Aug 262011
 

Christy Lorio (photo by Leslie Almeida)

Just about everyone loves a good bargain, myself included. It’s a really satisfying feeling when you score a great deal, but just because something is cheap doesn’t mean it is a smart purchase. It doesn’t matter if I spend $1 or $100, if I didn’t use the product or care for the service, then I feel like I wasted my money.

Coupons, especially the online variety such as Groupon and Living Social, make it fun to save. The premise behind these sites is the social aspect of it and the fast-paced savings. Every day there’s a different deal, kind of like a marketing tool disguised as an advent calender of savings. It’s easy to get wrapped up in the excitement: Open the app on your phone, read the irreverently written blurb about why you need a deeply discounted facial, 2-for-1 swamp tour tickets, a half-price yoga class, even breast augmentation (I’m not making that up) then brag to all of your Twitter or Facebook friends about how much money you didn’t spend on a product you probably really didn’t need in the first place. Suddenly it’s hard not to get caught up in a digital coupon clipping frenzy that makes you wonder how much money you are really saving in the first place.

I personally jumped on the Living Social and Groupon bandwagon because at the time it did seem like a fun way to save some money, and it was a good excuse to try out new restaurants, salons, even bed and breakfast accommodations. While I’ve only let one coupon expire before using it, the thrill of the deals quickly faded when I realized I was just buying stuff that I really didn’t need anyway and that the coupons aren’t that good for the businesses that choose to participate.

I giddily booked a manicure at a salon, an indulgence that I only occasionally partake in. While I was getting my nails done, the manicurist chatted with me about how Groupon takes about 50% of the sale, leaving the business operating at a 90% loss on the service provided. Feeling sheepish by my own cheapness, I ended up booking another appointment as a full-fledged customer but had such a bad experience the next go ‘round that I haven’t been back since. It’s one thing to get customers in the door but it’s another thing to keep them.

According to Mallory of Miss Malaprop, a local eco-friendly blog with a penchant for small business, big coupons sometimes result in crippling losses for businesses if they don’t know what they are getting themselves into.

Half-off breakfast at the local cafe near my house sounds awesome, right? Yeah, maybe, except I’ve read plenty of horror stories like this one from Posies Bakery & Cafe in Portland. The more I think about it, the more I’d rather just eat out less at that cozy cafe near my house, and pay full price when I do. Because I WANT them to survive.

If you are going to use coupon sites do it wisely, leave a good tip, and don’t be afraid to spend a little bit of that extra money that you saved. And business owners, if you choose to market via Groupon it’s not just about getting them in the door once but offering consistently good customer service to make them loyal patrons. Cheapskates or not, nobody wants sub par service.

Christy Lorio, a native New Orleanian, writes on fashion at slowsouthernstyle.com and is also a freelance writer whose work has been featured online and in print magazines both locally and nationally.

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  • JK

    Agreed.

    Apologies for such a boring post. But I agree with Christy on this. That is all.

    • http://UptownMessenger.com Robert Morris

      JK – I agree with her also (and not just because these companies are competing with us for local advertisers). Offering a deal to get customers in the door is a time-honored tradition for marketing your business, but some of these types of deals can be extremely hard on small businesses. They have to a) be able to afford both the discount they offer the customer (50%) and the deep additional cut (50% more?) by the promotional company, and b) be able to handle a horde of customers all seeking to cash their coupons at once. And many won’t be as generous as Christy, returning a second time out of goodwill – they’re there just for the mega-deal.

      I’d actually already read the same horror story that Christy and Miss Malaprop link to, and would urge any business considering a coupon deal to do so. It might give you a jumpstart in a very specific set of circumstances — maybe if you have a high markup on your product, a lot of startup capital/inventory and manpower to handle the deep financial cut and the crowds — but that’s not most of us.