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If You Like Coupons, You Might Like This: The Groupon

Nancy Trejos

Tons of people are using coupons these days. But a friend recently alerted me to a unique take on the coupon concept: the groupon.

The groupon is the brainchild of Chicago resident Andrew Mason. In November, he persuaded merchants in Chicago to offer their services at a discount if Mason could guarantee them a certain number of customers. The customers buy a “groupon” to get that discounted service. Even though they have to pay for the groupon, they save money in the end. For instance, they might spend $20 to buy a $50 groupon, meaning they save $30.

The Chicago groupon site now has 75,000 subscribers. Mason has since launched sites in Boston, New York and San Francisco. In May, the groupon came to Washington, D.C. and already has 15,000 subscribers. Groupon sites will be showing up soon in Los Angeles and Atlanta. So far, the company has sold 50,000 groupons nationwide.

Each day subscribers, who don’t have to pay a membership fee, get an e-mail alerting them to a new deal for a restaurant or a service, such as teeth cleaning, tennis lessons, a psychic reading, skydiving, you name it.

“These are all things people loved to do when the economy was better,” Mason said. The groupon “makes it easy for people to get out there and live their lives at a price that they can afford.”

On Friday, the deal of the day in the District was a $35 groupon for $15 at the restaurant P.S. 7 in Chinatown. At least 20 people had to buy the groupon by June 7 in order for the restaurant to give the group the discount. On Friday afternoon, more than 200 people had already bought one.

Each coupon has different expiration dates and restrictions, but Mason said those are clearly stated. “We’re transparent,” he said. “We hate gotchas.”

The merchants sometimes lose money because they have to slash their prices and pay a fee to Mason’s company, but they’re willing to do so for the marketing.

Take Joanna Robinson, who opened Lunar Massage near the Convention Center three months ago. She recently agreed to sell $75 gift certificates for $30. That entitled customers to a one-hour massage. She thought the deal would attract 150 people. In one day, 500 people bought the groupon. She finally had to cap it at 500. “My little studio can’t handle more than that,” she said.

She was happy to get all the money people paid for the groupons upfront and to get the customers, whom she hopes become regulars. “The cash infusion helps, and I get the exposure,” she said.

By Nancy Trejos  |  June 8, 2009; 8:25 AM ET
Categories:  Bargains , Nancy Trejos  
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Next: How to Navigate a Yard Sale

Comments

It's ironic that the Post's former Shop to It blogger hated coupons

Posted by: subwayguy | June 8, 2009 12:04 PM | Report abuse

It's only a bargain if you were thinking about doing it (or something like it) anyway. I saw the roster of recent coupons and decided to give this service a pass. I'll concentrate my energy on my $1-off-Colgate coupons (two of which I successfully deployed at Safeway yesterday, when Colgate was already on sale...score).

Posted by: Lindemann777 | June 8, 2009 3:43 PM | Report abuse

Cool concept, I like the viral nature of it. There are others companies doing this as well nationally and BuyWithMe.com says they are launching in DC later this June.

Posted by: DCnick | June 9, 2009 2:04 AM | Report abuse

Best way to improve your credit score folks.......


LIVE WITHIN YOUR MEANS

Do without those frills and new gadgets UNLESS they are absolutely necessary for your day to day survival.

Posted by: frankn1 | June 13, 2009 10:21 AM | Report abuse

The comments to this entry are closed.

 
 
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