It seems that discount group buying sites, such as Groupon, Team Buy, Wag Jag, etc., have started popping up like daisies this year. I am guilty of signing up for the e-mailing lists (I’m signed up for both Groupon and Team Buy), and have been a member for about 2 months. I will also be un-subscribing shortly.
After being bombarded with all these daily e-mails to save money, I’m thinking that this is just another way for businesses to entice us to spend away our hard earned money. Here’s why.
Definition: Spending to save money.
Groupon encourages us to spend money in order to save money. Which, as most financial savvy people know, is silly, for things that we do not need. Sure, we may save 25% off thing-a-ma-jig, but you know what? We would have saved 100% if we didn’t buy it at all. And you don’t even need a Groupon for that 😉
Buying Because it’s Cheap
Sometimes, when we see a great deal – such as 75% off super-thing-a-ma-jig, we may just go ahead and buy it, even though we don’t need, nor we were planning on buying it. We create a need for the item after we see that its such a “great” deal. And the main reason we’re buying it is because it’s cheap.
Take a Photography session, for example. How many of us have seriously considered getting professional photography done? Would we do it if the session was 85% off? I know that I considered it when I saw the Groupon deal.
Since these deals usually expire daily, there is a sense of urgency. We are forced to make a decision without really thinking it through and doing the research that we would have otherwise done for the same purchase. All for the fear of missing this awesome-never-to-happen-again deal.
Even though there is a discount from Groupon, I found that if you shop around and have some patience, you can often score a similar deal through a combination of promotion codes, store promotions, etc.
The Fine Print
We need to make sure we understand the deal completely, and read fine print. There are often limitations in the fine print that make the awesome-never-to-happen-again deal not quite as awesome. Some of the fine print I find makes or breaks a Groupon deal are as follows:
- Does the cost of Groupon Dinner cover drinks? Alcohol? Taxes? Gratuities? Limit of use per group or table? Black out dates or times?
- Do you have to attend those 10 Yoga classes for 90% off in 10 consecutive days?
- Does your 80% photography session include prints, or tell you how much each print will cost?
Buying Groupons and Not Using Them
You’ve spent your money, but when you don’t use them, you are not getting any value from them. Having a stack of Yoga or gym Groupons isn’t going to get you into shape. I am guilty of this, as well. I had my Groupon for an entire month before I used it.
I’ve bought one Groupon so far. It was a $10 coupon for $25 worth of food at a Himalayan restaurant. It was delicious.
One thing to be wary of, is that the Groupon was advertised for 60% off my meal. However, since the Groupon does not cover taxes or gratuities, even if you only bought $25 worth of food, your bill would still be about $32.50. Your out of pocket money is $7.50 + $10.00, so you really save 46% off your meal, not 60%. I’m not pointing this out to be stingy, it’s just something to keep in mind when buying Groupons for food or other services where taxes and tip are not included.
Buying in bulk and saving money is a great idea. However, you only save money when you buy things that you were going to buy anyway, but buy it for less. Obviously you don’t save money when you go out and buy things that you weren’t going to buy – even if it’s priced at 75% off. There is also the constant bombardment of ads or glittery temptations of deals every single day, mailed straight to your inbox.
I am going to un-subscribe from Groupon, Team Buy, etc. As mentioned previously, I have purchased the Entertainment Book, and I think I can get similar deals without the constant temptation to spend more.
What have your experiences with Groupons and other bulk buying discount sites been? What are some tips that you have to share?