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Groupon and LivingSocial – Part III: A Consumer’s Friend or Foe?

This is the final post in a three-part series discussing the positive and negative aspects of online deal services such as Groupon and LivingSocial.

As a small business owner, you are also a consumer. Every day you purchase and consume products and services, from gas for your car to groceries for your home. You’ve seen all of the positives and negatives associated with using Groupon or LivingSocial for your business, and now it’s time to take the perspective of the consumer. Just as there were pros and cons to using Groupon or LivingSocial for your small business, there are similar advantages and disadvantages associated with using these particular discount services as a consumer.

Pros

Save money.

As you know, the main benefit associated with these services is the chance to save money. Where else will you be able to purchase and enjoy a $50 gourmet meal at half the price or less? Customers can gain access to ridiculously good deals on the products and services they love and need by participating in deals with Groupon or LivingSocial. You will typically be able to take advantage of deals that are anywhere from 50 to 75 percent off the regular price. If you are trying to save money, stick to the family budget, or reduce your monthly spending, these deals will allow you to splurge without breaking the bank.

Try new things.

Do you find that you frequent the same restaurants, movie theaters, or stores over and over again? With Groupon and LivingSocial deals, you now have the incentive to try new establishments and services! If you’ve never had a reason to visit that cute little boutique on the town square or the hardware store with the expensive tools, you now have a great discount you can use. Who knows, you may end up finding your new favorite store!

Find deals in your community or travel all over the world.

The great thing about Groupon, LivingSocial, and similar online discount services, is that they provide you with deals in your immediate area. But, what if you are going on a vacation and want to save a little bit of money in the long run? You can search for deals in different locations. Save money on that romantic trip to the log cabin, or admission to the family amusement park on your next vacation. You don’t have to dig deep into your pockets to go on a vacation with family and friends. Groupon and LivingSocial offer domestic and international travel deals for you as a consumer to enjoy.

Cons

Groupon and LivingSocial respectively do not have a squeaky clean, positive reputation. If you search for Groupon and LivingSocial reviews online, you’ll find a wide array of negative reviews, complete with detailed descriptions about the customer service and return policy nightmares experienced by frustrated consumers. Take a look at the negative aspects associated with online discount promotions and deals. You may just change your mind about that 70% discount at your local small business.

Bad for small businesses.

If you’re an advocate for local businesses (and have read the previous two posts), you’ll understand that these deals can be detrimental to the financial stability of small businesses. Far too many business owners have been tricked into thinking that these services will be beneficial for their business. Instead, they experience financial loss, a far too large overflow of customers and not enough resources to manage the demand. If you enjoy shopping at small businesses and supporting your local economy, then you probably won’t be a fan of Groupon or LivingSocial. Help your local economy by purchasing from a small business without using a coupon or discount. The majority of the time, these businesses already offer products and services at a competitive and affordable price.

Still want to get a discount and save money? Several large brand name stores utilize Groupon and LivingSocial as well. These big name brands can afford to lose money per customer in order to drive new traffic. In addition, your favorite small businesses may offer their own sales and deals. By providing the deal themselves, they don’t have to provide a service with half of the profit or offer such a steep discount.

Read the fine print.

Groupon and LivingSocial both state that their return policies are easy and hassle-free. Well, unfortunately thanks to several online reviews of this service, we know that is not the case. Take a look for yourself and read the hundreds (if not thousands) of complaints about their return policies online. From flaky customer service representatives to strict, and quite unnecessary, return guidelines, I would avoid having to return your coupon/product at all costs. Be sure that you really want the service or you know that the product you receive will work.

But I have no interest in that…?

I dug up my old Groupon account and signed up for LivingSocial in order to do a bit of firsthand research and test out the consumer experience. First, these services ask you to select your personal preferences. I selected the options that best represented my individual interests, including options from restaurants to outdoor adventures, and more. After selecting my preferences, I was brought to the home page – which displayed coupons and deals for products and services that I had no interest in, or were not located anywhere near my location. No offense Groupon and LivingSocial, but I’m not about to drive 45 minutes away to get 60% off of a haircut. Sure, after some digging I found some deals I may be potentially interested in. But in all honesty, the only reason I would purchase any of the deals is the price. The website simply wasn’t engaging or drawing me in to use their service.

Ultimately as a consumer, you have the final say. By using a Groupon or LivingSocial deal, you will save a significant amount of money but may need to deal with an infuriating return policy should you need to return your purchased item or deal. You’ll finally have a reason to try that bakery downtown, but are you willing to potentially risk the financial stability of the company? These choices are all associated with using Groupon or LivingSocial.

Conclusion

These online discount services, when used properly, can be beneficial for the consumer and the small business. In comparison, if not properly planned for or executed, the deals could mean the downfall of a business or a highly frustrated customer. In closing, if you choose to use these services, remember to plan accordingly and take every last detail into account.



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