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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?


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    • I can say that I will never purchase a Groupon after doing a lot of research on the affects of the businesses who purchase them and on the economy as a whole.

      I am a commissioned hair stylist. The owner of the salon recently ran a Groupon; a $50 value sold for $25. As her employee, I am making NO MONEY from these clients unless they decide to tip. When I asked her why us commissioned stylist aren’t getting paid, her response was because she has to pay Mastercard and Visa. Pretty sure that is 3%, which would equal $0.75! So, because the owner of my business decided it was a good idea to run a Groupon I am supposed to be okay with not getting paid? This should be illegal. I think the only one who makes profit from this is Groupon itself.

    • Groupon is the worst business decision I have ever made. I was fully aware that there would be no profit from the actual sale of the certificates. I had to discount a regular priced service 50% then groupon takes half of that. Oh yes and Groupon makes me pay for the credit card processing too. Oh yes, They also lowered the price and increased the discount to about 67% when they ran the offer without my permission.
      So I still had faith and tried to make this Groupon experience work. I understand that with paying my staff and for product I would be in the red on each service but it would be worth it if the clients came back. If the clients purchaced additional services or even tipped the staff like regular paying customers do, it would be ok.
      This did not happen. The majority of the Groupon clients are regular clients of GROUPON and go where the next deal is. Tipping is rare and they don’t care if you get upset as they have no intention of returning anyways. Some even stated that they NEVER pay full price for spa services. They have become professional Groupon buyers. What Groupon was and what it is now may have changed. We have this huge Groupon, Livingsocial ect mass of consumers who regularly purchase these deals for food, entertainment and beauty services. This is how they live, save money and get what they want. The problem is that businesses like mine are seeking return clients and profit. These professional spa hoppers are not looking to become loyal customers of us. They are loyal customers of Groupon.
      So now that our Groupon deal has calmed and we can’t wait for those certificates to expire, I see how badly this deal harmed my business. No one wants a Groupon on their books. Groupon clients are avoided by staff. The Groupon client is not treated as well as a regular client. Even if we offer our own 50% off discount, the clients we get prove better returns. Staff now views Groupon people as a waste of time.
      I had really hoped it would be a good deal.

    • I buy group-ons for stuff I need or stuff I’ve been wanting to try. The biggest reason for me to keep going back to a company is quality, enjoyable service at a decent price. I have to enjoy my experience or I will NOT come back. I bought a group-on for a local museum in my area and my family loved our visits and went so often the museum staff recognizes us. We bring extended family with us sometimes, buy stuff from their gift shop, our son goes to their summer camp, we tell people in the area how great the museum is both online and in person, and we plan to buy another annual membership next year too. All because it’s an enjoyable, fun place to go that is well worth it. I also bought a group-on from a portrait studio in my area and we are planning our 4th visit because their picture quality is so wonderful we feel it is worth the slightly higher price they charge than some others in the area. If companies want repeat customers, they need to offer good service and quality. If someone is on the fence though about whether they want to go back or not, extra additional discounts on repeat visits would help sway them.

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