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> It was essentially, when it was novel, a new acquisition channel. It also had a touch of loan-sharking from what I understand. I could be wrong about the exa
by CPLX 11y ago
> It was essentially, when it was novel, a new acquisition channel.
It also had a touch of loan-sharking from what I understand. I could be wrong about the exact details but I believe one of the main attractions was that a business could do a Groupon, and get all the money from the Groupons sold as soon as the promo was completed, but still have weeks or months for the customers to actually trickle in and claim the offer. Which may have led to a lot of the frustrations people had actually redeeming them, getting on the schedule for massages or reservations, etc.
- dragonwriter 11y agoHow is that "loan-sharking"? Seems to be pretty much just run of sale of redeemable credits. Loan-sharking means that someone is making money by charging high interest rates on loans -- here, the "loan", insofar as there is one, is effectively from the customer to the business, and there is no interest being charged on it.
- CPLX 11y agoIt was intended as a euphemism, not a literal example of loan sharking. But the analogy holds. Selling something for 20% of its value with the expectation of having to fulfill the order in a few months is effectively the same as paying an extreme rate of interest on short term business financing.