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I Suggest Groupon Offer Coupons To It's IPO Investors, They're Going To Need Them
This post is an example of what a little investigative reporting
should look like. Let's attempt to recast pop media in the form of a
smart ass blog. First, a glimpese of what's in the news today, as the NYT Deal Book column reports: Accounting Change Cuts Groupon’s Revenue
Groupon
disclosed a major accounting change on Friday, essentially halving its
once-jaw-dropping revenue after it encountered resistance from
regulators with its filing to go public.
Groupon,
the online coupon titan, announced separately that its chief operating
officer of about five months, Margo Georgiadis, had stepped down.
The
changes in the revised filing and the executive departure are likely to
spur additional questions about Groupon, a much-envied rising star in
the constellation of new Internet companies. The company has grown
rapidly, but its ability to sustain that growth, the ways it measures
growth and the eccentric public persona of its chief executive have come
under fire at times.
Despite
those criticisms, and the current turmoil in the stock market, Groupon
is still aiming to go public next month, people briefed on the matter
have said. That offering could value Groupon at more than $15 billion.
The company’s revised filing
for an initial public offering also incorporated portions of a
memorandum sent to employees by the company’s chief executive, Andrew
Mason, that were subsequently leaked to the press. Analysts had
questioned whether that letter ran afoul of a mandatory “quiet period”
for companies seeking to go public.
The
revenue accounting change is Groupon’s second since it filed to go
public in May. Early last month, it removed references to an accounting
metric that critics said misleadingly showed the company turning a
profit.
In
its latest filing, Groupon says that it has restated its financial
results for the last three years “to correct for an error” in the way it
reported revenue. Before, the company reported as revenue all the money
it collected from customers, including cash that was later paid out to
Groupon’s merchant partners.
Now, Groupon is reporting what it calls “net revenues,” which exclude the retailer payouts.
For
example, in a version of the prospectus filed last month, Groupon
reported $1.52 billion in revenue for the first six months of the year.
In Friday’s filing, that number is now called net revenue and is $688
million. The original $1.52 billion figure is now counted as gross
billings.
Groupon’s accounting change is the inverse of what Google
did before its own public debut in 2004. The search giant initially
excluded cash that was shared with distribution partners in its revenue
figures. It later changed its revenue to include those payouts.
Groupon: Accounting Shenanigans That Can Make A Leprechaun Blush! - OR - I Told You Not To Trust These Guys!!!
Social
networking stocks are the current obsession for Wall Street bankers.
Groupon, LinkedIn and Facebook - a trio of Internet darlings, are
absorbing market value and could even eclipse the market value of
internet gaint Google. There are also host of other internet startups
including Pandora (a music streaming service), HomeAway (online
vacation-rentals company) Zynga and PopCap (social gaming sites) that
are planning to test their fortunes at Wall Street. After LinkedIn which
debuted as one the most expensive IPO (yet one of the most successful)
in the American history based on the ratio of its market value to its
yearly sales, Groupon has filed its IPO filings to test the market
appetite for internet start-ups.c
In our June blog post and forensic analysis of Groupon “What Does Groupon and the Matrix Have In Common?” we
contend that the company’s revenues were not an appropriate measure to
compare with its peers for valuation purpose as the company was
overstating its revenues in its books of accounts as the revenue from
Groupon were on gross basis while the appropriate comparable measure was
gross profit which was the amount the company retained after paying its
subscribers. Our contention was valuing the company on price-to-sales
and looking at the “hyper” sales growth would make valuation look overly
optimistic; besides other investment theses that were highlighted –
falling revenue per subscribers, slowing growth rate, the flawed
business model and competitive pressures, investors disconnect between
value and risk, and of course the valuation.
Abstract from our June subscriber-only analysis - Groupon Forensic Analysis & Valuation (923.04 kB 2011-06-16 10:34:36):
“Groupon’s revenue consists of the gross amount paid by customers for purchased Groupon while gross profit is the amount that the company retains after paying its merchants
an agreed upon percentage of the purchase price to the featured
merchant. So the comparable number for price-to-sales to use for Groupon
is gross profit, or the fees it collects from merchants, which the
management has correctly stated as the best proxy for the value created
by the company. To put things into perspective, if eBay used the same
math as Groupon does, it would have reported revenues of $61bn instead
of $9bn. The company reported gross profit of $530m over last 12 months.
At $25bn valuation that would put the valuation at 42x “comparable
sales”. To put things in perspective, Google trades at Price-to-sales of
5.8x, Apple at 4.7x, Microsoft at 3.3x, Amazon at 2.6x and Yahoo at
3.4x.“
In
the latest S-1 registration statement, the company has revised its
revenue figures by more than half. The company has restated its 2010
revenues from $713m to $313m while Q1-11 revenues were restated to $296m
from $645m previously. The company has restated its financial results “to correct for an error”
in the way it reported revenue. The revenue accounting change is
Groupon’s second since it filed to go public. The company has also
changed the presentation of certain expenses to be consistent with
reporting revenue. Clearly, such errors and frequent change in the
accounting policies clearly puts strain on the credibility of management
– and that’s putting it lighlty, especially for a company that is
contemplating an IPO, not to mention that such changes are top line
numbers such as revenues. In another blow to Groupon, the company’s COO
Margo Georgiadis is leaving the firm to join back Google.
BoomBustBlog subscribers (click here to subscribe)
who are being pitched this IPO by their all so trustworthy bankers and
brokers should feel free to download our update to the Groupon piece 
Groupon Revenue Restated,
and don't forget to show a copy to those who are all so trustworthy.
Speaking of the "Oh so trustworthy", my next post will DROP THE BOMB on
said industry as the guy with a pretty good track record in calling
bank failure updates the post The Next Step in the Bank Implosion Cycle! Oh, those Name Brand Banks are going to get bashed as BoomBustBloggers get enriched!
»
- advertisements -
an animated devil playing andrew mason:
http://www.youtube.com/watch?v=z0wk8V859_Q
Amongst other things, I run a successful restaurant in Washington, DC.
These clown's were pestering us for awhile. The equally clown-ish fools at the corporate office "think we should be a part of social networking". I tell them, "We are. It's called 'Word of Mouth; Open Table User Reviews; Trip Advisory; Yahoo Reviews; Google Places'."
Then, I mention that maybe we should allocate our time and other resources to making more entertaining food. And, maybe it's not a good idea alienating our regulaar customers for a bunch of broke-ass, cheap, quick shot artists.
Groupon - what a flash-in-the-pan this IPO is going to be...
Crap-obam. Beat me to it. Milestones
Making money on people on food stamps is a crime!
I'll cook my own burgers and avoid the cook's eyelash in my soup. Fuck Grope-on. Whatever happened to cooking for your own lazy ass...?? The savings are incredible !
Groupon has great deals. I'll enjoy them while the company tanks. They make stocking up for tough times much less expensive.
ROFL! Awesome post!
Not Sound Business, Sound Business = Find Customers who CAN actually pay, then offer LOYAL customers Discounts. Dooooh!
Offering 50% off and only getting paid 50% of the 50% is not a sound business plan, unless your selling crack and its virtually guaranteed the "customer" will return to YOU.
Or do ya'll really think your business has No competitors that might try groupons or other sales? Naaaa...that customer who used a groupon wasnt looking for a great deal, they were really looking for someplace new to eat at, or get that massage they really wanted....riiiiiight...and Ive got beachfront property in AZ for you too.
I love all the defenders of Groupon on here...non of you defenders have accepted a groupon at your own business have you? Didnt think so. And as for "finding" restaraunts you never knew existed...how many? really...? C'mon....do you not know your area that good? Did the Groupon make their food "look" or "smell" better? or were you simply 'taking advantage' of a 'Killer Deal'...be honest.
as for Massages, etc, let me break it down for ya'll:
Typical massage business makes 10-15% Net profit after all expenses.
Groupon: $100 Massage - $50 Groupon - $25 goes to Business, expenses = $85 = $60 Loss for Business. ($25 income - $85 expenese)
Non-Groupon: $100 Massage - Business makes $15.
How many customers does business need to have in order to pay off that $60 grouon loss @ $15 profit/customer? = 4.
In other words, the business gets to use up theri rooms, time, overhead, etc for 5 customers, just to BREAK EVEN on One Grouon Coupon. Hell at that rate, ya might as well close the doors for a few hours...seriously.
My oh My...How exciting...me wants to accept Groupons Each and every day! Hoorayyyy...the world is saved.
Suburbs to Slums:
http://money.cnn.com/2011/09/23/news/economy/poverty_suburbs/index.htm?i...
The wonderous results of zero down mortgages.
I disagree that Groupon has no current value in our marketplace. I have used Groupon to try some restaurants I would have never tried before, and plan to do so again (assuming it can still operate under our macroeconomic circumstances)
Groupon provides a value in looking for some small restaurants that can afford to take a hit in profits for more visibility, and therefore may increase their aggregate profit by increasing the amount of customers to walk in the door and recognize it. Obviously, the merchant loses on the first transaction, but if the interaction is good and the customer is quite satisfied and returns again, this would provide the merchant a significant exposure benefit. The cost benefit ratio, therefore, is [breakeven = - (profit per customer x customer frequency)/initial loss ]. If customer comes in enough times to breakeven, then the merchant wins. Therefore Groupon's utility is customer meets merchant and providing an interaction and further transaction. Groupon's value added will be anything above breakeven. Groupon therefore provides market efficiency.
I do believe, however, that Groupon's IPO should not be astronomical, as it does not improve market efficiency to the point of rivaling Google, Apple, etc. It provides a service, yes, but a marginal one. It should strictly stay what it is, ie a social site where merchant woos customers.
If it is valued at 20 million$ market cap, I would agree.
I own a small business. and will NEVER, EVER...EVER offer Groupon Coupons. I looked into it, as well as Living Social, and they are a joke.
By your Own admissions you "tried" those restaurants and intend to try others as well...And UNLESS you become a regular Patron of that restaurant that you NEVER went to before, then its a massive loss for the business, as it will require multiple visits, at least 3 or 4 more visit from you, Just for them to Break Even.
Groupon forces the business to offer its product or service for 50% price, and Groupon keeps Half of what the coupon buyer pays for...thats a Bare minimum of 75% off...or, in Business terms, it would require 3 other people purchaing at full price just to break-even if that.
And, in a recent Study, more than 80% of people who use Groupons say they do so specifically to save money, not to find new places, and buy groupns for business they ALREADY eat or Shop at - Read it again - the VERY thign Groupons are intended to do - attain NEW customers, isnt working.
The Same study also surveyed businesses who used groupons, and the businesses reported that less than 20% of people using Groupons have returned after the initial visit...Further proving all groupns do is BLEED money from the small business to Groupon by finding the cheap-skates out there who ALWAYS seek rock-bottom deals.
Ive used Groupons...and every place Ive used them at Ive already been to, after I found out how they work, I refuse to use them.
Groupin is a fad, and a bad one, and will pass. Business need to seek sound business plans, not rely on mega-sales to "pull" in customers...as people who shop super-sales, usually always look for the next big sale, no lyalty except to their own wallet. Justifiably so.
I'm also seeing coupon deals come from amazon. How much longer till many others jump on this boat?
There is so much competition now from every angle that soon Merchants will have more leverage if they decide to use it. But as a IPO, Nah, this is like Commerce One in 1998. Larry Ellison referred to the +100B market company as a "feature", not a company. I can see this service being offered by someone like Amazon who has multiple sources of revenue and doesn't need to burn the small business owner with some huge discount where Amazon gets half.
On top of all that , Merchants take a huge risk in using Groupon if their staff isn't trained or available to handle business spikes or the the service offered requires skill sets that aren't found in a temp agency. That means regular customers are pissed off when the Groupon customers are getting a 50% deal because the price they6 aren't getting plus the service is taking so long. Never underestimate some pof the stupid on the part of consumers. There is a large bunch that assume Merchants have pennies in something they offer for many dollars. If it's good service that is the prime selling point, then watch that deteriorate over a period of months as many coupons can be sold but there is no telling when people will show before the expiry date.
Some People like to clip coupons who are probably the same people who buy this stuff. One can go out of business pretty quick especially if coupons are stackable.
Short it with conviction. Max margin after the reality sets in.
Another good thing for merchants is that they can often upsell when the client comes in. I've used Groupon for many a meal, but very few, if any, ever were covered by the Groupon totally. I usually wind up with $25 off of a $65 bill. I walk out having paid $15 in cash at the restaurant (plus my $25 for the Groupon, but that was MONTHS ago...) and feeling like I still got a good deal.
But I still think viability will require a 10-20% rake rather than 50% to make it work out for enough merchants as we continue to sprial into global depression.
Barry Florescue says Hi....
ItsDanger says: I feel the accounting issue is overblown somewhat.
I totally agree !
While, just the other day, I was over at Arthur Anderson visiting a buddy who told me the same thing !
ROTFLMAO !!!!!!
I think you mean Arthur Andersen.
This post is making a mole hill into a mountain. GAAP accounting is not always black & white, management's judgment is always an issue. Any financial analyst would have considered the gross vs. net revenue.
If Reggie wanted to provided some value ad to this website, he should have given the background on what Groupon's management would have to consider.
The Emerging Issue Task Force (EITF) set up a number of guidelines for this in their issue number 99-19, "Reporting Revenue Gross as a Principal Versus Net as an Agent.” Please note that these are guidelines, so recording at gross or net is a matter of judgment. The guidelines that point you in the direction of reporting revenues at gross are:
The EITF also created several guidelines that point you in the direction of reporting revenues at net. They are:
It looks like these guys wrote ("whistleblew") to the SEC on Groupon and highlighted the issue, maybe we should be giving them the credit http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/327
Well, Reggie believes he provided value add to the website. After all, if you looked at this as an investor in lieu of an accountant, you would realize that Groupon is being valued at a multiple of revenues (growth), hence those revenues do indeed make a difference - fictitious or otherwise.
The comments above this line on how Groupon will severely hurt overall profitability to get "new" customers and sorely annoy the regular customers are well put.
My local newspaper has something similar to the Groupon deals as a single item for a single day. I feel uneasy in using them because of the huge hit to the business that in most cases I already use.
It is like getting on an airplane for a MKE-LAX flight and having to listen to your fat assed government retiree seatmate tell you how her ticket cost is less than a quarter of mine.
A few days ago I bought a pair of 50% off deals for a moderately priced, but good restaurant that I occasionally patronize. They are going to lose big on me. I will tell them just why they are losing and why they should stop shooting themselves by using this type of coupon.
The car manufacturers have done the rebate thing far too many times so that any reasoning buyer will demand a fat rebate or just not buy anything at all.
Yet another good job for Reggie and the comments crew.
BTW, Reggie, I'd actually buy your service if you had a coupon.---kidding
What if you had a dumbed down version for those that only wanted the qualitative prose and not the quantitative analysis?
Don't hold your breath, my friend :-)
That would be a retail subscription, currently available.
I got wind of your site from the old Kitco board. If I had actually moved on your comments back then and bought LEAP puts I would have been rich by now.
I will have a look at the pay options as you do have a fine track record in the longer term, although the longer term is getting compressed each time that the can gets kicked.
Thanks again for the years of analysis.
3 thumbs up !
Speaking of accounting firms, the Big 4 are about to become 3
http://www.bloomberg.com/news/2011-09-26/deloitte-touche-sued-for-7-6-billion-in-taylor-bean-collapse.html
i am greatly disappointed in this accounting change, i was hoping to have a large IPO price and short all the way to zero
Groupon, Ha, I just cancelled the non-stop e-mail barrage of stupid and ridiculous offers that would interest nobody other than the bonbon eaters of the world. I always find myself thinking “who would even participate or bother with this Crap”
Retailers Losing 50% on every one time only transaction ….. really!? Oh yeah, that’s going to last LMAO
Just like the house flippers who paid $500,000 more than the cost of building the house. Shaking our heads and wondering “how can this be”. We all know how that turned out.
No...Not Losing 50%...losing at least 75%.
Its HORRIBLE Business-sense at best. Groupon, Living Social, are leeches. They wont last too long, recent surveys of businesses using Groupon have revealed less than 20% of the groupon users expect to come back to the business...its just like throwing pearls before swine, and business will wise up.
I assume that when you question who would participate in this crap you are referring to the companies that offer the deals rather than the customers who generally get a 50% discount. While I don't have any reason to think that Groupon (as opposed to any other coupon site) will succeed or fail, there are a lot of retailers and other service providers for whom this kind of deal is attractive. Just this weekend I tried a restaurant that I would not have gone to without a Groupon, but having now eaten there I will likely return. The business concept for participating companies is not entirely without merit....
The business concept does have merit just as coupons do have merit. The problem is that giving 50% or more to a large group of people is not a sound business decision. Most of the Groupon horde will only go to a retailer making an offer. They expect to always get the same deal. You have to ask yourself, "Would I pay double for what I just ate every day?" Many times if you look hard enough you can get a similar item for the same price as your 50% off Groupon every day. I know a restaurant that makes a better burger for $7 than a place that charges $12. I may go to the $12 restaurant if I can get the meal for $6 but after that I will just go to the $7 place because the food is better and cheaper every day.
Why does it take a 50% off coupon for you to try a restaurant in your area? If it takes 50% off to get you in the door it probably means that you do not wish to pay regular menu price. Groupon is just guerrilla advertising. The companies participating need to weigh the cost of the discount vs traditional advertising. Groupon likes to claim they are better than traditional advertising because they can practically assure you it will bring business. However much of what has been found out is that Groupon business is not return business so the money was not well spent.
I wouldn't really care if Groupon just remained private, but going public is just another stock scam ploy to make insiders rich off the backs of normal people. That is the practice that needs to stop.
I'm not arguing the financial benefit to the participating companies, because I don't know what their ROI is in this program; I'm just saying that many businesses lure customers to their stores with loss leaders in the hopes that the customer will then spend a lot more money on that visit or will become a repeat customer.
My anecdote about the restaurant merely illustrates that point. Frankly, I live in an area with enough good restaurants to keep me happy, so when I read positive reviews about another place that required a short drive, I just opted for one of my walkable standbys instead. The Groupon offer got me into the car to try the place out, and I was so impressed that I will return. It's not that I wouldn't pay full price for the meal; it's that I wouldn't have paid full price to TRY it for the first time and risk disappointment. Now, with that risk eliminated, I'm likely to be a repeat customer.
Again, purely anecdotal, but I would imagine that other businesses who participate in this arrangement have similar stories. This in no way suggests that Groupon is a place put my investment dollars....
The trick with the 50% off is that Groupon keeps HALF of the amount that DOES get paid, so the retailer only makes 25%. Few businesses have that kind of markup available to them, so you see lots of deals for services, like massages, chiropractic, yoga, etc., where the worst that can happen is a period of slave labor for the sole proprietor, or no net revenue for owners of small shops.
IMO, the only way Groupon can survive another 2 years is to have them drop their "rake" to a reasonable amount and have the Groupons be closer to 40% off, so that the merchant can walk with 50 cents on the dollar. A lot of the deals are a little inflated anyway with free add-ons that you wouldn't buy or don't want anyway so they can hit their 50% off target, or have short expirations to try to push the number of unused coupons up.
In the meantime, yeah, I just bought an hour-long massage for $35... no happy ending, though.
Part of the problem is that they set a minimum, so the business is forced to offer the deal to many customers.
Other designs, like hotels.com for travel, only offer, say 10% of a hotels rooms at that price. The hotel gets people to try the hotel, the customer gets a deal, and the hotel owner knows he will only have to offer that price to a maximum of 10% of guests that night.
The business plans are almost completely reversed.
Groupon works only for certain types of businesses, or maybe for brand new businesses who really need new customers that first few weeks to get ANY cash flow they can. The harm to many businesses is that they do not have the margins to offer that many discounts at such a streep discount.
coupons are good for people who want to short the retail chains by using producer couponing to bypass them.
Unless you are in Tony Blair class and have coupons from JPM, Q-daffy, and all and sundry; publishers, lecture tours and Oligarchs. Then you are Uber-Oligarch after having been mere PM of King and Country. You know for sure after all this experience, setting up the Afghan rip-off, the Iraki WMD caper, the true pecking order of the global power Oligarchy.
Follow Tony's career and you understand our real world.
BOOKS, BANKS AND BENEFACTORS: How Tony Blair Became The Richest Ex-Prime Minister Ever
Read more: http://www.businessinsider.com/category/features#ixzz1Z5bksAif
And all he had to do was go to war with Saddam. The country pays and Tony gets rich.
I feel the accounting issue is overblown somewhat. Id rather see all the gross amounts anyways and make my own adjustments.
Groupon is a fine example of what Wall Street brings you.
yup
produce nothing and reap profits at the working mans expense
i think its a fad that will quickly wear off
'til then i will enjoy intro airplane flying lessons at fifty bucks each from all of the locals that are willing to rent their plane out to me for two hours at less than their cost of fuel
http://swingforceultra.blogspot.com/
Reggie looking forward to the next installments on Groupon and the banks.
I wanted so badly to short that POS Pandora but just didn't have time to execute the trade. I am going to work both sides of Groupon, selling calls and buying puts on this garbage.
Oh come on Reggie, internet companies don't lie about their sales. Zygna must have a really good reason for inflating sales, they must have forgotten to count something. Sales just can't be materialized out of thin air.
I've been telling people that there is no real revenue at any of these dotcom bullshit enterprises but they won't listen. They say but I know a lot of people that go on the sites. I say I know a lot of people that walk in mall stores and don't buy a thing. The number of uses doesn't mean a thing, only the number of people that check out at the register. Sadly for most dotcoms there is no actual register since they give the product away for free. They only make money though the con of charging companies to advertise with a billboard on the side of the road nobody sees.
i never understood the mentality of 100 people banding together to buy a hamburger. if you want a hamburger, just go buy one. you don't need 99 other people to virtually go with you so you can all save a quarter.
Have you actually tried Groupon? 100 people don't band together to buy a hamburger. Each individual buys the equivalent of a gift card at (usually) 50 cents on the dollar, and if the minimum # of people buy the deal the deal is active. What is your objection to saving money?
ya right and said hamburger is 3 towns away if you're lucky. I would venture to guess any savings deemed from groupon is quickly crushed when you factor in gas and time. add to that, i might be interested in hamburger but the stuff groupon sent me was of no interest to me so I unsubscribed. everyone i know thats tried groupon has stopped using it. this group includes devoted facebook minions.
Well, you cite a different issue. Not sure where you live, but I live in a major city that is well-served by Groupon (in fact, I only receive deals that are local to my part of town) so that avoids the problem you are speaking of. Not only have there been numerous deals for restaurants (not hamburgers...) within walking distance or a short drive, but I bought $50 worth of dry cleaning for $25 for a cleaner that is one block from my home (and where I take my clothes anyway...).
I might not be the typical Groupon customer, but I know many, many people who have and continue to use Groupons for painless ways to save money on food, clothing & services. If the deals aren't attractive to you, I understand passing on them, and if you can't get enough interesting deals to continue on the email list, unsubscribing seems rational.
So, how long to you think your dry-cleaner can stay in business when regular customers like yourself are obtaining services at 75% off? (Groupon pocketed $12.50 of your purchase, leaving only $12.50 for the cleaners)
All you're doing is running them out of business for the equivilent of a payday loan (they get a portion of the money up front).
Groupon only works for attracting new customers. But even then, it's extremely expensive as compared to other marketing campaigns.
The consumer is not running the business owner out of business by using Groupon. Nobody held a gun to said businessman's head. If businessman cannot take out a calculator and ask himself "CAN I afford to give 100 ppl this $20 meal for $10?" then I think it becomes pretty obvious why that business is resorting to Groupon in the first place.
However, some businesses do win on the deal. They have to have the common sense to calculate the potential gains/losses. If they cannot do that, they shouldn't participate.
That being said, many of the businesses do quite well because the Groupon system works with their business plan. (e.g. salons, where the stylists/masseuse might be willing to work for just the tip and hand the 25% over to the owner to cover the cost of turning on the blow dryer for two minutes. Customer pays tip to stylist and helps owner reduce overhead by filling an otherwise-empty chair for 15 mins)
And some businesses use Groupon because they are so desperate for new customers because they can't retain the customers they HAD. They overestimate the value of a new customer, and underestimate the value of the customers that they lose because they cannot calculate the cost of something they cannot see (the customer who is gone). They think "getting more customers" will save them. Many of these businesses are struggling because they offer poor service or expanded in a boom time and refuse to accept they are in a losing proposition.
I however, will happily buy off their inventory at a discount before they close their doors. Sorry. Thats business. V is for voluntary.
I'll leave it to the cleaner to determine how long they can keep offering these deals, but if you are suggesting that there is something wrong about taking advantage of a coupon then I couldn't disagree with you more. Nobody forces a company to use Groupon's service, and if the economic bargain is as terrible as you and other suggest, then Groupon will quickly join the ranks of other defunct businesses. However, given the longtime success of direct mail advertising and coupon bundling services (like Valpak and others), I would be surprised if this model goes away any time soon.
Disparage the Groupon buying process as "running them out of business for the equivalent of a payday loan" if you must, but unless you only buy every single item that you purchase at full price, without the benefit of sales or coupons, then your words are meaningless.
yeah, see that's my whole point. why would you buy a gift card for a hamburger, then hope that 99 other people also do it (or whatever the minmum is) so you can actually go get it? just go buy an f-ing hamburger already. meh, i haven't tried it, everytime i look it's truffles, designer sndwhich wraps, or some other nonsense i would never buy anyway.
Those things would not appeal to me either, but there have been many over the last couple of years that do--generally along the lines of a coupon worth $40 worth of food for $20 at a restaurant I already go to. In cases like that, it's quite simply free money. Moreover, after purchasing probably 25 Groupons over the last couple of years I cannot think of a single instance where I logged on to buy it and the deal had not already gone "active" with the minimum number of participants--so that, too, has never been an issue.
If the service were as limited and onerous (in terms of infrequent appealing deals that aren't already "active" by the time I see them) as they seem to be for you then I guess that I, too, would not be enthusiastic.
No its the mentality of people that want something but don't want to pay for it. Groupon is like virtual shoplifting. The retailers are catching on pretty quick that Groupon and Living Social do not actually increase sales and actually destroys profit. A store needs to bring in twice as many customers on a day when the coupon isn't being honored just to make up for the day they accepted the Groupon.