Back in 2009 and 2010, I loved using daily deal websites like Groupon and LivingSocial. I am a sucker for a good promotion. After all, I do not like to squander my hard-earned money. However, I soon learned that getting a good deal sometimes comes at a steep price. These are just a few reasons why I no longer give in to my temptation to save money using voucher websites.
Reason #1: Unclear Terms of Use
Many of the products I purchased through daily deal websites did not provide clear terms of usage prior to my purchase. For example, I bought a gift certificate through LivingSocial for a popular bath and body retailer. This store has a significant web presence. However, most of its brick and mortar locations had closed, including the one in my community. I did not realize until after I purchased the gift certificate and attempted to use it online that it was for the brick and mortar version of the store only. This leads me to the second problem with daily deal websites…
Reason #2: Difficult to Get Refunds
Because I did not realize that the bath and body certificate I had purchased was for brick and mortar stores only until well after the gift certificate was purchased, I could not get a refund. Depending on the product, LivingSocial limits the refund period to within 24 hours of purchase. Thus, if an oversight like this is made, it is a total loss, unless the certificate is sold on eBay.
Reason #3: Businesses that Promote on Daily Deal Websites are Failing
We all know that promotional rates are given to Groupon and LivingSocial users because businesses want to bring in new clients. While this is a goal of every business, an organization attempting to raise funds through a daily deals website may be in deep trouble.
I once purchased a Groupon for a museum in Central Kentucky. The day I ventured out to the museum, there was a small, crudely-written sign on the door saying “Closed Today for Private Viewing.” Before I could attempt to visit the museum again, the local news reported that it had closed permanently. Apparently the private viewing party ultimately bought the entire museum collection. Go figure.
Reason #4: Certificate Expired? Business Closed? Too Bad.
Some expiration dates on daily deal vouchers can be quite short-as little as a week, historically. This could imply that part of the business model of selling the vouchers hinged on people never using them. And, if a voucher happened to expire before it was used, or if the business that issued it had closed, it was both unusable and non-refundable.
Eventually consumers got tired of these extreme terms and filed multi-million dollar class action suits against LivingSocial and Groupon. Both cases were eventually settled, and the rules are a bit less restrictive now. Still, it is a system I am uncomfortable with giving my money to.
Reason #5: They Entice You to Buy Things You Don’t Need
Those daily emails from Groupon and LivingSocial can be quite tempting. I did not need my teeth whitened, but I seriously considered it after being offered a sweet deal from a local dentist on Groupon. I certainly did not need to buy a gift certificate for overpriced bath and body products, nor did I really need to pay $5 for $15 worth of coffee from a national chain (although, admittedly, this is one of the few deals I have not had an issue with redeeming). Being bombarded with daily emails advertising amazing deals certainly encourages a person to get out the Visa card and charge away-a temptation that someone with a tight budget does not need in a bad economy.
Given these factors, is it any wonder that daily deal websites are losing popularity? It became abundantly clear that giving money to a website like LivingSocial or Groupon was a risk. You might get what you ordered, or you might not. Plus, you have to remember to carry-and use-the vouchers before they expire.
Daily deal websites can be wonderful for those willing to read through the fine print. However, I have been burned one too many times by Groupon and LivingSocial, and it would take years of positive reports from consumers for me to consider using them again.
Resources
Anya Kamenetz, “LivingSocial Ordered to Pay $4.1 Million To Settle Class Action Suit,” FastCompany.
“Can I Get a Refund?,” LivingSocial Help.
Julianne Pepitone, “Groupon customers offered class action payout over expiration dates,” CNNMoney.
