Groupon Review - Is Groupon a Scam?

Groupon is an international deal-of-the-day website which claims to offer the best deals on a range of leisure activities through group buying.  This is my own personal review of my Groupon experiences; in which I say whether I consider Groupon to be a revolutionary way of saving money or just a scam.  But first a (very) brief overview of Groupon.

Groupon was founded by Andrew Mason in early 2007 as The Point.  In 2008 the site changed it's name to Groupon and this was how the company grew.  Groupon started in the US but quickly spread to Canada and through the acquisition of MyCityDeal got access to European markets.  It is now the largest website of it's type worldwide and continues to rapidly expand.

This gives an overview of how Groupon works, in a deliberately factual way - the review section follows!

Groupon has a daily deal which gives massive discounts on a wide variety of leisure activities, for example in the London there have been savings of about 75%-90% on cinema tickets, spa treatments and meals out.

There is one deal a day and each deal lasts only one day.  Each deal is for a local leisure activity.  To see the deals there is the need to sign up to Groupon.  When signing up there is the need to provide an email address and password for signing in to the site.  In addition there is the need to say which city you are located in - this is to allow the deals for that city/region to be shown (this is because in many cases the deals are city specific).

Once registered for Groupon it is possible to see the daily deal for the desired location.  If this takes your fancy and you wish to take part in the deal there is the need to purchase it from Groupon.  This is done within Groupon - there is no need to transfer to any third party webpages unlike with cashback sites.  The purchases are made using a card, like on any other webpage.  Once the deal has been paid for it is then delivered.  Whilst this can be in the form of a physical delivery, in the vast majority of cases it is through the form of an emailed voucher.   

My initial reaction when discovering Groupon was this must be scam.  Discounts which sometimes exceed 90% surely is too good to be true.  However, I have since determined that this isn't the case.  There is still some question marks over how Groupon gets such good discounts and still manages to make money but I can see three reasons why.  Firstly Groupon can presumably get discounts through bulk buying, secondly many companies must offer to give discounts to Groupon in exchange for the publicity and finally some money must be made from people who purchase activities off of the website and then don't use them.

I persevered though, registered, and found the Groupon website to be surprisingly easy to navigate.  This is possibly due to the unique way in which the website is run - there is only ever one thing for sale on Groupon!  I found the purchasing process to be quick and quickly received my voucher.  From then all I needed to do was take the voucher along to the business and get my discounted product.

There are a few bits of advice I would give before purchasing items on Groupon.  Never purchase items in a hurry - always think about it for 5 minutes or so.  I should imagine the company hopes to get large numbers of impulse purchases.  Always read the terms and conditions linked to any deal - many dictate that the activity can only happen at certain times or with certain conditions attached eg phoning up the business at least 24 hours in advance.  In addition it may be worth considering who you are going to go with - many items are only for one person and who generally wants to go for a meal on their own?  As such, whilst it may seem like a good deal - if a partner has to pay full price it isn't as good!  

I would also recommend signing up for Groupon email alerts and/or if you are active on Twitter or Facebook signing up for Groupon alerts through these social networks as this means there is no need to check the site every day and it also ensures you are less likely to miss a deal!

Have you used Groupon?  If so how would you review it?  Use the handy boxes to quickly rate Groupon or write a longer review using the comments section below!  I am sure that it will be interesting to those who are yet to use Groupon!