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The only thing worse than Groupon's business practices with their merchants are the Groupon customers themselves. Groupon coerces local businesses into signing

The only thing worse than Groupon's business practices with their merchants are the Groupon customers themselves. Groupon coerces local businesses into signing up with ridiculously high discount rates with promises that it's "getting people in the door" -- the gut reaction of the business is to sign up and then maybe some of those people will be repeat customers! Except most Groupon customers only signed up because it was crazy cheap. A bouquet of a dozen roses for $10? They'll buy that. But a regular price bouquet at $40? Nah. Very few will be repeat customers, and likely not enough to cover the loss that Groupon's high discount cost the merchant. Also, Groupon takes anywhere from 40-60% of the deal, plus a "credit card processing fee" that's usually 3-4%. Also, a big mistake (in my experience with Groupon) is that they do not have an API for merchants to use. They should have allowed point of sale developers to integrate with the Groupon redemption system. As it is now, the whole redemption system can be a royal pain for a small business to account for correctly in their POS system.

potatolicious 14y ago
I agree Groupon is a terrible deal for many (most?) businesses, but it's not coercion. Nobody held a gun to these businesses' head and forced them to sign up, nor threatened them, nor anything really. They sold these merchants a fairy tale about repeat customers - a too-good-to-be-true fairy tale that merchants failed to verify on their own, and got burned. Now sufficient people have been burned that many merchants no longer take Groupon seriously. That's fine, and that's the system working as intended. > "They should have allowed point of sale developers to integrate with the Groupon redemption system." This is much, much bigger thing than you suggest. For one thing, most "point of sale systems" at small businesses are cash registers. They don't get firmware updates, much less an internet connection and programmability. For point of sale systems of higher sophistication (a restaurant, say), these systems are highly custom, closed as all hell, and integrating anything into them without the express an dedicated intent of the original vendor is pretty much impossible. This is also why all attempts to disrupt the restaurant reservation/management space have been so far unsuccessful. Integrating web-age software into extreme legacy meatspace systems is pretty much the hardest problem that could be presented to a consumer internet company. Groupon can pull every engineer they have into this, chew on it for 2 years, and barely make a dent. Hilariously enough, the feature you're talking about is bigger than most companies.
- eclipticplane 14y ago
  That's true, I used the wrong word. Groupon sales reps are dishonest, though. We have roughly 80 offices in a bunch of states, and we have a national rep with Groupon who managed all of our standardized deals. However, local reps would still call each local office and try to sell them, and would quote sales rates and repeat customer rates to offices -- numbers that Groupon had no way to obtain, and were so far off the mark it bordered on being hilarious. Another factor is that many businesses that try these steep discount programs is that they are already on the rocks. Another factor that bites merchants: refunds. Supposedly, when you mark a Groupon code as "redeemed", Groupon won't refund the customer's money without contacting you first. However, they sometimes still refund the money and try to deduct it from your final check (which, for most merchants IIRC, is 60 days after the close of the deal). This causes a lot of headaches for merchants that have hard costs with their deals (product, inventory, etc). Sadly, some number of Groupon customers request refunds even after redeeming their deal. They are stealing, basically, and the merchant is the one that suffers. > api stuff (couldn't find a good quote to pull from your awesome points, sorry!) That's true for a lot of those markets you mentioned, definitely. A full-fledged API would likely be difficult. There are other businesses that would benefit, though, particularly some franchise units that are starting to use web-based POS systems (per the last International Franchise Assoc conference I attended). If you were a local franchisee of a tanning salon, and your franchisor-provided POS were Groupon-compatible, I'd think you would be more apt to sign up. The merchant console for Groupon is actually very basic, there's not a lot to it. You sign in, view your deals, and can mark individual Groupon ID#s as "redeemed". We wrote some terrible code to mock it into an API for our franchisor system, using screen scraping and other monstrosities I am NOT proud of. Do not open groupon.py.

potatolicious 14y ago

I agree Groupon is a terrible deal for many (most?) businesses, but it's not coercion. Nobody held a gun to these businesses' head and forced them to sign up, nor threatened them, nor anything really. They sold these merchants a fairy tale about repeat customers - a too-good-to-be-true fairy tale that merchants failed to verify on their own, and got burned. Now sufficient people have been burned that many merchants no longer take Groupon seriously. That's fine, and that's the system working as intended. > "They should have allowed point of sale developers to integrate with the Groupon redemption system." This is much, much bigger thing than you suggest. For one thing, most "point of sale systems" at small businesses are cash registers. They don't get firmware updates, much less an internet connection and programmability. For point of sale systems of higher sophistication (a restaurant, say), these systems are highly custom, closed as all hell, and integrating anything into them without the express an dedicated intent of the original vendor is pretty much impossible. This is also why all attempts to disrupt the restaurant reservation/management space have been so far unsuccessful. Integrating web-age software into extreme legacy meatspace systems is pretty much the hardest problem that could be presented to a consumer internet company. Groupon can pull every engineer they have into this, chew on it for 2 years, and barely make a dent. Hilariously enough, the feature you're talking about is bigger than most companies.

eclipticplane 14y ago
That's true, I used the wrong word. Groupon sales reps are dishonest, though. We have roughly 80 offices in a bunch of states, and we have a national rep with Groupon who managed all of our standardized deals. However, local reps would still call each local office and try to sell them, and would quote sales rates and repeat customer rates to offices -- numbers that Groupon had no way to obtain, and were so far off the mark it bordered on being hilarious. Another factor is that many businesses that try these steep discount programs is that they are already on the rocks. Another factor that bites merchants: refunds. Supposedly, when you mark a Groupon code as "redeemed", Groupon won't refund the customer's money without contacting you first. However, they sometimes still refund the money and try to deduct it from your final check (which, for most merchants IIRC, is 60 days after the close of the deal). This causes a lot of headaches for merchants that have hard costs with their deals (product, inventory, etc). Sadly, some number of Groupon customers request refunds even after redeeming their deal. They are stealing, basically, and the merchant is the one that suffers. > api stuff (couldn't find a good quote to pull from your awesome points, sorry!) That's true for a lot of those markets you mentioned, definitely. A full-fledged API would likely be difficult. There are other businesses that would benefit, though, particularly some franchise units that are starting to use web-based POS systems (per the last International Franchise Assoc conference I attended). If you were a local franchisee of a tanning salon, and your franchisor-provided POS were Groupon-compatible, I'd think you would be more apt to sign up. The merchant console for Groupon is actually very basic, there's not a lot to it. You sign in, view your deals, and can mark individual Groupon ID#s as "redeemed". We wrote some terrible code to mock it into an API for our franchisor system, using screen scraping and other monstrosities I am NOT proud of. Do not open groupon.py.