Streams

Please Explain: Coupons

Friday, June 17, 2011

The old cost-saving measure of clipping pages from the backs of newspapers has been transformed into a multibillion dollar industry by the advent of Groupon, the online group coupon service. Felix Salmon, finance blogging editor at Reuters, and Andrea Woroch of Coupon Sherpa, talk to us about the history of coupons, reveal why they're such a boon to businesses, and dissect Groupon's business model.

Do you clip coupons? Have you used daily deal sites like Groupon and Living Social? If so, tell us about your experience!

Guests:

Felix Salmon and Andrea Woroch

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Comments [21]

Amy from Manhattan

thatgirl, on the off chance you come back & see this, citydweller said Walmart was making the middleman (not the consumer) more powerful than the manufacturer.

Jun. 19 2011 11:26 AM
Andy Cohen from New York, baby

Is there something wrong with your guest Andrea? She is eloquent but she is so on-message that she sounds like a politician at a debate. Why isn't she answering actual questions instead of giving canned -- albeit clearly delivered -- responses?
Also, next time Leonard, in lieu of the bloggers, you may want to bring in a professor of pricing. The top business schools all have at least 1 pricing expert.

Jun. 18 2011 02:00 AM
Ariame from NYC, NY

I got a coupon from living social for a cleaning service for 60$. I didn't know, till after I bought it and tried to use it, that there was an additional 40$ mandatory fee for tax and gratuity. Not much of a deal.

Jun. 17 2011 07:29 PM
Amy from Manhattan

Oh, yeah--there are also coupons that require you to buy multiple items to get the discount. For example, if it's $1 off on "any 2 items" of the brand, you're only getting $.50 off each item. Not a hoax, but somewhat misleading.

Jun. 17 2011 02:10 PM
thatgirl from manhattan

good points, citydweller, but wal-mart has hardly made the consumer more powerful than the manufacturer--like in vegas, the house almost always wins. to wit:

http://www.fastcompany.com/magazine/77/walmart.html

Jun. 17 2011 02:09 PM
Amy from Manhattan

In addition to the cautions Andrea mentioned, e-coupons even from reputable sources can be spoofed. Make sure the links in any communications that appear to be from these sources actually match the text on the screen.

To go back to the low-tech, what about coupon books? Sometimes they're specialized, e.g., for health food. I pick up "Mambo Sprouts" & "Healthy Clippings" from health food stores. They can be a good deal, but not all stores accept them.

Jun. 17 2011 02:02 PM

On a more serious note - I have no sympathy for companies that get burnt by coupons or that suffer the unbearable burden of people using them who won't purchase again.

As consumers, we face a constant inundation of messages from corporations and businesses. A good percentage of them are trying to get one over on us in some way.

It's clear who has been making out better overall - the standard retail model has us paying as much for the privilege of buying a product as it does to make it. Corporations like Walmart has made the middle man more powerful than the manufacturer. I believe that eventually, we'll find this model is unsustainable.

Also, those of us who use a coupon and don't go to a place again (I have definitely done this in most cases) would probably never have tried it in the first place, meaning the retail price isn't worth it.

Someone asked something about "don't customers get used to waiting for sales"? The truth is that they don't. Businesses thrive off of the poor decisions of most people. Most people buy what they want now, and they do it on credit. This has gone a long way towards our unsustainable economy.

Jun. 17 2011 01:58 PM
Yuko from Midtown Manhattan

I got to a great pilates studio near my work. The instructor and owner is highly trained with a lot of experiences.
I have recently heard him complaining about Groupon. By other studios, possibly not as trained, offering 'deals', it would affect his and other serious studio's pricing in a long run by triggering deflation. The more deals are out there, the less people are willing to spend on pilates and yoga studios.
His classes are not cheap, but definitely worth it. And I know he is not making too much money from what we pay.

I don't participate in Groupon for this reason. I am running my own business, and I definitely don't want any serious studio suffer or loose money.

Jun. 17 2011 01:50 PM
Truth & Beauty from Brooklyn

I use coupons regularly, but I prefer the ones I clip out of the Sunday paper.

Every Sunday morning, I check four circulars on line for sales, but I only check stores that I shop at regularly and items that I normally buy.

I also have the store membership cards to get additional discounts.

I have found that one can spend far too much time on coupons and I feel that as my time is worth money, too, that I have to keep a lid on it.

While Vendors find it best to offer a wide variety of coupons in an attempt to get new customers, wise customers only bother with coupons and shops they normally use. Spending money for items you don't use just to take advantage of coupons is ridiculous.

I do, however, clip ALL the coupons from the paper because I share them with a network of friends. They give me coupons for things they know I use and vice versa and we all come out ahead that way.

:-)

Jun. 17 2011 01:50 PM
Susan

I lived in NYC for the last 20 years. I recently relocated to the south and am amazed at how everything is so coupon oriented down here.

I never used coupons when I lived in the city. I think it's because like the previous post says, I just don't have the time or attention span to deal with them.

Most food coupons are promoting commercial unhealthy food anyway.

Jun. 17 2011 01:49 PM
Sara

I really like the Groupon-type coupons for restaurants - they give me an incentive to try new places. I especially look for ones in or near my neighborhood.

Jun. 17 2011 01:48 PM
Ben from Park Slope

Leonard,

Your caller should know that monthly shipments where you are charged on a recurring basis (opt out not opt in) are ILLEGAL in New York State! We are one of the few states where such charges are illegal.

Jun. 17 2011 01:48 PM
thatgirl from manhattan

beware the point of sale offers at places like loehmann's, offering to sign you up for "free" magazines. the magazines get access to your credit card information and automatically sign you up for a full-priced subscription after the "free 3-6 month subscription" period. the practice should be illegal, and loehmann's slapped for the practice.

Jun. 17 2011 01:47 PM

One subject that you haven't covered is personal coupons, such as when one offers a special deal to their friends. For instance, I will only allow my girlfriend to bring her catty obnoxious friend Sally with us to the movies if she agrees to buy me a large popcorn.

Jun. 17 2011 01:47 PM
stuart from manhattan

What about banks? I see offers for getting cash for opening an new account with direct deposit, but a long-time customer at the same institution gets nothing.

Jun. 17 2011 01:42 PM
clark from nj

I completely agree with all the previous comments.
My time is more valuable than saving $0.50 on hotdog buns.
Macy's can't stop with their weekly coupons or sales.
It's just annoying.

Jun. 17 2011 01:39 PM
Ken from Soho

I get mailings from Groupon, and have never used it. Most are for things that I have no interest in, and when I occasionally may have an interest, I'm not going to lock myself in , in advance, by buying a coupon for it. So the whole thing makes no sense to me.

Jun. 17 2011 01:38 PM
Amneris

Most of the grocery store coupons I see are for items that are over processed and unnecessary.

Jun. 17 2011 01:35 PM
Steve from Rockville Centre, NY

I hate coupons! It's so much effort, and then when I finally go to the store or website, I discover that I either left them at home or they expired. I think companies are frustrating their customers, not making them happy. You always feel cheated.

Jun. 17 2011 01:29 PM
thatgirl from manhattan

i never realized how a simple proposition to "save" on a potential purchase could overwhelm, even devastate a small business when offering something like groupon. i've met several that would never use it again, and now it's common to read yelp reviews and the volume of businesses for whom groupon is a bain, rather than a blessing.

Jun. 17 2011 01:22 PM
Sandra from da Bronx

Whenever I get a Club Card that's suppose to "save" 10%, I ALWAYS end up buying 50% more!

By paying (the best) full-price I buy ONLY what I need and use and REALLY save!!!

Jun. 17 2011 11:06 AM

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