Why I won't be using Groupon again.. A consumer perspective.

[contactdick]

I took a friend out for dinner last Friday and thought it might be a good time to take the plunge and Groupon it. It was an £18 pound deal to get to get £46 pounds of food at a Tapas bar. My thinking went something like this. I like Tapas, the restaurant is a little out of the way but that's ok, the savings mean we can get some nice food, a good bottle of wine and try new place. So I made the booking, slightly curious about how it would all pan out.

When we arrived, the place didn't look too appealing from the outside though it did have that kind of Film Noire dirty back alley appeal which I guess is a charm in itself. But you can't judge a book by it's cover so I made joke about it, took a mental to at least Google Earth the next blind restaurant I book and strode on in.

It was a much more pleasant experience from the inside, a friendly waitress greeted us and asked if we'd like a bottle of wine. We ordered a pretty decent bottle - upper range of their price list and chatted about the menu. When she came back to take the food order, I pointed out that we'd be using a Groupon voucher to cover part of the cost of the meal (not that it should make any difference but just as a politeness thing). I did this in a slightly awkward apologetic way, using a voucher to pay for a meal isn't something I do often and it just makes me slightly uncomfortable.

As soon as this happened though, a dark cloud came over the proceedings. The whole atmosphere of the meal changed. The face and cheery demeanor of the waitress visibly dropped. It was like I'd sucked the fun out of her. She glumly pointed out the bottle of wine we'd ordered wasn't available on Groupon so we'd have to pay for that separately. The wording of the voucher had been 'Authentic tapas for two with bottle of wine at xxx tapas bar and restaurant - value £46.00'. We also had to order the other bottle which was not on the menu but priced around £20 pounds leaving us with 26 to spend on food (when we tried it later, even my limited wine palette could tell that £20 pounds wasn't exactly fair value for it). She did actually say to another waiter passing by "it's another Groupon on table 4" which did more to make us feel cheap and dirty.

Having read about the Groupon experience from a business side, I felt some sympathy. I know that %50 - %100 of the money we paid for the voucher was going to Groupon and that Groupon customers are apparently 'tight and argumentative' - they were probably sick of people like us by now and trying to recoup some costs with the old 'cheap overpriced compulsory wine switch'. Anyway, having £26 pounds left to spend on the food, we went a fair bit over. It was decent, but I'd never go there unless they were offering a massive discount as they were. Our portions were surprisingly small, and in my new found state of Groupon paranoia, I looked around at some of the 'non Groupon’ dish sizes for a size comparison.. I hope it was just my imagination. The meal ended up being £42 pounds + the £18 we'd paid in advance. £60 pounds for an average meal and two bottles of wine isn't great value, but more significantly, I learned the restaurant actually despised 'Grouponers' - clearly they had become jaded with the Groupon experience. Fortunately for us, we could simply scratch it from our list of restaurants to visit and forget the whole experience. As I was walking home, I went past the Tapas bar on my street that is only 3 months old but continually turns people away because they are too full. I had the realisation that good restaurants don't use Groupon because they don't have to - word of mouth is much more effective. Bad restaurants use Groupon because they have to - and any place that can discount so much for their customers makes me question how ridiculous their prices are to start. To any small business thinking about using Groupon:

1) The only reason I went there was for the discount 2) I will never go back there 3) If asked by my friends, I'd say it was overpriced (relative pricing is a powerful thing)

[patio11]

I think you might be overestimating how much insight the waitress has into the business. It may be the case that this was a close, family-held restaurant and they have a daily pow-wow on cost of goods and marketing strategy, but I wouldn't bet that way. My guess? Groupon customers are poor tippers, either from adverse selection or because they either a) attempt to tip with leftover funny-money or b) tip based on the amount they paid rather than the face value. Thus, mentioning you to other waitstaff: they're complaining about prospective tips. ("Gah, I drew another Groupon while you get a good table.")

Put it this way: if you had put twenty quid in her hand when you sat down she would probably have instantly become the most devoted Groupon fan in the world.

[glenngillen]

I took the same Groupon deal with a similar outcome (although we stated from the outset we had a voucher so no awkwardness about stuff we'd have to pay extra for). That said:

* This is in London, which doesn't have the same "tipping culture" as the US. Sure hospitality jobs don't pay great, but both my wife and I have worked them in the UK and you can definitely get by without tips. Getting snippy about a drop in tips is nowhere near as justified here.

* We each bought a cocktail before ordering (£8 each x 6)

* As is becoming the norm in London, "optional 12.5% service charge" (good luck ever opting out of it though) was a separate line item on our receipt and it was calculated off of the face value.

* I specifically checked the terms of the offer and the menu options prior to buying the voucher. Despite choose from "the tapas menu" you actually get to choose from "the Groupon version of the tapas menu". The latter being about half the size.

* I left an extra tip at the end mainly because I know the economics for the merchant on running Groupon deals. In hindsight neither the service not the "special" treatment you get as a Groupon customer warranted it.

Because of their attitude I won't be back, that's the cost for making an assumption about me as a customer. I'm still undecided whether I'll use Groupon again though. Maybe seeing this insight into this restaurant was a good thing?

[kenjackson]

I know one hamburger restaurant chain here in Seattle, the Counter, that is now on the second round of Groupon, and this round they offered two coupons per customer -- so my thought is the first round couldn't have went too poorly.

I went in with a Groupon and the experience was first class. Great service. They actually had one guy whose main job was to scan the Groupons. I asked him how things were businesswise with Groupon and he said really busy, but he said now that they can just scan them in, pretty easy (last round they had to look up each coupon by hand).

I of course tipped on the full amount, plus some, because the service was excellent. I liked my meal, and the wife and kids did too. We'll be back. And this is a place I may not have gone to w/o Groupon, although I had heard positive things from neighbors. But Groupon definitely got us the last mile through the door.

My feeling is that now, as a business owner that can use Google, if you don't know what you're getting into, you probably won't be business long with or w/o Groupon.

[hnsmurf]

Groupon customers are definitely poor tippers. I've known a number of waiters to complain about it.

The problem is they tip on the Groupon price, not the full price, and are thus tipping something like 40% of what they should be.

[contactdick]

I think you're spot on that Groupon customers are poor tippers. This was in the UK though where the tipping culture isn't so common place.

[dclowd9901]

This is why I despise using coupons (or gift cards, for that matter) in restaurants in general. Coupons, like it or not, have a distinct stigma associated with them that never nets you a pleasant restaurant experience.

More than anything else, I think the OP is complaining about restauranting with a coupon/gift card rather than utilizing Groupon, specifically. That said, he's correct that the model is broken for this very reason.

[andrewcooke]

also, it sounds like the company is (understandably) restricting what is available to try reduce the losses implicit in the deal. that means hassle for the waiting staff, who need to explain the restrictions. i imagine, for example, that in this case the waitress had previously had problems with a similar group who ordered the "wrong" wine and then were vocally unhappy. when they found out.

[matwood]

Groupon customers are poor tippers

And that stinks. I was a fine dining waiter at one point in my life and lived on tips. Because of that I always tip on the full value of the meal regardless if I have a gift card or coupon.

[rudepeklo]

I agree with the tipping problem, I myself try to tip based on the total value and not what I pay (because that may be just for a few drinks). I don't want the waiters to suffer for the business owners discounts :)

Here in Czech republic we have local variants of Groupon and in some restaurants people reported the despise from waiters too. Surprisingly, this did not happen when we went to one that was otherwise really expensive - the people there were very nice and friendly. We won't return there regularly because it's out of our price range but for special occasions I would like to go back.

Regarding the quality - from my experience it's about 50/50, some restaurants are bad, some are ok so maybe contactdick was unlucky in encountering the wors first.

[vamsee]

If you can put twenty quid in her hand, then you wouldn't be bothering using Groupon, would you?

[raganwald]

My perspective is that there is a systemic disconnect between what serves the restaurant's interests and what serves the staff's interests. A Groupon promotion may help fill empty seats and sell off perishable inventory, but that may not be a benefit for the staff that work for tips.

This is a massive problem for the consumer, because the promotion is for some specific food and drinks, but not for service. If the restaurant is unable to motivate the staff to like the deal, you may have to negotiate separately ("I know these deals can be a PITA, but we intend to tip on the face value of our meal"). This isn't the customer's fault, of course, and I sympathize with the OP for crossing this restaurant off his list: Why return to a restaurant that doesn't work out how to make their staff happy about the promotion?

A bigger question is whether this is an isolated incident or something to expect when dealing with similar deals. From what I know about the way small restaurants are managed, I would expect this to happen on a fairly regular basis.

One possible solution: The fine print of the deal could levy a 15% gratuity on the face value. Customers who want the freedom to tip less should exercise the freedom to pay the face value of the food and beverages. If I was offered a $100 dinner for two for $40 plus $15 mandatory gratuity, I don't think I'd bark about it.

[lucisferre]

I wasn't aware tipping was all that common in the UK but here in Canada I would be wary of using Groupon for that exact reason. Personally I find tipping to be a nearly meaningless exercise (nearly because occasionally great service deserves a bit extra). Because I live in a country where we are expected to tip, restaurant owners do (and are allowed to with lower minimum wages) expect to be able to underpay their staff and let them live off tips.

It is to the point where most chains have a tipping system where wait staff tip out to everyone, chefs, bussers, etc so everyone gets a chip at it. If you undertip the wait staff can actually lose money.

I'm tired of being responsible for someone elses paycheck. Most restaurant waitstaff are merely ok, not amazing and not deserving of something extra, nonetheless I feel obligated to pay 15%+ anyways because of the culture.

Worse than this there are many here who despite the tipping culture feel perfectly free to never tip or undertip, leaving the rest of us to make up the difference (how do you think we go from 10% being a normal tip to 15-20%?).

It's for this reason alone and because I know most Groupon users are brutal cheapskates I will probably never take a Groupon for a restaurant. Though one persons advice to tip up front or at least let the waitstaff know you have no intention of only tipping on the remainder is valid and if you are going to get a groupon deal you'd do well to remember that.

What sucks about this whole anecdote is it means owners using Groupon are getting doubly screwed. They are getting one-timer coupon clipper who don't care about the crap service since they are never coming back anyways, and they are getting potential first customers who are not going to come back now because of the bad service. Even worse they will likely get negative word of mouth.

Of course there is a simple solution here, plan ahead and don't mistreat your staff by making them beg for tips. Personally I have zero sympathy for restaurant owners since they themselves are the ones who maintain this bullshit tipping culture.

[glenngillen]

You've hit a few proverbial nails on the head for me there. Having lived primarily in a number of countries where tipping was entirely optional and rarely more than 10%, I still find it awkward when I travel to the US. I generally follow the 20% lead these days but the figure is always determined based off the service I've received, as I've justified the absurdity of it as "the wait staff get ripped off by not being paid a fair wage and I have to top it up for them". There have been occasions where we've dined in quite expensive restaurants in NY and the food has been bad enough for me to send back (something I'll rarely do). But on both occasions the wait staff were polite and understanding and stuck the items off the final bill. I stilled tipped at 20% of the original bill + a little extra because at the end of the day the fact the meal wasn't cooked wasn't their fault and I didn't think they should be punished for it. Sharing that tip with the rest of the staff makes a mockery of the whole process and my justification.

And then I think; In almost every other profession you're expected to do your job to the best of your ability every day. Your "tip" is still being employed the following week.

[mchusma]

"I'm tired of being responsible for someone elses paycheck."

I agree, I think mandatory tipping is absurd. I think people partially disassociate tip with their assessment of a restaurant's cost, so is a way for restaurants to appear cheaper. I think wait staff should perform to the best of their ability or be fired. I find it ridiculous to pay someone $1 to open a beer for me (ie. a bartender) or spend 30 seconds taking my order and then bringing my food out to me. Other times you are expected to tip maybe $1 for someone rigorously drying my car after a car wash. Seems disconnected. I hope technology helps offset this cost (automatic bartenders/ordering machines).

I'm also not sure why some restaurants have not tried to create a model of anti-tipping. I know many people that would like to go to a place that essentially says: "We pay our people well, if you feel that you have gotten a great experience, please tip by sharing us with your friends or donating to this charity."

[hnal943]

I'm tired of being responsible for someone elses paycheck. What's the alternative? Do you think the total cost of the night out would go down if the waitstaff was paid more? You're going to be paying their salary one way or the other, it's better that you get some input on their performance I think.

[wccrawford]

It's really sad, because it's not only good restaurants that do the Groupon thing. It can be a good way to advertise your business in addition to the standard (boring) ways.

Any restaurant that treats their customers like crap because the customer uses a deal that the restaurant approved is... Well, rude. I don't have much use for rude restaurants. For a lot cheaper, I can cook the food myself, and it's probably as good. Worse, the time spent is about the same, too! And cooking can be fun.

So in the end, what does a restaurant offer me? New dishes, and good service. Most restaurants don't have the former, so that just leaves good service.

The restaurant in this post failed at the only thing they can offer their customers. And all because they made a bad decision. (I'm assuming they think it's bad because of their actions.)

I'm not a Groupon apologist. Some of the tactics I've heard lately are downright dirty, and detrimental to both the restaurant and Groupon both. But it's not inherently a bad thing.

[drivingmenuts]

There is a distinct possibility that restaurant owners approved the deal with Groupon but staff is left to suffer the consequences, possibly with little warning from management or the owners.

The restaurant business is not exactly raking in the big bucks right now, with the continuing (and deepening) recession, and the owners may have signed on in desperation to claw out whatever money they can.

[contactdick]

I should say the service wasn't horrible - it was just so noticeable the change in attitude from when we were regular customers to 'Grouponers'. I do like the point that half the value of a restaurant is the service. Except in Chinese restaurants, my favorite one has terrible service but the food is great and it seems to add to the character of the place.

[ahrens]

I think the biggest problem is that the staff and sometimes the owners don't understand what is the biggest possible gain - to get people in the door and then blow them away with great service and great products. I guess Groupon and the other giants probably don't tell the companies this enough. If I buy a coupon and get great service (pretty much the opposite of the story above) I would come back and recommend it to my friends. What companies end up doing, is paying through their noses to spread bad reputation about themselves.

If the restaurant would have treated the customers like all the other guests and maybe let them order the more expensive bottle of wine while explaining that it's actually not included (with a smile!) those two guys would have walked out happy and would probably have returned.

Groupon and the other coupon sites is a marketing expense, so treat it like one. You don't put up ads in the magazine with a discount and then scare away the customers when they show up! I don't defend the coupon sites, they seem to take a whole lot of the money for a small benefit. However, if you go into the deal, you might as well make the best of it. They will use the groupon no matter if you're nice or not.

[cletus]

I see 5 problems:

1. An offer for "Pay $X for $Y of Z" have at least anecdotally led to people spending $X+(small number) where a lot of those who offer such deals are expecting more (the Gap was a notable example of this). Perhaps a better model is a capped percentage discount on the bill?

2. Evolving social etiquette of tipping. It may simply be that people are unaware that the right thing to do is probably to tip on the undiscounted price. Or it may simply be that those who are inclined to use Groupons are simply cheap. I expect it's a little of both;

3. No caps on offers is a big problem. It means businesses can't budget what are basically marketing expenses. For this to work you need to be able to track individual offers (so a person can't use the same offer twice). This has the added advantage of you being able to mine this data as you know who used an offer, when they did, what they spent, what other offers they've taken and so on;

4. Businesses seem to resent people using these coupons. This I don't get (other than the complaints of wait staff). It's a marketing expense. If a Coolhaus truck can sit a block away from my office in downtown Manhattan giving out free ice cream sandwiches for several days (raising awareness and creating a lot of good will) then you, as a business, owe yourself this: leave the customer happy. If they're unhappy you've just wasted your marketing spend on them; and

5. Having to ask for the offer upfront is BAD. It's awkward. It leads to at least the suspicion of getting smaller portions or otherwise getting the cheap version. It probably means you'll get worse service. The offer should simply be X% off a bill (max value $Y). Exclude alcohol entirely.

Honestly I expect Groupon to sink into the ocean. Businesses don't seem to like it. Consumers are having mixed experiences. The early investors have been paid off with large F/G rounds. Revenue per customer is decreasing. What Groupon is doing isn't exactly rocket science. I kinda see small investors being left with the bill for all this post-IPO.

It's a shame really because I see such things as a great way to promote a restaurant (which is actually hard).

[contactdick]

I'll certainly watch the IPO though I won't be participating. My understanding is that they think they have a competitive advantage coming from the Groupon voice https://docs.google.com/View?id=dmv9rbh_2g92x4scj&pli=1&... - the way the write their ads.

[jcromartie]

I don't use groupon for restaurants or services because I'd probably hate it if I were in their shoes. I think business owners get roped in the same way that artists or programmers do free work because "it'll look great on your portfolio/resume".

[contactdick]

I think you're right that they don't love it - and if I were in there shoes I'd have trouble keeping a pleasant demeanour if I was losing money from people being in my restaurant too!

[ben1040]

A few weeks ago a tapas restaurant in my city ran a Groupon for the second time.

The comments on the deal were nearly universally from people who had purchased the first coupon, and when they tried to redeem them staff at the restaurant treated them like lepers.

I've only bought and used one restaurant Groupon and honestly I didn't really had a problem. Then again I didn't show it until it was time to pay (are you supposed to show it when you order?). It was a $15 coupon and we used it to cover part of a $50 tab for dessert and drinks. I imagine that was probably not the norm, and they likely more often see people who spend only $14 and ask if they can have a dollar in change.

[contactdick]

I have no idea whether you're supposed to show it up front or not either - it didn't say on the voucher. I felt as though I should at least tell them.

[ssebro]

I had a similar terminal groupon experience: I had meal of really, really bad indian food, at a restaurant I would never have tried otherwise and when I mentioned I was going to use a groupon I was told that my bill now included a 15% non-negotiable "service charge". In fact, my bill was taken back and changed so it was clear that the "tip" was compulsory.

[rmc]

Is that legal? Can restaurants legally include a serive charge?

[AndrewWarner]

I've found that it's best to show the Groupon when it's time to pay the bill. I know we're supposed to show it when we sit down, but no restaurant has ever complained.

[pseudonym]

It sounds like a rather depressing experience, and I'm rather sorry to hear that.

That said, would you consider going back after the groupon deal, just on a purely scientific basis, to see what you'd rate it at based off a clean slate? I'm mildly curious about the actual differences when the place actually wants you there, as opposed to "handling" you.

[contactdick]

I like your commitment to proper scientific process but I'm not sure I could bring myself to go back though - my heart is no longer in it..

[acgourley]

that sample size isn't very scientific anyway

[infinite_snoop]

I've just recieved an offer in a Groupon mail listed as:

£69.95 instead of £239.00 - Classic Black Pentax I-10 Digital Camera with Kodak Portable Charger at Teqport

A quick search on Amazon shows it available at £74.98.

[rsheridan6]

A restaurant wouldn't be able to do that because they'd scare off their regular customers. But for anything where they can set a special price for Groupon customers, I'd suspect they were giving a discount on an inflated price.

[snorkel]

No doubt waiters loathe serving Grouponers.

[rb2k_]

I know that waiters in the US rely on tips, but I think it's unprofessional to deliver bad service just because they think that they won't get a good tip.

Which is strange considering that people tip for good/professional service. Maybe there is a self-fulfilling prophecy somewhere in there :)

[contactdick]

I'm starting to think of them (and myself as one of them) as a blight on decent society too :)

[jdietrich]

If an established restaurant sees any sense in offering a 60% discount, it's probably already fucked. You said that the restaurant looked dirty and uninviting from the outside. That would be fine if it was part of a successful restaurant's branding, but clearly they're not successful, otherwise they wouldn't be offering a 60% discount.

Groupon is for the most part the small business equivalent of Pets.com losing a buck on every sale and making it up on volume. Anyone who has been in the business for more than five minutes knows that voucher customers convert very poorly to regulars. Given the size of the discount and Groupon's cut, there's no way that this restaurant could be profitably converting, particularly if they're making no effort at all to do so.

Badly run businesses are badly run; Film at eleven.

[tibbon]

I'm really curious to see which way Groupon goes in the long term. With things like Yelp reenforcing a feedback cycle which directly effects the eating establishment in the long term, it rarely becomes all that great of a deal for the restararaunt or the consumer.

[contactdick]

I agree, in the internet age I was hoping searching would become more efficient so that 'find good restaurant in xxx' was a sensible thing to type into a search box. Currently there's too much noise so places like yelp are a much better option. Interestingly Yelp hasn't taken off here yet.

[mstolpm]

Sorry to hear about your experience, but to be fair, I have to admit that I personally had just one bad experience in about 25+ visits of restaurants in Germany and Austria due to Groupon and Daily Deals offers. That location turned out to be overcrowded and the staff rude.

The other visits were pleasant or at least we had no complaints afterwards. We DID go back to some of the restaurants (even without coupons) and recommended some to friends. Some others aren't really nearby, so we might not visit them again, but I'd recommend them as well.

However, I first google for reviews of the restaurants/companies before buying a deal. I'd not buy a deal for a restaurant with no or only mediocre reviews. And I present my coupon before ordering - that would have saved you from the bad experience with the first bottle of wine.

Of course, it greatly depends on the restaurant. If they don't plan the Groupon project, they may get overrun shortly after the deal. And the tip problem is already mentioned - so staff isn't always glad about "deals customers." I've even heard discussions with "deals customers" on a neighbor table that insisted of getting money back because their bill was lower than the deal.

Worst I experienced was not with a restaurant but a deal for a walking tour. The company was totally overbooked, promised to provide more dates for tours, but never delivered. Even 6 weeks after the deal, customer service turned out to be great and refunded the deal promptly.

A friend of mine bought a deal from a small photo studio (90% discount) - and yet (about 5 months after the deal) waits for a confirmation for an appointment: "We are fully booked until at least end of next month." Hopefully, the studio will be still in business at the time he gets an appointment (or he gets a full refund).

Its not Groupon or Daily Deal to blame for bad experience, but the business owner. But due to the growing popularity of the deals, places are more likely to get crowded after a deal. And because Groupon and co think that "the more, the better", they approach businesses as well that don't deliver great service all the time or are just unable to handle the amount of deals sold.

[chrislomax]

I think Groupon suits the purpose if you would be visiting a restaurant that has a usually high amount of coupons or vouchers changing hands. Here in the UK if Franky & Bennys offered the coupon I don't think I would think twice. I think also if it was for somewhere I frequented often and I know the standard of food is good then I would do also.

We had a situation earlier this year with a voucher where the terms were not fully explained, we went to Manchester (England) and sat down in a restaurant called Giraffes. The voucher did not explain that it could not be used before 7pm. It was 1 in the afternoon, I sat there regardless and continued to be ripped out (£8.50 for a breakfast, cheapest thing on menu) and in total paid £40 for some dinner.

In terms of tipping, I generally leave a tip if around 10%, more if the person waiting is really good and a good personality, less if I think they are over acting it to get a higher tip. They don't get anything if the food is crap or over priced. I don't think I have been anywhere recently where I have not used a voucher or coupon, it's not because I am tight, it's simply because they are there. I don't consider myself a bad tipper either.

I know what you mean though about feeling bad about using vouchers or coupons, I feel slightly guilty about it. I think the English culture is slightly different though, I think we don't like confrontation and I feel this goes into that realm.

Stick to voucher cloud, check the terms though properly before sitting down!

[contactdick]

That's very true, though if you only go to places you know and trust then Groupon isn't doing it's job for the restaurant! They're simply giving a discount to loyal customers.

[padmanabhan01]

Restaurants should either not go for Groupon. If they do, they have no business despising Groupon customers. Doing that makes no sense. It is they who decided to go for it in the first place.

[contactdick]

Absolutely. But I think there is a disconnect raganwald points out between the owners / managers who had the idea of going to groupon and the staff who feel it's effects.

[rsheridan6]

I've used Groupon several times, and I've never had an experience like that. I don't get the feeling that I've been treated differently or badly after showing the Groupon.

>Bad restaurants use Groupon because they have to - and any place that can discount so much for their customers makes me question how ridiculous their prices are to start.

In my experience, the restaurants that use Groupon are mediocre to good. Maybe it's a regional thing, but there are so many restaurants here that even many good restaurants aren't very busy.

[daimyoyo]

What this restaurant didn't seem to understand is the fact that groupon is like any other promotion. It's a loss leader that brings in new business. Perhaps the groupon customers wouldn't have been so bratty if the deal had been worded better, but who knows. The thing is that places like restaurants rely on repeat business and word of mouth as their primary sources of customers, and that's what groupon is designed to bring. I think the fault here is not in groupon's hands but the restauranteur.