Groupon remorse? Sites let users unload deals

Jul 20, 2011 By CANDICE CHOI , AP Personal Finance Writer
In this screen shot provided by DealsGoRound.com, an image from the website is displayed. DealsGoRound lets consumers sell daily deals from sites like Groupon and LivingSocial that they no longer want. The resale market emerged in the past year on the heels of the exploding popularity of daily deals. (AP Photo/DealsGoRound.com)

(AP) -- Wish you hadn't bought that daily deal for a hot air balloon ride? You're not alone.

A growing number of shoppers with buyer's remorse are tapping an emerging resale market to unload the coupons they no longer want from sites like Groupon and LivingSocial.

For the uninitiated, sites offer limited-time discounts of as much as 90 percent on a variety of products and services. But the elements that make the deals so enticing - the steep price cuts, limited supply and countdown clock - can also be a potent mix for impulse purchases.

The pitfalls are apparent in a key statistic; an estimated 20 percent of the discounts are never redeemed.

That's where sites like DealsGoRound.com come into play. There's no charge for sellers to list an unwanted coupon, but the sites takes a 10 percent cut if it's sold. At LifeSta.com, another resale site for daily deals, sellers pay 99 cents plus 8 percent of the sale price. Buyers don't pay any fees on either site.

"People buy deals with good intentions," says Kris Petersen, founder and CEO of DealsGoRound. "But then the planning doesn't come together or they run out of time to use the deal."

The emergence of the resale market is a natural outgrowth of the explosive popularity of daily deal sites in the past year. Although Groupon and LivingSocial are by far the biggest and best known players in the space, there are now an estimated 400 similar sites, according Daily Deal Media, which tracks the industry. And this year, consumers are expected to spend an estimated $1.9 billion snapping up bargains, about double the amount spent last year.

The deals are usually tilted toward a higher-end clientele, with offers including discounts on restaurant vouchers, wine tasting tours and shiatsu massages. But circumstances can sometimes prevent shoppers from redeeming their coupons.

After paying $40 for a month of unlimited yoga classes on Groupon, Michael Roman found a more convenient venue for practicing his downward dog. So he decided to list the coupon on DealsGoRound.

He listed the deal for the same amount he paid, with plans to lower the price if it didn't sell quickly. But the coupon sold within hours.

"The immediacy is what surprised me," says Roman, a 47-year-old business analyst from Chicago.

If a coupon is popular enough, sellers may even be able to fetch a small profit. Because daily deal sites offer such steep discounts, sellers can list their coupons for more than they paid and still offer a bargain. For buyers, resale sites offer access to deals that are no longer available.

In other cases, sellers may have to ask for less than they paid. This usually happens when a coupon's expiration date is fast approaching or if the retailer or service is too obscure.

The worst case scenario is that sellers never find a buyer; DealsGoRound says that happens with about a third of its listings.

It's worth noting that technically, Groupon's terms of use prohibit the unauthorized resale of its coupons. The fine print on LivingSocial's site also prohibits the sale of its vouchers. But DealsGoRound, which is based in the same building as Groupon's Chicago headquarters, notes that it has operated for more than a year without hearing concerns from any daily deal sites. It says it would honor any requests to stop listing coupons from specific sites.

In any case, consumers are flocking to DealsGoRound and Lifesta. The sites both have listings in more than 100 cities, shadowing the markets where Groupon and LivingSocial do most their business. DealsGoRound recently listed about 300 deals in Chicago; LifeSta listed about 500 in San Francisco.

Groupon notes that it doesn't encourage the use of resale site because it can't guarantee the authenticity of the coupons sold on them. But both DealsGoRound and LifeSta guarantee buyers refunds if there are any problems with the coupons. The sites require sellers to electronically submit coupon vouchers before they're listed.

Like eBay, they work as intermediaries so transactions are kept seamless.

"There's no meeting someone at Starbucks hoping they'll show up," said Petersen of DealsGoRound.

Another site, CoupRecoup.com, works more like Craigslist and lets buyers contact sellers directly. CoupRecoup doesn't offer any guarantees, but sellers may like it because there are no fees.

Before turning to the resale market, however, check out whether it's possible to get a refund is possible directly from the daily deal site.

LivingSocial gives shoppers five days to return deals for any reason. Groupon doesn't offer such leeway. But the site says its customer service team works on a case-by-case basis to give buyers refunds or credit if they can't redeem a coupon for a legitimate reason. An example might be if a customer couldn't attend a concert because of a medical emergency.

There's another little-known clause worth nothing. To comply with federal and state laws, and LivingSocial say their coupons only lose their promotional value after the expiration date. The coupons are still good for however much the buyer paid for it.

So if a shopper pays $20 for a $40 restaurant voucher, the voucher is still good for $20 even after the expiration date. If customers run into problems, the sites will work with merchants to ensure the coupons are honored.

There are cases where buyers will simply be out of luck, however. For example, if you buy a deal for an event like a concert and it passes, there's no way to get your money back.

Explore further: US warns shops to watch for customer data hacking

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Amazon invests $175M in Groupon competitor

Dec 03, 2010

(AP) -- Amazon.com Inc. said Thursday that it invested $175 million in social coupon service LivingSocial - the latest sign that the online retailer is delving into promising new methods of e-commerce.

Review: So many coupon sites, so little time

Feb 23, 2011

(AP) -- If Groupon isn't as ubiquitous as, say, Facebook, it's getting there. The website, which offers daily coupons to local restaurants, bars and other businesses, has 60 million members worldwide, about ...

Yelp testing 1-day sales of local coupons

Aug 27, 2010

(AP) -- Review website Yelp said Thursday that it is testing out "Yelp Deals" - large discounts at local businesses that site users can buy on one day only.

Startup serves up bargains to online shoppers

Apr 05, 2011

As startups rush to offer smartphone users coupons for discounts at nearby shops, Dealpulp.com is out to woo the bargain hunter inside online shoppers across the United States.

Recommended for you

US warns shops to watch for customer data hacking

12 hours ago

The US Department of Homeland Security on Friday warned businesses to watch for hackers targeting customer data with malicious computer code like that used against retail giant Target.

Fitbit to Schumer: We don't sell personal data

Aug 22, 2014

The maker of a popular line of wearable fitness-tracking devices says it has never sold personal data to advertisers, contrary to concerns raised by U.S. Sen. Charles Schumer.

Should you be worried about paid editors on Wikipedia?

Aug 22, 2014

Whether you trust it or ignore it, Wikipedia is one of the most popular websites in the world and accessed by millions of people every day. So would you trust it any more (or even less) if you knew people ...

How much do we really know about privacy on Facebook?

Aug 22, 2014

The recent furore about the Facebook Messenger app has unearthed an interesting question: how far are we willing to allow our privacy to be pushed for our social connections? In the case of the Facebook ...

Philippines makes arrests in online extortion ring

Aug 22, 2014

Philippine police have arrested eight suspected members of an online syndicate accused of blackmailing more than 1,000 Hong Kong and Singapore residents after luring them into exposing themselves in front of webcam, an official ...

Google to help boost Greece's tourism industry

Aug 21, 2014

Internet giant Google will offer management courses to 3,000 tourism businesses on the island of Crete as part of an initiative to promote the sector in Greece, industry union Sete said on Thursday.

User comments : 0