What would you think if you woke up to an email that gave you the ability to purchase a $20 gift card worth $40 at that restaurant you were dying to try? What if you woke up to deals like this every day? Too good to be true? That was my reaction when my friend told me that she and her boyfriend had enjoyed an $80 dinner at a pricey restaurant in Boston for $40. I knew then that it was time to do some investigating.
Getting Something for Nothing, or at Least Less
It turned out that my friend was signed up to receive emails from a website called Groupon that featured daily discounted deals. These deals ranged from gift cards for restaurants in larger cities to spa treatments to discounted memberships at gyms and golf clubs. She received a deal offer every day, and all she had to do was click to buy if she was interested.
So How Does Groupon Work?
Groupon offers unbeatable deals through the power of group buying. This means that their staff will go to, say, a restaurant and buy a certain amount of gift cards in bulk for a discounted price. Once the deal goes up on the Groupon website, a goal number of purchases is set and a time limit (the amount of time you have to take advantage of the deal) is also posted. If the goal for amount of people who purchased the deal is not met by the expiration date, the deal is cancelled and no one loses money. Even if you “bought” the deal, you are not charged if there was not enough interest in the deal. Once the goal has been reached, the website will clarify that the deal is on.
For example, today’s deal is a $50 gift card worth $125 in spa services. That is a 60% discount in which you’d be saving $75. 50 people had to buy by midnight tomorrow in order for the deal to go through. Currently 172 people have bought, so the deal is good and anyone can take advantage of the offer.
After you click “Buy,” once the minimum amount of people have signed up for the offer, Groupon will charge your credit card and send you a link to print your Groupon. You can also buy a Groupon for someone else as a gift.
Groupon has learned how to establish a good rapport with businesses, bringing them, in most cases, more business than if they had not participated in deal making with Groupon. The site makes people aware of restaurants, spas, clubs, etc., that they may not have been aware of in the first place. This helps people broaden their horizons and helps businesses grow. Groupon also features local charities and organizes support for community causes.
How Did It Start?
The idea for Groupon, which launched in November 2008, came out of a website called The Point. The Point allows people to begin a campaign asking people to give money or do something as a group, only if a “tipping point” of people have agreed to participate. This delaying of action (waiting until a number of people have signed up) helps people come together to accomplish things that they couldn’t do alone.
Groupon was created to make the user experience friendlier. By offering 1-3 deals a day, the consumer is less overwhelmed by the amount of choices they have.
Are There Other Sites Like Groupon?
There are, in fact, TONS of sites just like Groupon that have embraced the power of group buying. Here are some of Groupon’s top competitors:
- BuyWithMe: BuyWithMe works in the same way as Groupon. If you sign up, you will receive daily email offers. They also have a list of all of their active deals if you visit their website. The deal I was sent today was a $20 gift card worth $45 to get a haircut on Newbury Street in Boston. BuyWithMe also does a good job of boosting businesses. It definitely seems like they have a good rapport with well-known places.
- LivingSocial: This site is similar to the other two, except that it comes with one unique perk. After you purchase a deal through LivingSocial, they will send you a link that will allow you to share the deal. If 3 people buy the deal using your link, then you receive your deal for free. While this seems like an outstanding perk, Groupon features deals in 45 cities while LivingSocial currently only serves 14 cities.
- Tippr: Each day, Tippr features 3 deals. They also have accelerated deals, which means that the more people who purchase a single deal, the better the deal gets for all involved. Tippr features deals in 25 cities around the US, but because Tippr is a newer site (launched in February 2010), it doesn’t seem to have the rapport that Groupon and BuyWithMe have with more well-known merchants at this point.
- jasmere: This website works like Groupon but with its own twist. Jasmere actually seeks out lesser-known retailers and features deals from them on their website. Jasmere spotlights certain business and creates a sort of profile for them so that consumers can familiarize themselves with the retailer. They also tend to feature products as opposed to services and gift cards, so in this sense, it doesn’t matter where you live. You can take advantage of jasmere from anywhere.
Which One is Right for Me?
Only you can tell which of these sites works for you. If you are more interested in going out for an occasional night on the town, I would suggest Groupon, BuyWithMe, or LivingSocial. If you are more interested in buying products and supporting lesser-known retailers, I would suggest jasmere. Really though, there is no shame in signing up for emails from multiple sites. I would recommend choosing just a few if you don’t want to be bombarded with a lot of daily emails.
Your Experiences with Groupon
Do you take advantage of Groupon or other sites like Groupon? What have your experiences been like? Is there another site, like Groupon, that you swear by? Would you recommend that other Tip Heroes take advantage of these discounted deals? Let us know!