Gourmet ice cream from Gifford’s: 50 percent off. Clothes at the Gap: 75 percent off. Tickets to see a musical at Wolf Trap: 60 percent off. Accessing hundreds of useful coupons for 50 to 90 percent off at your favorite stores: Groupon.
Groupon.com, a deal-of-the-day website, provides users with daily redeemable coupons for discounts at some of the most popular retailers in the nation. Launched in November 2008, this Chicago-based website has over a million subscribers, said Groupon spokesperson Julie Mossler.
With subscribers from over 40 different cities across the country, Groupon provides coupons for everything from NASCAR-style stock car driving lessons to massage therapy sessions.
“I definitely like the ease of it coming directly to my computer and being able to print the coupon out immediately,” said Laurie Safran, an English teacher and Groupon user. “I like to go out to restaurants and I like to save money. Groupon is a good way to be able to do both.”
Every day, one ‘Groupon’ is featured on the website from a local retailer. To redeem a ‘Groupon,’ a certain number of Groupon users must purchase the deal. Once that number of customers buys the deal, buyers’ credit cards will be charged and they’ll receive an email with a link to print the coupon. They can then exchange the coupon for goods at the store.
If the minimum amount isn’t met, the user’s credit card won’t be charged, and the ‘Groupon’ won’t be redeemable. To meet the threshold, several consumers use Twitter, Facebook and other social networking sites to get the word out.
Parent Kenny Fried said Groupon helped him find both the best deals in town and new places to frequent.
“I’m always looking for deals and a lot of bargains are for high quality businesses,” Fried said. “I buy Groupons for mostly restaurants and foods, especially cakes and cookies, and stuff for my car.”
Groupon is unique, spokesperson Mossler said, because it offers unbeatable prices and provides a win-win for businesses and consumers. Merchants get the advertising exposure, and consumers reap the benefits of the high discounts, she added.
Chicken Out’s Renie Freedman said she believes Groupon has helped them increase business.
“It’s been a wonderful experience working with Groupon,” Freedman said. “Chicken Out in D.C. actually holds the district record for the most Groupons sold in 24 hours.”
While several businesses in the area have reported increased revenue from using the daily deals website, others report an alarming reduction in sales and customers.
Posies Café, in Portland, Or., made national headlines when they announced that their business had lost almost $10,000 and nearly went bankrupt as a result of its involvement with Groupon, restaurant manager Jessie Burke said.
She attributed the loss of revenue to the fact that a surprisingly large number of customers bought the Groupon. For each coupon redeemed, Groupon took 50 percent of the profits. For a small starting business, the results were devastating, Burke said.
“What makes businesses upset is feeling that they’re a little bit misled by Groupon,” she said. “While Groupon may seem like a beneficial service on the surface, the truth is that none of us actually make any money on Groupon customers.”
What determines how well a business will fare by using Groupon is how prepared they are for their featured day on the website, Mossler said.
“Businesses have to do their part,” she said. “This means training staff and ramping up employees if necessary, improving communication with customers during and after point of sale and delivering excellent service so that customers have a reason to come back.”
Despite the critiques of certain businesses, parent Olivia Lai continues to return to Groupon and scours the website daily for steals.
“There have been deals for the Gap, Madame Tussaud’s Wax Museum, the Newseum, the Spy Museum, Z-Pizza, and Potomac River Running,” she says. “That’s really deals for everyone.”
