Some small business owners in Portland feel that using Groupon and other daily deal sites often has unintended consequences for their businesses.
Some small business owners in Portland feel that using Groupon and other daily deal sites often has unintended consequences for their businesses.
Swarms of first-time customers (most of whom never came back again) crowded out, undercut and alienated their regulars who were paying full price. Servers got stiffed on tips. [EaT: An Oyster Bar co-owner Ethan] Powell even had a Groupon thrown in his face by a customer after he declined to let the man redeem the same gift certificate twice.
For everyone else, Groupon worked exactly as planned—the diners got a great deal, and Groupon (which often pockets half of the voucher’s price) walked away with an estimated $9,200 for doing little more than sending out emails. In all, Groupon is on track to collect $2 million from Portland businesses this year, based on WW’s estimate of Groupon’s likely share of its Portland business.
Nearly half the businesses using daily deals report they made no money. Customers often get their discounts and run to the next deal, without creating the loyal relationship that Groupon says can follow. Even Powell and [EaT co-owner Tobias] Hogan say the fact that they made money doesn’t justify the damage these daily deals can do to businesses and employees.
Read more at Willamette Week.
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