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Let’s Make a Daily Deal — Pricier

Daily deal sites tout savings of 50% or better on restaurants, yoga classes and other purchases, but their latest attempts at grabbing market share involve convincing consumers to spend more.

LivingSocial said Thursday it plans to launch a Chase-branded credit card with no annual fee. Cardholders will earn $10 worth of credits with the daily deal site for each month they make at least 10 purchases. Daily deal sites have also been experimenting with premium tiers. Last year, LivingSocial began offering LivingSocial Plus, which turns a $20 monthly fee into a $25 site credit. In February, Groupon began testing a $30 VIP membership that includes early access to select deals, the option to buy some deals after they expire, and more flexible refunds. A Living Social spokesman says the site has used programs to add value for its members. “The credit card provides our members with additional added value every time they make a purchase,” he says. Groupon did not respond to requests for comment.

Such programs are a way to generate loyalty amid fading interest in daily deal sites, says Greg Sterling, founding principal of Sterling Market Intelligence. “If you look at the buzz around the space this year as opposed to last year, it’s not what it was,” he says. “These businesses need to evolve.” Paid programs ensure consumers will look to make their daily deal purchases primarily from that site, even though there are hundreds of others making similar offers. There’s also value in the data generated, says Dan Hess, chief executive of aggregator site DealRadar.com. Deal sites can more easily observe how their most loyal customers behave, which might influence overall deal structure, pricing and timing over the long run.

But the value may be less clear for customers, experts say. “If consumers are regularly getting 50-80% off, what can they possibly offer in a VIP situation?” Sterling says. Consumers who choose not to pay up may find that popular deals sell out in the VIP pre-sale stage. Paying out for a membership could also prompt more impulse purchases to justify that up-front cost or to use up expiring credits. Plus, deals often include some un-covered costs, which add up over more deals purchased.


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    • I am firmly ooesppd to any sort of affirmative action for any group, male, female, black, white, or green. All it does is to reduce the quality of the students.Fran Porretto has made a very useful comment above that I think has some very strong logic to it. I personally know of several young men thinking in this direction.I think also we are devaluing education and thereby making it less attractive to really capable young men. The undergraduate degree today in most schools is not too much more than a good high school degree of 50 years ago. I think that some of our best and brightest young people can look at the whole process and see it as largely phony and say they just do not want to put up with it. I cannot blame them for that conclusion if that is the case; I would agree.

    • A lot of the $25 value for $15 (example)discounts are phony. The fine print says on a %45 or %50 minimum purchase. We never spend that much.

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