Groupon hit the scene in 2008 and in two years had taken the country by storm. It was even dubbed “The fastest growing company ever” by forbes.
The company continues to grow and this Groupon review will help you understand how to use Groupon to save money whenever you need the items that are available on the site..
What is Groupon
In its simplest form Groupon is using group buying power to get better deals. The name came from combining the words “group” and “coupon”. So the site takes the buying power from groups of local people and applies it to the need for foot traffic in local retailers. The idea is that everyone benefits by the deal.
This was exactly how the site started with offering a deal and once enough people signed up for that deal, it was released. If you had to have 50 people sign up for a deal and only 42 signed up, then the d-eal didn’t happen. It was group buying at its finest.
Now that the site is so HUUUGE, they don’t need the minimum level of signups, because they always get that many people taking advantage of the deal. This allows Groupon to negotiate with local retailers and vendors from a position of power.
So, in 2011, Groupon converted from the “daily deal” model to a marketplace model. This means you go and shop the deals when you want instead of having to jump on one particular deal in a specified amount of time. This gives us more opportunities to save instead of just one deal a day.
Ways to save with Groupon
This is the bread and butter of any Groupon shopping. Groupon works with local merchants to offer a discount price. Groupon gets a piece of the sale price and the merchant gets the rest, plus a lot of people trying out their product or service. We get a really great price on that product or service.
The most common local deals you will find are:
- Beauty and Spas
- Gyms and Fitness
- Automotive Repairs
- Home Services
These are all areas where, if you need it, you can get really good prices through groupon. My most recent purchase was 50% off duct cleaning in my house. It was well worth the price when we saw how much nastiness came out of the ducts in our 40 year old home.
The same can be done with tickets to local events, beauty treatments, and a host of other deals. The limits are going to be on how much stuff there is to do in your area.
In getting into the marketplace model, Groupon has started offering discounted prices on travel, electronics, and other items that really are nationally oriented. The travel deals are a mixed bag. I measure them against similar deals found on websites like Hotwire and Priceline. Sometimes the groupon deals are better sometimes not. Just make sure to do your research when purchasing anything on the site that has a national audience.
There are more established sites in this space, but Groupon does a pretty good job of finding discount offers and coupon codes from around the internet. In their coupons section you can search and see if there is a coupon code that matches the site you are shopping on.
You have to be careful when using these in conjunction with cashback rebate sites. Groupon is not offering these coupon codes out of the goodness of their heart. What they want you to do is click on the link they provide to the retailer so they get a commission. The codes they offer can frequently conflict with the cashback rebates you get with the rebate sites.
Here’s an example, I get 20% cashback using Mr.Rebates on 123inkjets.com (learn more about this in my MrRebates.com review). If I find a 15% off code on Groupon it could cancel out my 20% rebate. That’s not a winner.
The Groupon App
Everyone is putting out their own app these days and Groupon is no different. The app is really taking off and the main feature is digital redemption of the Groupon offer. So instead of having to keep up with the printed out bar code you can redeem the offers directly from your phone.
Negotiate a Better Deal
This is something most people never realize because you have to dig into how Groupon works. As I mentioned above Groupon takes a cut of the sale price for the Groupon deals. This cut can be pretty significant, as much as half. This means you have an opportunity to contact the retailer and ask for a lower price than even what the Groupon is offering.
For example, you find a service that is $50 on the Groupon price. Since we know Groupon is getting about 50% of the sale price we can call that retailer up, tell them we saw the deal on Groupon and offer them $40 for the same service. The service provider makes $15 more and we save $10. This doesn’t work all the time, but when it does it’s a great way to get even more off.
Cautions When Using Groupon
As with any deal website you need to take some caution when making a purchase. These fall into the three main Groupon complaints that pop up frequently online.
Watch the Fine Print
The fine print on Groupon offers have details that may make it hard for you to redeem your purchase. They sometimes have a restriction like specific day of the week or even a specific date.
Other restrictions include a limited menu or a minimum purchase amount at a restaurant. It might not be worth the big discount at an Italian restaurant if you are only allowed to purchase pasta with red sauce.
Finally always check for any additional fees or charges and to see what the cancellation policy is. For instance, if you purchase an activity that is weather dependent and a monsoon comes through on the exact day you scheduled, what are the options for being refunded. This is especially important if you purchase a Groupon when you are traveling on vacation.
Careful WHEN Redeeming
When purchasing a Groupon for an activity or service that requires you scheduling an appointment, you need to be careful of when the deal ends. If you get close to the end of the redemption period, everyone could be scrambling to get their appointment scheduled and you end up without a possible slot.
A good example would be day spa deals. They only have so many slots to fill each day, so if they are all full then you will not be able to redeem.
To avoid this problem schedule as soon as you can when you purchase the Groupon and watch for Groupon deals that are close to their expiration.
Check the Deal
With any type of purchase you want to shop around. Sometimes you can get a better deal from another source. The advantage to Groupon will always be the convenience of one site to find the deal. One time they were offering $18 tickets to the Met. Musuem of Art in New York. The Met operates off of a suggested donation basis. So if you really wanted you can go anytime you want at that price. There is a recommended amount that the museum requests people pay, but they don’t want to keep people who truly cannot afford the price from being able to learn from the museum.
Always do at least a quick Google search to make sure that what you are getting is the best price.
How I Shop on Groupon
Either Amy or I stop by the Groupon site about once every week to two weeks to see if there is some sort of local deal that makes sense for our family. When I make a purchase I always make sure to hit the Mr Rebates site first and use their link to go to Groupon, this gets me an extra 6% cash back on my purchase.
Once on the site select your deal and when you pay use a cash rewards credit card. This gives you an extra layer of protection if a deal goes bad and nets you an additional 1% cash back.
If we add all that up on a 50% off deal we get 50% off from groupon and an additional 7% cash back on the discounted price. That adds up to 53.5% off your original price.
We especially use Groupon when we go on vacation. This is great for finding lower cost activities for our kids and allows us to focus on supporting local businesses. If you use a Groupon and have a great experience at a place you are not going to be able to be a frequent customer, go to Google or Yelp and leave a top review to try and help that local business attract more traffic.
I really like to hit local restaurants when I travel, so Groupon gives us the chance to hit a little nicer establishments without breaking the bank. Amy and I try take one night out by ourselves when we vacation and we can usually find a good restaurant deal on either Restaurant.com or Groupon.
Overall Review of Groupon
I have a really high opinion of Groupon when it comes to getting a deal, especially from local businesses. It gives me a chance to try out services and activities I may not have done because of not being sure of paying the full price. The site also offers amazing savings when you are on vacation and not sure of the best activities for your family.
While I use Groupon mostly when on vacation and for dining out, it is an excellent money saving site as long as you are careful with what you purchase and make sure you are using the deals to their fullest.