In the 1970s, collective buying brought about the development of grocery warehouses. Shoppers could happily find large quantities of favorite or frequently used items at reduced costs. Farmer’s cooperatives, around for generations, allow groups of individuals to buy and sell products collectively. In the last couple of years, this philosophy entered the product and services market.
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The First Groupons
Groupon spawned from the charitable site ThePoint. Essentially a group coupon deal, numerous merchants converge, offering attractive discounted deals to multiple customers. However, in order to avoid fraudulent deals and unnecessary expenses, individuals must learn how to use Groupon deals wisely.
Other “Groupon” Sites
Many sites have recently developed into similar models including CouponSherpa.com, 8coupons.com, LivingSocial.com and Tippr.com. Merchants offer discounts on a variety of products and services ranging from clothing, fresh baked goods and dining out, to spa or salon appointments and adrenaline pumping vacations. Some are regionally located while others have clients from around the globe. Groupon has amassed millions of clients during a short two-year lifespan.
How Groupons Work
Consumers establish an account to receive emails with daily deals that vary in number depending on the site. Retailers offer discounts on gift certificates, goods and services. Savings average 50% or more in most cases. When a deal appeals to a shopper, he or she chooses the purchase option.
Watch for Drawbacks
Drawbacks appear as each offer must have a specific number of shoppers who select the same deal or the opportunity is withdrawn. While waiting for coupon processing, consumers engage in conversation with other clients concerning questions or experiences with particular offers. The deals are generally time dated for 6 months to one year and sites recommend that purchasers refrain from using certificates until merchandisers are ably equipped to handle all demands. Not everyone receives exactly the same deal as buying history, gender and location play a role. One individual obtains a salon appointment for a manicure, while another person might get an appointment for hairstyling.
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Reasons to Use Caution
Companies attempt to attract quality and reputable businesses, but consumers should be cautioned to check out locations by visiting the Better Business Bureau or investigating online for possible scam alerts. Individuals must also exercise caution when sites require private information or card numbers. Ensure the retailer uses valid security measures evidenced by a padlock symbol, https URL address and plainly displayed protection logos.
No Time for Careful Decisions
It’s also hard to see an enticing deal come up, knowing you only have a limited time to respond and must make a decision quickly. Smart consumers are used to carefully evaluating every purchase, something that is nearly impossible for group coupon deals.
Restrictions
Read the fine print prior to choosing deals as some only apply to specific situations including new clients or limited number of purchases. Appointments or reservations may not always accommodate an individual’s time schedule. Under these circumstances, company sites attempt to accommodate consumers with alternative discounts, increased flexibility, or refunds.
Who Uses These Deals?
Individuals beware, as many of these sites are not for the average consumer. According to customer and buying history, shoppers using collective purchasing locations are not the typical conscientious, frugal person. Participants tend to be financially successful women, employed full-time, and bring home salaries ranging from $70,000 and up. People easily overextend budgets by searching for a particular offer only to be enticed by another. Discounted offers do not truly generate savings if the money would never have been spent in the first place.
You won’t find deals on necessities at these sites. You’ll only find luxuries, vacations and other extras that the average person cannot otherwise afford.
Chad Fisher spends his time building and promoting websites for people to learn more about low-income housing and has developed a free site for consumers to access car insurance quotes from providers in their state.
Reader Comments Read all comments (4)
FrugalGal of OR 8:18AM January 07, 2011
Gary of SC 6:56PM October 25, 2010
Nora of CT 4:55PM October 25, 2010