SmartMoney Blogs

Pay Dirt
A daily look at what we buy, how we spend, and the companies that do right - and wrong - by their customers.

50% Off? Repeat Groupon Customers Can Do Better

Groupon wants to entice more customers to return to their merchants.

Half-off deals are the first deal of many, now that industry leader Groupon has started offering rewards for repeat customers.

Groupon said Wednesday that it would start offering rewards to encourage consumers to go back to businesses where they’ve redeemed a voucher. Took advantage of a 50%-off massage? Maybe there’s a free manicure if you go back. Or a restaurant might offer free dessert, or a steep discount on a bottle of wine. Groupon says any offers made will be up to the retailer. “We will email customers to tell them they’re approaching a reward target, and track your purchases so you don’t have to carry a reward card,” says Groupon spokeswoman Julie Anne Mossler.

The program is likely meant to entice more businesses than consumers. Judging by the several hundred sites on the market, consumers just can’t get enough of 50%-off facials, kickboxing, Thai takeout and other cheap luxuries. Yet studies show that less than a quarter of customers go back to that business for a second, full-price visit. And why would they, when there’s another spa, gym, or restaurant offering that enticing 50%-off deal? That poses a problem for sites trying to entice retailers, and retailers hoping to gain new customers by offering that steep discount.

But Dan Hess, founder of, a daily deal site aggregator, says it’s a win-win for bargain-hunters, too, “except if they over-stretch their budget or are disappointed by the product or service they’ve bought.” Matt Wallaert, social and behavior psychologist of digital strategy firm, says daily deal rewards make more sense for a “need” (grocery store) than a “want” (head massage): “Try to separate the discount from your decision to make the purchase,” he says.

Readers, what does it take for you to go back to a business after you’re out of daily deals?


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (0)

    • Be the first to leave a comment on this blog.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.