LPT

Laura Pevehouse Thomas

Group Couponing: Maybe Good for Some, But Probably Not for All

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“Like the world needs another one of those.”

CHICAGO, IL - JUNE 10:  The Groupon logo is en...

That was the snarky comment I heard myself saying in a meeting this week where someone said of a mobile application that was being discussed that it could eventually be a way of delivering a group coupon buying service.

I guess the guild is just off the lily for me with such services as Groupon and LivingSocial. That’s not to say I haven’t had good experiences with them.

My first Groupon purchase worked perfectly for both me and the restaurant that was participating. It was a fondue place that we’d been to before, but didn’t frequent often because it’s a little more expensive than we want to spend most nights out. The Groupon worked for us because we were able to save $20, which made it a bit more bearable on the pocket book. It worked for the restaurant because it brought us back in sooner than we might have come, and of course, we spent a little more than just the coupon amount.

With that experience under my belt, I dove into the group coupon buying crowd with much confidence. It soon waned, however.

First there was the housecleaning service that assured me when I called them prior to making the coupon purchase that they could get someone out to my house prior to a Christmas party, but then said they were booked when calling after the purchase. Then, it was the spa package bought in January that said they were booked and to call back in March to try again, only to tell me in March that they couldn’t fit me in until October.  And the last one I tried for a photo package at a mall chain store ended when I walked by the store to see it dark and a sign taped on the door explaining they’d not been able to pay their rent.

The coupon services themselves did everything right. LivingSocial refunding my purchase of the spa package without fuss and on the same day I requested it. They also sent out notice of refunds on the photography package before I even got around to asking about that one.

Based just on my experience, I’d say that these sort of promotions aprobably work best with companies that are more product based than service based. Meaning, it’s a lot easier to simply give a discount on a meal – they’ve been doing those sort of coupons in newspapers and direct mail for ages – than it is to meet a surge in demand for cheap housecleaning and massages.

No, it’s not the couponing service, but the businesses that use it that have had trouble delivering what is promised.

But that doesn’t mean the coupon providers aren’t in trouble. As VC Bill Gurley of Benchmark Capital put it, “Everybody and their brother has entered this space. There’s really not that much they do.

Yes, when Travel Zoo suddenly started adding “local deals” at restaurants here in Austin similar to the one I’d first purchased from Groupon to the weekly emails I get from them on hotel specials and flight deals, that’s when I agreed with Simon Dumenco that they’d jumped the shark.

I mean, group coupons for real estate? Really?

Image by Getty Images via @daylife

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