I have many friends using Groupons, and other similar group discount sites, and they always seem very happy with the deals they are getting. They post links on Facebook for the deals so other friends can take advantage of low prices at restaurants, movies, spas or other products.
Time.com reports sites such as Groupon, BuyWithMe, DealSwarm, LivingSocial are projected to pull- in $5 billion this year.
But there is also an ancillary industry building up around these sites — the resale market for coupons that seemed like a great deal at the time but then the person realizes they really aren’t going to use it: it’s called “Groupon Remorse.”
“How often do group-coupon buyers suffer “Groupon remorse,” as the Globe calls it—when the initial sensation of “What a deal!” is followed by “Why did I buy that?” It’s hard to get an answer there. The coupon sites don’t reveal redemption rates, though one store owner interviewed in the Boston Globe story was told by two daily deal site reps that 20% to 30% of purchased coupons are never used. Mind you, it’s in the interests of both the deal sites and the businesses featured for redemption rates to be as low as possible: That’s money earned for no services rendered whatsoever. ”
“It’s easy to see how a coupon enthusiast might find it hard to use the occasional coupon, especially since they typically expire within a few months, and since they’re often bought on a whim. But the Globe chronicles some coupon buyers who completely went overboard and are swimming in coupons they’ll never use. One woman made a spreadsheet to track all of her coupon purchases and their expiration dates.”
“Why in the world do people feel compelled to snap up “bargains” they clearly don’t need, and that stand a good chance of never even using?”
“These daily deal sites have managed to bring excitement of the classic “limited-time only” marketing scheme to a whole ‘nother level. These deals make people feel special—that they’re on the inside, that they’re smart and savvy. What with the time constraints involved, there’s the risk of losing out if you don’t act quickly. And who wants to miss out on the chance to feel special, smart, and savvy?”
“There’s an expansive 12-part series on Groupon at RetailDoc, which was written mainly to warn businesses of the downsides of doing business with daily deal sites, but that also offers some insight as to why consumers go nuts for these deals:”
“In a depersonalized world where many are anxious about their jobs, their finances and their relationships, shoppers who use coupons are, by extension made to feel smart. “See how much money I saved,” is a way to say ‘I’m no fool.’”
I clicked on a Groupon link a friend posted yesterday for a half-price subscription to the AJC. The clock really does make you want to buy, buy, buy! And I did feel compelled to share the link too. (I was pulled away from my desk before I emailed it out to others but you do want to share the deal you found!)
I haven’t used Groupon or Deal Swarm (yet), but I think consumers can have similar experiences at stores like Costco. There’s no physical clock ticking down but you see these amazing deals and want to get it before you leave the store – do you really need 40 Capri Suns for $7? Do you really need a 3-lb bag of wings for $12 (examples are approximate)? But you’re there and you kind of feel like “Oh, I better snap that up.” So I don’t think it’s just on the group deal sites.
Are you using group deal sites? Which ones do you use the most? What have you bought on the sites? Have you taken advantage of every coupon you have bought? Have you ever had “Groupon Remorse?” Have you resold any of the items you bought? Have you wished you could resale?
– Therea Walsh Giarrusso, AJC Momania