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It was the last straw.

I stared at the pleasant and vibrant green and white packaging on my “refurbished” Jawbone. Fresh from Groupon, it refused to function. After dropping a meager $50 or so on outdated Jawbones for myself and Mr. Picky Pincher, I made a vow.

“Never again, Groupon. Never again.”

Of course, I went running back. In two months I was using Groupons again.

And swearing profusely.

Let’s chat about how Groupons can be both a blessing and a curse for people who are trying to actually save money.

What are Groupons?

Groupon is an site that offers discounts to its users for local services, entertainment, and discounted goods. You can snag movie tickets, spa appointments, oil changes, and a helluva lot more for discounted rates on Groupon.

The site works because local vendors want to lure in new business with discounted rates, hoping to give you an A-plus experience so you’ll become a regular customer. Of course, Groupon takes a cut of business proceeds as the intermediary between the business and the customers.

To purchase a Groupon, you create an account and flip through their categories of services and goods. You purchase, say, a $20 photo shoot and pay online. To redeem a Groupon, users simply scan the Groupon at the register. The purchase and use process is relatively simple, and many of the deals make normally pricey experiences affordable.

mani pedis through groupon

I’ve had an on-again, off-again relationship with Groupon over the years. How could I not want a mani-pedi for 50% off the normal price? It sounds like a money-saving maven’s dream come true! When I got married, I relied on Groupon savings to score affordable engagement photos and even wedding hair and makeup. It made high-end services that were normally out of my reach attainable, and it was addictive.

I’ve had some incredible wins with Groupon, but also some unbelievable flops.

This leads me to wonder: are Groupons a good deal, or are they a gnarly frugal enemy?

Are Groupons Worth It for Customers?

I gotta hand it to Groupon.

They’re masters at luring in customers with promises of 50% off deals on anything you can think of. Want to go indoor skydiving or learn bread-making? There’s a Groupon for it! And even if you discover bread-making isn’t your thing, who cares?! You paid $15 to try it out; no harm done. Sounds like a lot of fun, right?

Not always.

I was a Groupon customer for four years. Or rather, it would be more accurate to say I was in a bad relationship with Groupon for four years. They would piss me off, I would leave them, and they would reel me back in by whispering sweet sales in my ear.

Over and over.

As a customer, a Groupon could be a great deal. I spent $15 on a 4-hour class that taught me how to crochet. I was able to apply those skills and make hats and scarves for my family for Christmas, which saved me a lot of money.

I also got Groupons for Zumba classes around town to try out new gyms for pennies. $20 for two months of unlimited Zumba classes? Why yes, thank you.

I even ordered bedding for both of our beds from Groupon Goods, which I’m still pretty satisfied with.

On the other hand, I’ve had my fair share of Groupon flops.

I mistakenly signed up for a bead-making class that only met on Tuesdays at 10 am. That’s great, but if you have a job, it’s a touch inconvenient. While that was totally my bad, the refund experience was a nightmare.

The same goes for a facial I paid for. The refund experience was so horrible and convoluted that I finally just gave my Groupon to a friend out of pure frustration.

Some of the Groupon Goods, like the Jawbone, have been absolutely disappointing and low quality. One of the Zumba gyms turned out to be absolutely awful, but I had already paid for two months of classes, so I was stuck there.

My negative experiences with Groupon varied. Sometimes I had an issue with Groupon’s policies (gotta read that fine, fine print) and sometimes it was the vendors themselves.

Everyone’s experience will be different depending on where they are and what they buy.

So the bottom line here: Groupons can be worth it if you always read the fine print and are very careful about the Goods you buy. 

However, if you’re on a super-tight budget, I would recommend steering away from Groupon. I’d hate for you to have a negative experience and be out the money.

For example, when I had just graduated from college, I remember counting dimes and nickels because I could barely afford groceries. I was getting accustomed to the hard adult world and wanted a moment to treat myself. I was on a very strict budget, but nonetheless treated myself to a Groupon facial, which turned out to be a nightmare. The $50 I wasted on Groupon could have fed me for more than a week. I was so angry at myself for making such a big, stupid mistake.

Sometimes it’s better to forgo these experiences if you aren’t sure they’ll actually save you money. If you aren’t willing to lose a little money, or deal with a negative experience, it’s best to avoid Groupon.

Why Groupons are bad for small businesses

I’m concerned with Groupon beyond their spotty quality.

The main issue is that Groupon is bad for small businesses. Many businesses say Groupon is a great way to get people in the door, which can be true. I once tried to get an oil change with a Groupon and the mechanics couldn’t pencil me in for three weeks! Talk about busy.

But there’s a problem with the nature of Groupons and the people who purchase them.

groupon is bad for small business

Groupon users are focused on deals.

They sign up for, say, a haircut through the deal site for $5. They pay their $5 (with no tip) and never return to the small business again. The customers are typically focused on saving money right now. It’s not always about finding a great new salon, like businesses hope.

As an avid former Grouponer, I’m guilty of this. I got highlights done for $20 and didn’t tip–even though I now realize I definitely should have, especially since the lady did a fantastic job.

I would only dine at a restaurant when a Groupon was available for the meal. I would never sign up for a Zumba gym membership, defaulting to commitment-free and affordable Groupons instead. Once the Groupon period ran out, I never returned.

But this “cheap cheap cheap” approach that consumers (like me!) adopt is hurting small businesses. If we take advantage of promotional pricing and don’t become repeat customers, we’re bleeding these businesses dry.

This isn’t to say that Groupon itself is bad, but businesses should understand that deal-seekers use the site and are unlikely to build sustainable business over time.

If you do choose to shop on Groupon, make sure you give the business a fair rating after your experience and write a review. I’m guilty of doing this only when I had a negative experience, but businesses thrive on positive reviews, especially when they do a good job. The best way we can reward good businesses is to continue giving them our money, either now or once we can afford their full-price services.

The other Groupon problem

Groupon seems like a money-saving blessing. But, just like my experience with extreme couponing and impulse shopping, Groupons encouraged me to buy things I truly didn’t need. I splurged with money I didn’t have on services and goods that didn’t further my money goals.

I get that Groupon is in the business of making money. But this service easily enables people to buy things we don’t need. I used Groupon to fill a perceived void in my life when I was vulnerable and not making positive decisions with my money.

having a blast with groupon

It’s all fun and games until you can’t afford groceries, friends.

It’s fine if you want to buy a Groupon as an occasional treat, but avoid falling into a cycle of consumption to preserve more of your hard-earned money.

When in doubt, wait it out: I trained myself to wait a week before buying a Groupon. I quickly learned that lash extensions and kayaking weren’t worth the extra expense, tempting as they were.

The Bottom Line

Is Groupon worth it?

I think it can be, but customers have to be careful. We should understand first how Groupons affect small businesses and how they can affect our purchasing behavior. I personally believe that decent Groupon deals are a diamond in the rough, and that it should generally be avoided.

We want to know: Have you tried Groupons? Do you think they’re worth it?

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