Groupon | Dangerous Common Sense

When Groupon Promotes a Really Bad Deal

Groupon Gives a Full Refund When they Sponsor a Bad Deal

When I look at a Groupon deal I assume that the deal-making company has been vetted by Groupon. I expect that Groupon has made sure that the company is real and is sufficiently big to handle the traffic that the deal will bring them.

As a consumer I took comfort in believing that Groupon knew its deal makers were quality companies. After all, Groupon was standing in front of a company, and their reputation was at stake.

I have bought 10’s of Groupons and have had no problems. I felt that any Groupon I bought would lead me to a quality company whose products and service I could safely sample at a reduced cost.

I have learned better. Buyer beware!

Bin32 is a Napa wine seller who offered a Groupon for $198 of wine for only $54. Great!

Except that in February when I went online, selected my wines, and went to check-out, the Groupon did not cover the full amount of the charge. In addition to shipping, which was an acceptable extra, in my opinion, there $4.54 was not covered. I gave the site my credit card to get the order placed, and decided to complain to Groupon separately. Groupon emailed me back after a day or so that Bin 32 reported that they charged the extra amount for ” … for all taxes and processing fees.” Of course, $4.54 is not a tax amount or anything that maths out. It was just Bin 32 trying to get more money. After I complained again, Groupon gave me a $10 credit for my inconvenience. I was more than made whole, so I was happy.

Except the wine never arrived. After about a month I checked the Bin 32 site and saw that my order status was “Processing”. I sent Bin 32 email inquiries (I could not find a phone number on their web site) in March and then again in April. Nothing.

When I checked a couple days ago — we’re now in May — my order on the Bin 32 site was listed as “Complete” and there was a note that the order had shipped by UPS. Except, of course, I hadn’t received any wine.

I contacted Groupon yesterday, and today I received a full credit for what I paid Groupon. I am still out about $13 that was charged to my AMX, but after the earlier $10 Groupon credit, I am only really in the hole for $3 and change.

$3 is a pretty cheap cost for a consumer education. Here’s what I’ve learned:

First the positive. Groupon has been responsive and wonderful.
But, Groupon doesn’t do a flawless job of researching its dealers. Bin 32 has 78 ratings on Yelp. All of them are 1-star. Some of the Yelpers complain that in addition to not delivering the goods, BIN32 kept charging their debit and credit cards for orders not placed.

Yelp’s deals include links to the business’ ratings page on their site. That’s handy. In the future, I am going to be more careful when buying a Groupon and do some research before clicking “Buy”.

By Ozdachs|2012-05-17T09:28:27-07:00May 16th, 2012|Groupon|2 Comments

A Shout Out for a Year-End Photography Workshop Deal

Photographer John Ater

Earlier this month I had an awful lot of fun being educated in the basics of taking pictures by professional San Francisco photographer John Ater. I had bought a Groupon for a three-hour workshop which was limited to 10 people, and right before its expiration I signed up for a Saturday Chinatown group shoot.

Ten of us showed up at Portsmouth Square for a talk, a walk, and shutter-snapping practice. The workshop was set up to let us experience looking at the streets with the eyes of a photographer. The day was a satisfying mixture of professorial tips, individual hints, and photographic assignments… all strung together in a very informal, non-stop four-hours that covered about four blocks of territory.

John doesn’t teach how to use your camera and its features. In fact, nearly all the class shots were taken on the cameras’ automatic settings. Rather, John leads you to explore framing what you see, leaving spaces, and looking up and down and all around.

Most of the students showed up with digital SLRs, but John is no equipment snob. One of his first commentaries is about his two-sided business card. One side features a model in a department store photo shoot. The other is an iPhone-snapped gritty city picture of people on a bus. (Guess which one I felt was more compelling.)

John advertises the workshop as a three-hour experience. Ours lasted over four, if you count the 30 minutes or so we gathered in a tea house and swapped photographs and commented on each others work. That unwinding show-and-tell finale made me want to keep snapping and figuring out how to play with the images I saw.

John is offering a better-than-Groupon deal if you purchase a workshop directly from him before December 31st. You can buy an unlimited number of workshops for just $60 each. My Groupon was a half-price $75 and the experience would be worth the full rate of $150. I think this direct deal is a good buy. I am happy to report that I received a certificate for another workshop as a Christmas gift!

So, if your shopping for yourself, your professional life, or for a friend, I recommend John’s photography workshop deal.

By Ozdachs|2011-12-27T17:04:08-08:00December 27th, 2011|Tips and Resources|0 Comments

Yelp Ends Free Announcement and Special Offer Postings

This afternoon I logged on a Yelp business account. The account is for my church, the First Unitarian Universalist Society of San Francisco, and most weeks I post the weekly service description as an announcement in the 140 characters Yelp has offered for free. The description shows up highlighted on the church’s Yelp page so visitors can check out what’s coming up that Sunday.

Today Yelp greeted me with a pop up saying that they were phasing out announcements and special offer notices August 11th.

Yelp said they’re stopping the free announcements because business owners had requested a better way to reach people. That smacks of an untruth, frankly. I doubt any business asked the free highlighting to stop so they can sign up and pay Yelp to offer special deals.

In fact, I am not even sure that as a consumer I need yet another deal-offering site. Groupon, Living Social, and Google are all offering deals of the day — Google’s announcement of a program for San Francisco was on the news just today. Yelp and Open Table have also sent me deal emails in the past months. A steadier stream of deals from Yelp won’t be welcome in my inbox.

And, really? Yelp is making this change for my business, the church? Wow. What kind of Yelp deal should my church offer?

A special deal on salvation? Unfortunately, hellfire isn’t a part of Unitarian Universalist theology, so we’d have to work on exactly what we’re offering. We don’t encourage visitors to contribute to the collection plate, so we cannot offer a discount there either. Would you want two sermons for the price of one, anyway?

But, I am sure Yelp’s sales staff will call us and help us figure out something we can advertize.

Ultimately, it’s disappointing that non-profit community groups are getting slammed in Yelp’s zeal to monetize its pages.

By Ozdachs|2011-07-12T17:41:46-07:00July 12th, 2011|Social Media, Yelp|1 Comment

How LivingSocial is Anti-Social

Our favorite local restaurant alerted me to its upcoming” $50 of food for $25″ deal on LivingSocial. So, I went online yesterday and signed up on my iPhone.

I will buy the deal for Eurkea when it shows up. But, ugh. LivingSocial itself is pretty much a mess:

There’s no obvious way to change your password. When I signed up yesterday on the iPhone I picked a simple password, intending on making it more secure when I was at my desktop and had access to my random character password generator. Now I don’t see any link to change what I first entered. Nothing in their help search for “change password” either.Okay, LivingSocial… but don’t expect me to store a credit card or other sensitive information with you!
Their “recommend a friend process” is cheesy.
- The LivingSocial recommendation page asks you to enter your friends’ email addresses. They show you the spammy message that they’ll send to your friends, but you cannot change it.
  
  “Hey, have you checked out LivingSocial’s Daily Deals? Each day, you get an email with huge discounts to restaurants, spas, museums, and more — all for 50-90% off!
  
  I’m already a member and this is your invitation to join. It’s free — just click on this link to sign up. You’ll immediately get 5 Deal Bucks, and I’ll get 5 Deal Bucks when you buy your first deal.”
  
  That’s not my style, so I won’t be sending friends recommendations. (Okay, if you write and ask, I’ll put in your email address. But, I won’t spam unsuspecting friends with LivingSocial corporate chatter.)
- The graphic at the top of the page implies that you will receive $5 credit for just sending an email message inviting a friend to join. That’s unreasonably generous, but, that’s what they’re offering, right? Wrong! The real offer is “When a friend uses your link, they’ll get 5 Deal Bucks to help them buy their first deal. Once they do, you’ll get 5 as well!” That’s reasonable, but it is not what the graphic says.
LivingSocial Refer a Friend Offer
LivingSocial wants you to live in Los Angeles. Very “Ugh!
“When I signed up on my phone yesterday, I gave the app my permission to use my location, presumably so it would send me local deals. Instead, it showed me current San Francisco Bay deals, but subscribed me to the deal emails for Los Angeles.There doesn’t seem to be a way to pick a home city. Instead, I clicked around and discovered that I could un-subscribe from LA deals and instead ask for San Francisco deals. The process isn’t intuitive, and I am not sure most people would work that hard.

Services like LivingSocial who are playing catch-up to dominant players (Groupon, in this case), have to give consumers a reason to switch to them. LivingSocial is offering only an inferior user experience. I signed up because I’m looking forward to saving $25 at Eureka. But, once that’s accomplished, Groupon is going to be site I spend my bargain hunting time!

By Ozdachs|2011-06-12T09:59:44-07:00June 11th, 2011|Social Media, Tips and Resources|1 Comment

Can You Handle 1500 New Sales in 24 Hours?

Can your business handle 1500 new sales in 24 hours?

That’s what happened to our go-to neighborhood restaurant when they were featured in the San Francisco edition of Groupon.

Groupon? What’s that?

Groupon is an Internet promotion site that features a business local to you every day. That business offers Groupon subscribers a deal, typically 50% off. In the case of our local restaurant, they offered $50 of food and beverage for $25.

Groupon encourages people to share the deal with their social networking friends. In fact , a lot of the deals aren’t effective unless a certain number of people, say 100, buy.

When you join Groupon, every day you receive email about that day’s deal. If you like how it sounds, you click to the Groupon page and buy the deal. Your credit card is charged that day, and each Groupon deal has its own expiration date (usually a few weeks to a year in the future). There’s no charge to be a Groupon member. You pay only when you make the decision to buy a deal.

Recent San Francisco Groupon deals have included $50 of restaurant food for $25, 1/2 off city tours, $28 of seafood from a fish market for $14, professional teeth whitening for $200, two one-hour tourist airplane flights around San Francisco for $150, and $50 of Nordstrom’s Rack clothes for $25.

If you haven’t checked out Groupon as a consumer, I recommend signing up for their email. They offer Groupons in all major cities, and in a lot of mid-sized places, too!

(Go ahead, sign up!)

Now, if you’re a business… It’s a real deal!

The owner of the restaurant said that they sold 1,500 2-for-1 Groupons the one day their place was featured. If Groupon took 50% of the coupon’s cost as its fee (that’s the percentage mentioned in some online accounts), then the restaurant quickly gets $18,750 in cash for which it has to deliver $75,000 in list-price food and drink during the next six months (the expiration period for this deal).

I think it’s a great deal for both the restaurant and its patrons. Of course, the final results will depend upon the mix of customers and what they order. But even using us as an example of established customers, I think the restaurant is on solid financial ground. Our bill before tip is generally about $80, and at least 1/3 of that is high-margin alcohol. So, when we go with our Groupon, we’ll pay $30 above the Groupon value, and much of the total is high margin stuff. So the restaurant is taking in $42.50 ($30+$12.50) which should be greater than its marginal cost to serve us.

And, we are the worst possible buyers of Groups — we’re established customers who would have gone to the restaurant anyway.

On the other hand, some number of the Groupons were bought by people who have never walked in the door before. These folks are going to keep going back (because the restaurant is wonderful). For these people, the restaurant is gaining new revenue from new clients who will keep generating income over the years. I am guessing that other ways of acquiring new clients is greater than the $37.50 ($50 – $12.50) the restaurant is paying for its Groupon experience. In any event, the restaurant is going to make money if the clients spend more than $50 at dinner or when they come back in the future.

So, do you want 1500 sales in the next day? Can you handle that much business?

For me, the only question is do you have a service or product that has mass consumer appeal (my accountants and attorney clients don’t have services that make deals possible)?

If you do have a Groupon-able product, let’s get creative. Let’s think how your business can be Groupon featured deal of the day!

By Ozdachs|2010-11-28T17:29:38-08:00November 28th, 2010|Marketing|0 Comments