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From two years ago, submitted here to Hacker News, an article "Why Groupon Is Poised for Collapse"[1][2] identified problems for Groupon's customers in Groupon'

From two years ago, submitted here to Hacker News, an article "Why Groupon Is Poised for Collapse"[1][2] identified problems for Groupon's customers in Groupon's business model. My comment back then noticed something interesting in the article: I think this is the most interesting paragraph in the submitted article: "As critical as I am of Groupon, the slam dunk case is to sign up with Groupon if you’re going bankrupt. I strongly encourage every business that is about to go under to call Groupon. (Don’t tell them Rocky sent you.) It makes total financial sense--as a Hail Mary play. If you’re lucky, the upfront cash will be enough to help you stay afloat. If not, well, you were already going out of business. It may be your best option. In the short term, you’re actually helping Groupon because they’re being valued on revenue and no one is taking into account risk." If word of this gets around, the incentives set up by the typical Groupon agreement with a merchant will be responded to by merchants for whom those incentives are the most perverse. Groupon may discover that it is inexorably moving into the business of last-ditch financing for failing businesses. [1] 13 June 2011 TechCrunch story by Rocky Agrawal: http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-collapse/ http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-c... [2] Hacker News discussion of story: https://news.ycombinator.com/item?id=2649739 https://news.ycombinator.com/item?id=2649739

maratd 13y ago
This is actually optimistic. There's an assumption of hope, a possible light at the end of the tunnel. I purchased a voucher for a Sushi restaurant in NYC on LivingSocial. Two days after purchase, I went to the place for dinner. I was surprised to find the place closed and a big sticker from the State of New York on the door stating that the property has been confiscated due to failure to pay their taxes. Somehow, I think the proprietors knew what was going to happen and when ... and scheduled things appropriately. I got a refund, but I'm not sure LivingSocial did.
300bps 13y ago
Knowingly entering into an agreement before declaring bankruptcy is fraud. Debt incurred through fraudulent acts is likely to not be discharged through bankruptcy. http://www.bankruptcylawnetwork.com/bankruptcy-discharge-and-debts-incurred-by-fraud/ http://www.bankruptcylawnetwork.com/bankruptcy-discharge-and... You could collect a lot of money through Groupon, declare bankruptcy, Groupon could object to the discharge of the money you owe them, the judge could refuse to discharge the fraudulent debt and then you would find yourself having gone through bankruptcy but still be in debt.

maratd 13y ago

This is actually optimistic. There's an assumption of hope, a possible light at the end of the tunnel. I purchased a voucher for a Sushi restaurant in NYC on LivingSocial. Two days after purchase, I went to the place for dinner. I was surprised to find the place closed and a big sticker from the State of New York on the door stating that the property has been confiscated due to failure to pay their taxes. Somehow, I think the proprietors knew what was going to happen and when ... and scheduled things appropriately. I got a refund, but I'm not sure LivingSocial did.

300bps 13y ago

Knowingly entering into an agreement before declaring bankruptcy is fraud. Debt incurred through fraudulent acts is likely to not be discharged through bankruptcy. http://www.bankruptcylawnetwork.com/bankruptcy-discharge-and-debts-incurred-by-fraud/ http://www.bankruptcylawnetwork.com/bankruptcy-discharge-and... You could collect a lot of money through Groupon, declare bankruptcy, Groupon could object to the discharge of the money you owe them, the judge could refuse to discharge the fraudulent debt and then you would find yourself having gone through bankruptcy but still be in debt.