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Trouble in Coupon Land
The Daily Beast ^ | November 30, 2012 | Megan McArdle

Posted on 12/05/2012 8:19:40 AM PST by PJ-Comix

So Groupon and Living Social are in trouble.  Color me unsurprised; I never got the Groupon business model.  Well, I guess I got the business model--it's not that complicated--but I never got why people thought that eventually this model was going to be worth a zillion dollars.  

Coupons basically serve two functions for businesses--advertising, and price discrimination.  Advertising means it brings in new customers by making them aware of your service, or giving them an incentive to try it.  Price discrimination, on the other hand, is what food processors do with grocery store coupons: it lets them sell their products to customers who are very price sensitive, without lowering the price paid by people who are too busy or embarassed to clip coupons.


(Excerpt) Read more at thedailybeast.com ...


TOPICS: Business/Economy
KEYWORDS: coupons; groupon
Uh-Oh! I better use my GroupOn coupons while I can. Anyway, I've hardly paid anything but got hundreds of dollars of free stuff and services because of my referral bucks. I guess Andrew Mason should have sold to Google for several billion dollars while he had the chance. Now I doubt if he could sell GroupOn for a fraction of that price.
1 posted on 12/05/2012 8:19:52 AM PST by PJ-Comix
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To: PJ-Comix

*** it lets them sell their products to customers who are very price sensitive, without lowering the price paid by people who are too busy or embarassed to clip coupons.***

I never see coupons on the items I like to buy. Coupons are nothing but a bribe to get people to buy foods they normally don’t buy or use.

It is rather irritating to get behind someone in line who suddenly pulls out a handful of coupons for a dozen cake mixes or other items because they are 10 cents off! then they get into an argument with the cashier because half of the coupons are expired.

As I have said before, I don’t use coupons because there is nothing I want to buy that has a coupon on it.


2 posted on 12/05/2012 8:40:34 AM PST by Ruy Dias de Bivar (The parasites now outnumber the producers.)
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To: PJ-Comix

Opps, I forgot to mention those groups that go around selling booklets of coupons which you find the stores will not accept.


3 posted on 12/05/2012 8:41:52 AM PST by Ruy Dias de Bivar (The parasites now outnumber the producers.)
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To: PJ-Comix
Never really got Groupon. Lot's of coupons for massage therapists and aluminum siding and such.
4 posted on 12/05/2012 8:48:50 AM PST by Obadiah (How do you know that the light at the end of the tunnel isn't a muzzle flash?)
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To: Ruy Dias de Bivar

That’s OK, because being on line behind someone as ignorant as you are and watching you pay full price for things I get for pennies on the dollar makes me happy enough for both of us. :-)


5 posted on 12/05/2012 8:58:27 AM PST by perfect_rovian_storm
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To: Obadiah

I just got a $10 Shell gift card - price was supposed to be $3, but I had a new customer discount and paid $0. It won’t buy me much gas, but 10 bucks is 10 bucks!


6 posted on 12/05/2012 9:02:14 AM PST by knittnmom (Save the earth! It's the only planet with chocolate!)
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To: PJ-Comix

Groupon’s Andrew Mason made one of business’ stupidest decision when he turned down Google’s $6 billion buyout offer. Incredible. Pride goes before the fall, and Mason has proven it!


7 posted on 12/05/2012 9:06:53 AM PST by rawhide
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To: Ruy Dias de Bivar

I never buy those because they typically contain lots of coupons for things I have no use for at places I wouldn’t patronize.


8 posted on 12/05/2012 9:09:03 AM PST by ZirconEncrustedTweezers (Democrats are evil. Republicans are stupid.)
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To: rawhide

” Groupon’s Andrew Mason made one of business’ stupidest decision when he turned down Google’s $6 billion buyout offer. Incredible.”

Possibly the DUMBEST move in 100 years : )


9 posted on 12/05/2012 9:10:37 AM PST by stephenjohnbanker
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To: Ruy Dias de Bivar; perfect_rovian_storm
People go to extraordinary means to bend a buck. When I was in high school economics, we were taught that coupon clipping is beneficial on a curve. There's a diminishing value of returns where it's no longer financially beneficial to clip coupons due to the overwhelming amount of time required to do so. The Internet (read: Groupon) made this process easier, but there's still a labor element.

I agree with Ruy that going this route is overly laborious. Instead of wasting time on websites or in newspapers, take up a second job to make up the difference in your savings. In reality, you're buying products or services you normally wouldn't all in the name of "savings." You can save MORE by not spending at all. Again, diminishing value of returns.

Then there's this:

But Groupon's core businesses, like restaurants and spas, have a relatively high marginal cost of providing their service: food, labor, laundry.

--snip--

Restaurants, who were supposed to be one of the core businesses for daily deals, complained that Groupon customers were disproportionately poor tippers who took up tables while carefully not spending any more than the face value of the Groupon--no drinks, no dessert.

This is the most telling part of the article. This whole fad isn't about saving. It's about getting something for nothing. Whereas when I go to a restaurant, I go to one that the wife and I frequent often, and because we're known as good tippers, we get stellar service. Getting my tacos fresh or my pizza warm is infinitely more important to me than saving $4 on an appetizer that I'd normally never get and leaving that poor server a shitty tip despite otherwise decent service.

10 posted on 12/05/2012 9:12:37 AM PST by rarestia (It's time to water the Tree of Liberty.)
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To: Ruy Dias de Bivar

It all depends on where you are in life’s great food chain. If you’re in that middle section that uses a lot of the main brands (Kraft, Betty Crocker, Pillsbury) coupons are great, because they’re the big coupon printers and that’s the stuff you buy anyway. I’ve been right through the chain, used to be too poor for that stuff even with coupons so they were useless to me, then I made enough to change to those brands and used coupons a lot, now I’ve moved past those to the Boar’s Head section of the grocery store and they don’t make coupons so I no longer use them.


11 posted on 12/05/2012 9:17:55 AM PST by discostu (Not a part of anyone's well oiled machine.)
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To: perfect_rovian_storm

***That’s OK, because being on line behind someone as ignorant as you are and watching you pay full price for things I get for pennies on the dollar***

Well, if the maker or seller of the product has to bribe you to buy it, it must not be very good. I probably would not eat it anyway.


12 posted on 12/05/2012 9:20:49 AM PST by Ruy Dias de Bivar (The parasites now outnumber the producers.)
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To: rarestia

I’ve gone back and forth on coupons. I will always use a coupon if I stumble across one that is for a product I would buy anyway. And since I’m not generally brand-sensitive, I have a good number of coupons available to me.

But when I made a concerted effort to use coupons, I found that the amount of time it took me was disproportionate to the amount of money I was making, since I wouldn’t use coupons to get things I didn’t need, even if they were free.

Because, if a store was actually giving something away for free, I wouldn’t take it if I didn’t need it or want it. It just seemed wrong to me, plus it clutters up the house.

Anyway, we shop thrift stores. Less hours, big savings on what we want, and we are part of the sustainable culture (reuse/recycle).

Of course, if I did not have a job, I’d be clipping coupons, because that would be my job. But if you are the kind of person who would apply themselves to making money on coupons, you’ll be able to get a real job.

For example, I make $30 every two weeks writing an opinion column for a local paper. It takes me at most 3 hours to write a column, so I make 10 bucks an hour. And I can do it at home, and I enjoy writing.

I made almost $1000 working as a Halloween haunt monster for a local theme park. Again, about $10 an hour, it’s a hard job, but a blast.

I guess I could make more than $10 if I spent an hour looking for coupons. So if I could use them at a store I was already at, for things I need, it could be worth it.

I laugh when I see the extreme coupon shows where people have entire garages filled up with hundreds of a product. I guess if they open their own grocery store, they have a leg up. Meanwhile, a garage-sized locker costs about $70 a month; so every year, they are essentially costing themselves close to $1000 in physical costs. Of course, if the garage was going to be empty anyway, it’s like if you were going to be sitting on your butt all day anyway, might as well clip coupons.

But if you watch the coupon show, and the hoarder show, the one thing that is clear is that, at least the coupon people tend to have their excess stuff much better organized.

And you never know when you are going to actually need 1000 bottles of hand lotion. You could always give them away as presents, I guess.

As I get older, I’m working on getting rid of all the clutter in my life; I’ve decided that piles of stuff deteriorates my quality of life, keeping track of stuff stresses me out, caring about stuff annoys me, insuring stuff and storing stuff is a drain on my energy.

So where I used to keep everything, knowing that some day I might need a switch off an old radio, or some gadget that I can keep in my basement, I now have decided I’d rather throw away the 100 things I kept, and then spend money to buy the 1 thing I threw away that I need 5 years later.


13 posted on 12/05/2012 9:38:53 AM PST by CharlesWayneCT
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To: Obadiah

My wife does the Groupon Thing.

Our gang going out to eat usually numbers 5 to 7. She’ll find a Groupon to a place we were going to anyway. Deals most times are around the $10 to $15 range.

Saves us a bit.


14 posted on 12/05/2012 9:50:26 AM PST by PeteB570 ( Islam is the sea in which the Terrorist Shark swims. The deeper the sea the larger the shark.)
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To: Ruy Dias de Bivar

It has nothing to do with bribery for me. It is about saving money. And I’m all for that. A smart consumer does not buy a product just because they have a coupon for .40 off.

My wife and I have more than enough money to shop without coupons, but do because we average a 30-50% savings every time we shop and because we plan ahead watching for items we use to go on sale. Many stores will double and triple the value of many coupons on certain days. And yes, we also use Groupon. I like paying $25 to get $50 worth of food at a place we would go to anyway.

I would suggest buying a paper one Sunday and look at the coupons available and then check those against what you normally buy. I’ll be the first to admit there are many we do not use, but the savings for basic items like toothpaste, pasta sauce, deodorant, canned goods, etc. generates greater savings than not using them.

2 cents. Make of it what you will. :)


15 posted on 12/05/2012 10:01:20 AM PST by roostercashews (Having a gun doesn't make you safer, but knowing how to use one does.)
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To: PJ-Comix

I’ve only used Groupon once. I bought a coupon to help defray the cost of dinner at a restaurant I’d always wanted to try.

We went to the restaurant, ordered somewhat more than we usually order, because we wanted to try a greater range of menu items, since it was our first time. The cost of the meal was several times the value of the coupon. Additionally, as I always do when using a coupon in a restaurant, I tipped (generously) on the cost of the meal BEFORE taking into account the coupon.

I’m happy we went. It was a moderately pleasant experience and we’d talked about going there for a couple of decades, so we satisfied our curiosity.

So, it was a real win for the restaurant to use Groupon.

It would have worked well for the restaurant except for three facts: 1) it was modestly overpriced; 2) the food wasn’t quite that good and 3) the service, though cheerful, was a little lackadaisical.

If I’m going to pay premium prices, I expect premium food and service.

Getting folks in is one thing. Keeping them coming requires execution.


16 posted on 12/05/2012 10:02:20 AM PST by sitetest (If Roe is not overturned, no unborn child will ever be protected in law.)
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To: rarestia
n reality, you're buying products or services you normally wouldn't all in the name of "savings." You can save MORE by not spending at all.

I'll probably get flamed for saying this, but I think this is a concept that very few women understand.

/ducking

17 posted on 12/05/2012 11:58:42 AM PST by zeugma (Those of us who work for a living are outnumbered by those who vote for a living.)
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To: Ruy Dias de Bivar
I never see coupons on the items I like to buy. Coupons are nothing but a bribe to get people to buy foods they normally don’t buy or use.

I guess you don't use propane because one of my GroupOn coupons is for propane. Of course, for me it's FREE since I used GroupOn referral bucks to pay for it.

It is rather irritating to get behind someone in line who suddenly pulls out a handful of coupons for a dozen cake mixes or other items because they are 10 cents off!

I don't mess with those small amounts. I usually save several bucks per item. Of course, I use coupon combos like manufacturer's coupons on top of store coupons topped off with $5/$30 coupons for the entire amount.

As I have said before, I don’t use coupons because there is nothing I want to buy that has a coupon on it.

I guess you didn't want Thanksgiving turkey because I used coupons to get mine for FREE. Oh, and consider not driving because for a couple of months last summer I was filling up my tank for FREE via coupons.

p.s. This very computer I am typing on I got FREE a couple of years ago via coupons. Methinks you associate coupons with a dime off macaroni type of stuff. I've taken it to a whole other level.

18 posted on 12/05/2012 2:42:38 PM PST by PJ-Comix (Beware the Rip in the Space/Time Continuum)
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To: rarestia
You can save MORE by not spending at all.

I believe the technical term for that is called "starvation."

19 posted on 12/05/2012 2:46:30 PM PST by PJ-Comix (Beware the Rip in the Space/Time Continuum)
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To: discostu
I’ve moved past those to the Boar’s Head section of the grocery store and they don’t make coupons so I no longer use them.

Ahem! Ever hear of $5 off $30 coupons? You can use those for anything except alcohol and tobacco. Otherwise it doesn't matter what you buy. You get five bucks taken off your purchase.

20 posted on 12/05/2012 2:50:02 PM PST by PJ-Comix (Beware the Rip in the Space/Time Continuum)
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To: Obadiah
Never really got Groupon. Lot's of coupons for massage therapists and aluminum siding and such.

Throw in some dijon mustard and you've got yourself an afternoon!

21 posted on 12/05/2012 2:52:58 PM PST by Tijeras_Slim
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To: PJ-Comix

Heard of them, never seen one, don’t know how to get them, don’t care, because it clearly involves effort I’m unwilling to put in. I believe very strongly in the time value of my money. My salary translates to a bit over $30 an hour, so if it would take more than an hour of effort to get that $30 coupon I come out behind. A $5 better take less than 2 minute of effort, or again I’m behind.

I don’t chase money, not in either direction. Just doesn’t seem worth it. I used to, when I was climbing out of poverty, but I’m out now, been out for a while. Now I chase enjoying money.


22 posted on 12/05/2012 2:54:29 PM PST by discostu (Not a part of anyone's well oiled machine.)
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To: PJ-Comix

***I guess you don’t use propane because one of my GroupOn coupons is for propane.***

I’m on natural gas.

***I guess you didn’t want Thanksgiving turkey because I used coupons to get mine for FREE****

Buy so many dollars in groceries, get one free. No coupon.

I just got our newspaper. Full of coupons for groceries, sandwiches, pizzas, ect. None of these stores are close to me. The cost of gas to go get them is more than the cost of the same item when bought at our local Pizza place, and our local pizza is lots better.


23 posted on 12/05/2012 2:58:16 PM PST by Ruy Dias de Bivar (The parasites now outnumber the producers.)
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To: discostu
My salary translates to a bit over $30 an hour, so if it would take more than an hour of effort to get that $30 coupon I come out behind.

Actually its a $5 off $30 purchase and the only time and effort I put into getting them is a simple button click on eBay.

p.s. Keep in mind that is $30 BEFORE coupons so if your coupons add up to $25 you get the entire bundle for FREE after you hand over the $5 off $30 coupon.

I sort of have this thing down to a sort of automatic mental process that many local couponers consult me on the latest deals. For example, I got 3 calls today from couponers asking my advice on the new Publix Green Sheet deals coming out this weekend.

24 posted on 12/05/2012 3:01:30 PM PST by PJ-Comix (Beware the Rip in the Space/Time Continuum)
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To: Ruy Dias de Bivar
Buy so many dollars in groceries, get one free. No coupon.

Yeah, well all my Thanksgiving trimmings were also FREE via coupons.

25 posted on 12/05/2012 3:03:29 PM PST by PJ-Comix (Beware the Rip in the Space/Time Continuum)
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To: zeugma
I'll probably get flamed for saying this, but I think this is a concept that very few women understand.

LOL! Well, I for one, won't flame you. I'm so tightfisted, even my husband gets annoyed at me sometimes!

26 posted on 12/05/2012 3:04:40 PM PST by MamaTexan (It is impossible to follow the Original Intent of the Constitution and NOT acknowledge secession)
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To: PJ-Comix

I don’t e-bay. And $5 is meaningless money to me. I tip $5 on a $15 bar bill.

Only time I ever got $25 of coupons on one purchase was dumb luck, there’d been a bunch of durable goods I’d been thinking about replacing soonish, got a mailer with a bunch of coupon for durable good, most of which were on my “one of these days I gotta” list. Went to Target, got all that stuff, it was like $25 or so off close to $100. Don’t even know how I got the mailer, would have bought the stuff soon anyway.

I used to coupon a lot. But I moved on. The effort level stopped being worth it. I no longer need to pinch pennies, hell I no longer need to pinch Jacksons, I can even chuck around Benjamins without too much concern. I’ve just plain got better things to do with my time than chase $5 coupons all over the internet.


27 posted on 12/05/2012 3:10:28 PM PST by discostu (Not a part of anyone's well oiled machine.)
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To: discostu

I buy the $5 coupons in bulk. Hardly chasing them around the web. Plus I estimate I save a couple hundred bucks a week at a minimum. Oh, and this computer is no small change. I saved almost $400 when I got it FREE a couple of years ago. BTW, I am now preparing a survivalist stockpile obtained via coupons.


28 posted on 12/05/2012 3:15:35 PM PST by PJ-Comix (Beware the Rip in the Space/Time Continuum)
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To: PJ-Comix

You had to go find where they are, that’s chasing them around the web. A couple hundred isn’t that big a deal, especially if you consider the time put in. Really think it through, to find these coupons, save these coupons, sort these coupons, research the deals, go to the proper stores, remember the coupons, remember the loyalty cards, don’t buy that here there’s a better deal at this other store to go to. To do ALL that does it take you more than 10 hours a week? 10 hours of labor for me pays over 300 bucks, a couple hundred buck on saving from that makes it a value loss.

Computers are small change if you amortize it over the lifetime. I’m sitting in front of a 600 dollar computer I bought 5 years ago and intend to keep another year and half-ish. I’m going to spend more on movie tickets in that time than the computer, and I’ve got friends in the right places, I get into the movies free a lot.

For you it might make sense, you seem to enjoy it, I don’t enjoy any aspect of chasing money, one of my basic life rules is to not put more effort into spending money that I did making it. And I’ve got a cushy software job where we haven’t worked any over time in longer than I’ve owned this computer, my spending effort threshold is low. Awesome for you if this works for you as value or just as fun. For me it would work out in neither way, it’s a lifestyle I lived when I had to, but I don’t have to anymore, and I didn’t enjoy it. I’ll still use deals and coupons that land in my lap, but they better light up and announce themselves because I’m not paying much attention to that stuff.


29 posted on 12/05/2012 4:27:31 PM PST by discostu (Not a part of anyone's well oiled machine.)
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To: PJ-Comix
When he passed up that deal I said, “He's going to regret that decision for the rest of his life.” Even then it was obvious that Groupon had no defensible position in its market.
30 posted on 12/05/2012 5:37:03 PM PST by 1010RD (First, Do No Harm)
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