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Trying to take advantage of all those Groupon deals

Marketplace's Jennifer Collins on a Segway tour in Long Beach.

TEXT OF STORY

Tess Vigeland: Rumors abounded this week that Google will pay more than $5 billion for Groupon. That's one of the biggest online daily deal pushers, offering coupons for things like spas and restaurants and experiences.

We asked Marketplace's Jennifer Collins to sample as many of those deals as she could in a week, which is when she discovered the Groupon conundrum.


Jennifer Collins: This is me: Most nights after work, I curl up with a good book. Play a game of solitaire

Collins: Yes, I won again.

Enjoy a little light viewing.

TV: Tonight on "Frontline": Breaking the Bank.

This is me on Groupon.

Collins: Yeah!

Hanging on for dear life to the mechanical bull at Saddle Ranch Chop House. I dragged along a couple of girlfriends to help with my research.

Maria: We'll be cheering you on, so whenever you feel like you're ready.

Just in case you've missed out on the Groupon craze, here's how it works: The company sends you an e-mail everyday offering a half-price deal at a local store or restaurant. If enough people buy in, everyone gets the deal.

For Saddle Ranch, I brought along two half-priced Groupons. That would have given us $60 to spend on our apple pecan salad, our mai tais...

Maria: Along with the monster platter of appetizers, "ideal for two or more hungry ranchers."

Thing is, the restaurant would only take one Groupon per table -- and that left me with a tab of $30. Which brings me to Groupon lesson number one: Don't actually try to use your Groupon with a group. Maybe I'll have better luck with my next deal.

John Huntington: My name is John Huntington and I own Long Beach Hydrobikes.

Hydrobikes are like mini catamarans with pedals. Huntington rents them out by the hour. And when he offered half-priced rentals earlier this year on Groupon, he was swamped. It's not hard to see why.

Sound of water

Collins: Oh my goodness, did you see that pelican?

Liz: Whoa, he's eating a bird.

Problem was, Huntington only had seven bikes at the time. That brings us to Groupon lesson number two: Just because you buy it, doesn't mean you can use it anytime soon. You may have to wait weeks for a reservation.

Joseph Priester teaches marketing at the University of Southern California. He says people often jump on these deals simply because they're, well, deals.

Joseph Priester: So it seems really good, but when you actually get to the nuts and bolts of executing it. It might actually be difficult to ever find the time that you could redeem the coupon before it expires.

I'm still sitting on an Ethiopian dinner, a cooking class -- not to mention the Groupon left over from Saddle Ranch. I'm so stressed out by trying to use my Groupons, I'm going to need a Groupon for therapy.

So now, Groupon lesson number three: It can cost a lot to save money on Groupon. Take my next adventure: I spent 25 bucks on gas and three hours in traffic so that I could take advantage of a half-priced Segway rental. You know Segways, those two-wheeled things favored by mall cops.

Collins: I'm on a Segway in Long Beach. Pretty much the funniest thing anybody has ever seen.

Joseph Priester says we should put a value on all those hours we spend on Groupon.

Priester: So, the real consumption is time. And if you end up spending those minutes trying to do something that you normally wouldn't have normally done because you save $30, I think that's where it can get pernicious.

So does that mean I shouldn't take advantage of the deal I just saw, the 60 percent off for a spray tan?

Looking very pale in Los Angeles, I'm Jennifer Collins for Marketplace Money.

About the author

Jennifer Collins is a reporter for the Marketplace portfolio of programs. She is based in Los Angeles, where she covers media, retail, the entertainment industry and the West Coast.
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I thought Jennifer Collins' analysis of Groupon was quite shallow and misleading. Of course, the set-up to use as many Groupons in a week is completely unrealistic as well. But basically, she gave a bad rap to a really fun, quirky service that could add a dimension to her life had she used it well. Google didn't just offer 6 billion dollars for it and Forbes didn't call it the fastest growing company in American history because it doesn't work. Au contraire - it works and people so far love it, including me.
Groupon Lesson #1: pass on most of the deals and pick ones that are things you would do anyway, increasing the likelihood of using it. That way you can try new services or restaurants for less.

Groupon Lesson #2: Occasionally try something you would never do just for fun - it is cheap!

Groupon Lesson #3: Don't try to redeem it in the first or last few days of the offer when the place will be mobbed. You have about 6 months to use the coupon - work it out.

Groupon Lesson #4: The group refers to the members' purchasing power, not your group of friends. Most services offered work for one two people. The fine print is quite well spelled out and clear if you read it. Don't expect to take a big group somewhere and pig out for free. This is for sampling new stuff and possibly finding a new future favorite place.

Sorry, but that was just bad reporting. Groupon.com has numerous faults, starting (but not ending) with the requirement to provide your email just to VIEW their website, but you MISSED the real faults and instead blamed your OWN purchasing issues on Groupon. LESSON 1: Name a business that DOES allow you to STACK coupons - please, I want to take advantage. LESSON 2: You purchased a Groupon (which SPECIFICALLY requires a minimum number of Groupons to be sold) and then you were surprised that they were booked - call ahead. LESSON 3: Don't purchase a Segway rental if you aren't fascinated by them. Yes, it's easy to get caught up in the frenzy of ANY sale and purchase items we don't need; we all do it, but that's OUR problem, NOT Groupons.

PS. Discount aren't always half price - the discounts vary

I use Groupon.com frequently. I enjoyed hearing Jennifer Collins report about trying to use Groupon as much as possible in one week.
I do find good value in Groupon as my wife and I are empty-nesters now so we have more time and interest in trying new restaurants and stores. Groupon's value added discount allows us to get out there and sample new places. I usually buy two Groupons per week, but my purchases arebbased on my likelihood of purchasing from the vendor whether or not I have a Groupon. I never buy a Groupon that requires me to go way out of my way. I rarely find that I have a problem with Groupon because I read the limitations carefully. Whenever I find that I purchased a Groupon that I will not be able to use, Groupon has refunded or credited my money at my request. I like the low risk of being able to return Groupons if they end up not being a good purchase.
I do agree that the name Groupon is misleading...it does not work well for groups, but the group purchasing tipping point does apply. I for one like Groupon and disagree with the evaluation that Jennifer Collins provided of Groupon, but I understand we have different values when it comes to purchases.

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