Why I won't be using Groupon again.. A consumer perspective.

I see 5 problems:

1. An offer for "Pay $X for $Y of Z" have at least anecdotally led to people spending $X+(small number) where a lot of those who offer such deals are expecting more (the Gap was a notable example of this). Perhaps a better model is a capped percentage discount on the bill?

2. Evolving social etiquette of tipping. It may simply be that people are unaware that the right thing to do is probably to tip on the undiscounted price. Or it may simply be that those who are inclined to use Groupons are simply cheap. I expect it's a little of both;

3. No caps on offers is a big problem. It means businesses can't budget what are basically marketing expenses. For this to work you need to be able to track individual offers (so a person can't use the same offer twice). This has the added advantage of you being able to mine this data as you know who used an offer, when they did, what they spent, what other offers they've taken and so on;

4. Businesses seem to resent people using these coupons. This I don't get (other than the complaints of wait staff). It's a marketing expense. If a Coolhaus truck can sit a block away from my office in downtown Manhattan giving out free ice cream sandwiches for several days (raising awareness and creating a lot of good will) then you, as a business, owe yourself this: leave the customer happy. If they're unhappy you've just wasted your marketing spend on them; and

5. Having to ask for the offer upfront is BAD. It's awkward. It leads to at least the suspicion of getting smaller portions or otherwise getting the cheap version. It probably means you'll get worse service. The offer should simply be X% off a bill (max value $Y). Exclude alcohol entirely.

Honestly I expect Groupon to sink into the ocean. Businesses don't seem to like it. Consumers are having mixed experiences. The early investors have been paid off with large F/G rounds. Revenue per customer is decreasing. What Groupon is doing isn't exactly rocket science. I kinda see small investors being left with the bill for all this post-IPO.

It's a shame really because I see such things as a great way to promote a restaurant (which is actually hard).

I have no idea whether you're supposed to show it up front or not either - it didn't say on the voucher. I felt as though I should at least tell them.

Yeah, it's already common to not tip anyway. Sometimes I tip, sometimes I don't (though when I do, I'm more generous than the standard 10%).

I'll certainly watch the IPO though I won't be participating. My understanding is that they think they have a competitive advantage coming from the Groupon voice https://docs.google.com/View?id=dmv9rbh_2g92x4scj&pli=1&... - the way the write their ads.

Sorry to hear about your experience, but to be fair, I have to admit that I personally had just one bad experience in about 25+ visits of restaurants in Germany and Austria due to Groupon and Daily Deals offers. That location turned out to be overcrowded and the staff rude.

The other visits were pleasant or at least we had no complaints afterwards. We DID go back to some of the restaurants (even without coupons) and recommended some to friends. Some others aren't really nearby, so we might not visit them again, but I'd recommend them as well.

However, I first google for reviews of the restaurants/companies before buying a deal. I'd not buy a deal for a restaurant with no or only mediocre reviews. And I present my coupon before ordering - that would have saved you from the bad experience with the first bottle of wine.

Of course, it greatly depends on the restaurant. If they don't plan the Groupon project, they may get overrun shortly after the deal. And the tip problem is already mentioned - so staff isn't always glad about "deals customers." I've even heard discussions with "deals customers" on a neighbor table that insisted of getting money back because their bill was lower than the deal.

Worst I experienced was not with a restaurant but a deal for a walking tour. The company was totally overbooked, promised to provide more dates for tours, but never delivered. Even 6 weeks after the deal, customer service turned out to be great and refunded the deal promptly.

A friend of mine bought a deal from a small photo studio (90% discount) - and yet (about 5 months after the deal) waits for a confirmation for an appointment: "We are fully booked until at least end of next month." Hopefully, the studio will be still in business at the time he gets an appointment (or he gets a full refund).

Its not Groupon or Daily Deal to blame for bad experience, but the business owner. But due to the growing popularity of the deals, places are more likely to get crowded after a deal. And because Groupon and co think that "the more, the better", they approach businesses as well that don't deliver great service all the time or are just unable to handle the amount of deals sold.