clients that were given another discount by us but 99% are bottom feeders that do not care about the small business owners in their community. Do not care about the people who are giving them this great service for practically nothing and look at it from their cheap standpoint only. There is no respect so that is why vendors get sick of it and are not happy to have them come in our doors anymore. I have never had so many people late without calling. So many no shows who feel entitled and think they should be able to reschedule because they had an “emergency”.
          Sorry but I will book our regulars instead, we get full price, generous tips and they call when going to be late.
          I have had the kind of customer these daily deals bring in and never want them again !

        • Bigboss

          As an employer I cannot apologize enough to my employees for doing a daily deal. I really though it was a good idea but it was in fact a nightmare. Not only do these deals attract miserly people who don’t want to spend money but the attitudes are unforgivable. NOT what I had in mind when I went into business and not what we were used to dealing with. I am also sorry to my loyal regulars who have paid full price and tipped well over the years. They are the ones who deserve anything at half price so I now refuse to deal with these greedy corporations and give discounts to the people who deserve it and don’t feel entitled. Just because you bought it at half price, doesn’t mean it is worth less.
          I have found that the less people spend the less they value it. Merchants do NOT do these deals, it is NOT worth it !
          These will NOT be repeat customers as they are cheap misers who go from deal to deal and do not care if you and your employees are working their butts off to keep a roof over their heads and feed their children. These are the bottom of the barrel, never see again, rudest, cheapest Americans in our country !

    • Lisa

      I always tip when at a spa, or salon. It’s customary. I would be curious if you find yourself getting bad service and wonder why? A token of gratitude goes a long way in anyone’s world.

      • Kelly

        Exactly. We know who tips us and who doesn’t. Those who don’t often find themselves getting poor treatments as we want them out of our hair (no pun intended) as soon as possible to make room for those who take proper care of their technicians.

      • Emily

        They don’t tip because they know they will not go back. They think we do not see this. We know they are coupon hoppers who will never come back. You don’t tip the first time, what do you expect the second ? Get real coupon hoppers !

    • Honestinjin

      Tipping is standard in the service industry. Most people know this and respect it and the people that work hard to serve them. When you give people something at half price and they don’t tip it makes us not want to give you that service again. I see it all the time with these deals. They have no respect for others so they do not tip or don’t tip on the full price as stated on the vouchers. Then they wonder why vendors don’t answer their phone the next time they call. These kind of customers, which are 95% of couponers ruin it for the few good people so the result is the vendors are not happy and the customers are not happy, the only ones happy are the daily deal corporations sitting back collecting the big bucks.

    • jonnie

      Yes Steve a tip, never heard of it ? That is how we have been doing it in the good ole USA for a long time now and your attitude besides being misery is one of the problems with doing these deals. I do not want your referrals if your friends have your attitude. I would rather stick with my regulars who give me referrals at FULL price and get tipped on that.

  • http://www.gingermandy.com mandy

    I used to write for a company that had a Groupon-like (daily deal) department. It was a nightmare. Easy money for me, yeah, but so many of the companies were doing it because they felt they HAD to, not because they wanted to. It sucked dealing with them because they would blame us when people wouldn’t come back, or tip enough, or spend way more than the $25 the deal was for, etc.

    The company was also filled with unscrupulous behavior, I actually had to take them to court for money they owed me and a few months later they went under. I think Groupon and Living Social are doing things much more efficiently than they were, but still, I don’t think it is a service that can last unless they have a revolutionary new system up their sleeves for the future. I know I would hate to work in the salon or fitness industry and have to deal with the obligation to do this.

  • http://letushaveaconversation.blogspot.ca Alicia Cumming

    My lovely sister gave me a 200 dollar groupon deal for laser because she didn’t like my belly and chin har-and although the englightening article on the side of the suffering on your end is appreciated-people who don’t have a lot of money don’t want to think about how the other end is suffering because look, we get this deal! And of course we looked at the inital price and thought it’s SO inflated, that the industry sets it that high because they can (like so many in demand businesses not the bitch of Groupon do). Laser takes a bajillion treatment sessins to fully eradicate hair, though, so I’m sure that’s a light at the end of your tunnel that Groupon (6 sessions the standard deal offer?) can’t snuff out.

    • Kelly

      I agree with you that Groupon is decent for customers in the sense that it makes things that were once unattainable, affordable. However clients rarely stick around once their deal has been redeemed. Businesses make little or no money on the coupons they offer through deal sites. It is purely to attract new clientele and they have to do it because if not, they have no competitive edge. However, when deal seekers bounce from place to place in an effort to save money everyone suffers. Many merchants go bankrupt and the ones that don’t end up having to offer compromised services by people with little training because they can’t afford the ones who are experienced anymore. Laser costs a lot of money because the machines are over a hundred thousand dollars and require costly regular maintenance. When Groupon comes in, business owners can’t always afford the best machines anymore, or to have them serviced so that means you get a poor treatment. Not to mention the employees are so overwhelmed they can’t help but sacrifice service in an effort to maintain the volume. One way to solve this problem would be to take advantage of the initial Groupon savings and then if you’re happy with the place that offered it, spend money there. Don’t just move onto the next deal. I hope that was helpful. And I’m glad you got your chin and belly lasered!

  • http://letushaveaconversation.blogspot.ca Alicia Cumming

    Ohh, trust me, I will if I need to. Electrolysis, what I got a handful of times at this Beauty school because it was cheaper and it was all they offered in terms of permanent hair removal, should be outlawed.

  • Clare

    I was a business that used Groupon and it turned out to be the worse experience ever. These clients come in with their heads held high like royalty after only spending $20.00 for a mani/pedi service that I normally charge $50.00 for and on TOP of that these customer’s never became repeat business.

    What get’s me is how these people just sit around like chicken heads waiting for the next deal. What even baffles me the most is that when they would come in for their service how they would start telling our Nail Tech about the fabulous vacation to Europe and other exotic places they were going, but toooo darn cheap to pay full price for their beauty services. I don’t know if they were just saying this to make themselves NOT look cheap or what, but, for me and my Tech it was infuriating.

    To say the least Groupon is much like a Ponzi scheme of sorts and I personally would NEVER purchase a Groupon again for any business because I know what it feels like. I would respect myself enough and the business owner enough to appreciate their hard work by paying full price.

    I hate GROUPON and the CUSTOMERS that frequent them.

    • Kelly

      It’s really unbelievable to me how little people care about the businesses and the employees they’re taking advantage of. Thanks for sharing your experience.

    • Emily

      I agree. I have been in business a long time, suddenly my service is not up to par ? BS. I gave these bottom feeders the same service that kept me in business for 9 years and what is the difference between my regulars and them ?
      My regular have class !

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  • http://Fuckgroupon.com Ted

    Groupon and Living Social just attract bargain hunting, low life, scum, young 20somethings who think they have money. Fuck em, really, fuck em all…dont give a coupon shopper 100%…they will not tip.

  • JoelyK

    I feel sorry for the small business owners. I have a friend who did this and I watched as she struggled to fit the voucher buyers in and let her regulars take a back seat. Bad idea but she wanted to do the right thing as she promised. She told me how it almost ruined her business. No matter how far she bent backwards they ( on the whole) were never satisfied. They do not look at the big picture, just out for themselves. They took advantage, ignoring the rules like asking if their husband or wife can use it even though the rule was no they cannot and when my friend let them to be nice, they did not tip nor return unless she gave them same deal. Also they complained when they only could go on a Saturday and a lot of people needed same day, they had to wait a few weeks to get that day. WTH? You got it at half price ! This business is only getting a quarter of it so what if you have to wait. Go pay someone full price and get in right away ! I think the attitudes are wearing business owners thin so next time you buy something at half price, remember the owners only get a quarter and relies you are getting a good deal but they have to pay their bills not only in their business’ but in their homes and for their children, etc.. Relise they are doing it to make money not lose and when you don’t go back and go to next deal you are adding to the problem so quit blaming them because you are cheap bastards.

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  • Tone Jackson

    I agree with the article above, and I can see how Groupon is wonderful for the consumer and for the company that calls itself Groupon, but it is horrible for the merchant.

    Being the only worker in my business, I am a massage therapist, I felt I was slaving and working harder than ever, but for nothing. I kept telling myself that Groupon was a good thing, and that I was making a little bit of money while working hard advertising my business. Well, I realized that most of the people who use Groupon, didn’t care much about finding a good massage therapist; they were looking for any massage therapy that were cheap. And even though I got a lot of compliments, they kept hopping around from one massage therapist to another, paying the fraction of what they normally would pay.

    I asked three other massage therapists I knew well who also have used Groupon, and they said the
    same thing. I asked my hair dresser who have used Groupon in the past, and she confirmed my belief by stating the same. It was not that any of us were bad in what we were doing, matter of fact I go to my hairdresser where I gladly spend the double of what other hair professionals charge, just because she does outstanding work.

    After have served ten clients Groupon had sent me, I knew that I could not do this anymore. Thankfully I have many wonderful clients who love the way I work, and thankfully I don’t have to work with Groupon ever again.
    What a horrible way of doing business!

    I wish and hope that eventually Groupon with its business ethics and policies will be regulated.