Everyone loves a bargain, the streets are always full when the sales hit –  and this is why daily deal websites are taking over. Sites like Groupon are offering short-duration coupons offer consumers the chance to purchase products and services at huge discounts, typically around 50% off regular prices. 

 

Group coupons require a certain number of buyers before the coupon is valid. It is a pretty good deal for the customer – they get to experience a treat that they wouldn’t usually afford, or know about.

 

But, it isn’t all roses. 

 

Most of these sites require sign-ups and log ins, which is very frustrating for the shopper – then they have only a short amount of time to purchase the item, which leads to impulse buying and possibly debt. Refunds are rare and the quality of a product/ offer is not tested externally. But, the biggest downfall of these offers is what they do to businesses.

 

Daily deal sites need to offer the biggest and best discounts, and they tell merchants to have a minimum discount – usually 50%. Then, the site takes 50% of any offers sold -leaving merchants out of pocket on many occasions. The Rice study d found that a significant percentage of merchants using Groupon (32%) were not profitable. 

 

Groupon has been known to confuse merchants by informing them that only a certain amount of deals will be sold to customers, then when the offer is live they will double or triple the amount. This has led to various complaints, as small businesses cannot physically honour all of the deals. Recent studies suggest that 8% of businesses wouldn’t run a second promotion. 

 

Is advertising worth possible bankruptcy – extreme but these daily deal sites are the Tesco of the internet world – pushing small businesses to offer lower and lower prices when they are the ones who need to charge more to survive.