Group Buying: Frugally Chic or Scam?

Photo Credit by Paula Marttila

Who hasn’t heard of clipping coupons or printing them from online coupon sites? For a frugal or budget conscious person, every little saving counts and group buying seems to take frugality to the next level. Think about eating in a cool local restaurant, having your nails done in a chic spa or getting as much as 50% in your local organic food store; all these are possible with group buying!

Group buying sites like Groupon and LivingSocial allow bargain hunters to sign-up for free and get as much as 70% on daily deals. So what is the catch? For each deal the buyers has to reach a certain number before the selling deadline otherwise the deal is off. Everything is up for grabs: meals in restaurant, time in a spa or salon, concerts, family activities, food takeout and delivery, even adventure escapades and vacations. Discounts for clothes and shoes are also available. The nice thing about these group deals is that they are tailored to each city where they are offered. These deals are marketed in a way that lets buyer discover the local businesses in their area. If a buyer travels she can simply access the site and change the location to the city where she is located to view the deals in that city.

Buyers who have tried the deals swear by their authenticity and value for money. A lot say that the deals, especially on food allow them to try local restaurants which are otherwise not within their budgets. Since majority of the deals target women, group deals have become a chic but frugal way to relax and bond with women friends and relatives over food, spa and salon treatments.

Although it’s true that group deals have cultivated loyal, bargain hunters and a lot are always on the lookout for each daily deal, how come we still hear bad press about them? Buyers complain that there are businesses that do not honor the vouchers, give bad service to voucher holders or deals are not they signed-up for. Let’s also try looking at the other side of the story, that of the businesses where the deals are redeemed.

If there are deal hunters delighted over the huge discounts, there seems to be local businesses crying scam! BBC News reported on a fruit and vegetable delivery service based in Sussex who signed up on a group buying scheme, was unable to cope with demands and lost money due to refunds. Same kind of complaint is echoed in some small businesses in the US who participated in group deal schemes. There are also reviews that say group deal buyers are in it strictly for the deal only and are not really repeat or loyal customers in the long run.

Well, whichever side of the fence you are on one thing remains clear: always read the fine print and know for sure what you’re getting into. This is true whether you’re a deal hunter or a business owner. No exceptions!

Filed Under: Frugal

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