Have you bought a voucher from a website that enables you to eat out at a restaurant at a discount? If so, you are part of a multi-billion dollar group buying industry.
With group buying, you purchase in advance from a specialist coupon/daily deal company. The company then gives you a voucher, that you print off and present when you redeem the service that you need. If you are planning on going on a holiday or out to dinner sometime, the idea is that you purchase now when the item is on special, then you use it when you need it. Most of the deals are advertised online.
For example, you might pay $50 for a meal for two that is normally worth $100. You purchase the voucher online on Monday, you make a booking for a restaurant that Saturday and then present the voucher at the end instead of paying. Well, you might need to pay extra if you order extra items but the idea is that you have prepaid to access to a special deal.
I have used several of these. It is important to communicate up front with the restaurant or provider so they know what you are redeeming. There are sometimes restrictions such as on times available (e.g. with travel), or on the type of food you can order (with a restaurant). One restaurant I visited had certain items that it did not include (e.g. any entree/mail except for certain larger dishes), and it was important to be aware of that and order around it.
How it works is that the coupon company agrees to promote the services of certain companies on the condition that those companies provide large discounts to the consumers. A key issue here is that the service/product is not provided by the person you actually buy it from. Further, there can be issues with meeting all the conditions (e.g. must be used by a particular time – difficult to lock in if say a restaurant suddenly becomes busy and you can’t get a reservation before it expires).
According to NSW Fair Trading, it ‘has received an increasing number of enquiries and complaints about group buying, particularly in areas such as hair, beauty and personal care services, restaurants and cleaning services. Common complaints include non-supply and incomplete supply of goods or services, and difficulty in booking services and redeeming vouchers.’
It provides the following tips for consumers:
Consumers considering a purchase from a daily deals or group buying website should:
- be aware of what goods and services are being offered and what is not included in the deal
- check the terms and conditions of sales on group buying websites carefully, including expiry dates on vouchers
- check with the website to see if they give refunds if the service provider goes out of business before vouchers are redeemed
- be prepared for delays in making bookings. Group sales can create a lot of demand.
Some companies operating in Australia include:
- First table. Want 50% off your food bill? Yep, 50%. It is possible when you book an early bird special through First Table. I tried it out recently. It works like this: you pay $10 to book a participating restaurant for a table of two or four, and then you are entitled to 50% off the price of the food bill (drinks excluded). The catch is that you have to arrive on time and not linger. This is a good option if you want to grab something quick to eat before say heading to the theater or to see a movie. It is not so good if you are planning on a multi-course meal with friends. Unlike other deals below, you pay the restaurant after you have dined (but you pay for the voucher upfront).
- Cudo (previously Living Social). A friend at work recommended this to me when I wanted to go and get a massage as her favourite Thai massage place was often featured. I was stressed at the time and this was just the trick. Cudo has a range of short term specials on restaurants, experiences and travel. Some of the luxury travel is pretty swishy – I had to unsubscribe from the daily email alerts because I found myself daydreaming of exotic luxury holidays and it was getting a bit distracting at work. The offers in Canberra are few in number but exceptionally good value. I have had three cost-effective meals courtesy of Cudo, including a group meal for three couples. I find merchants will be keen to match the deal without the voucher – twice businesses have offered me the same or similar deal when I inquire about or present the voucher. I do not understand the pricing system, but suspect businesses must pay Cudo a fee every time a deal is redeemed. Accordingly, once they have made contact with you, some businesses will be keen to have you back again at a lower price than that offered to the general public.
- Spreets. This is an odd name, especially as it has another urban use meaning (which I will not explore here). Spreets isan founded Australian company, which was purchased by Yahoo for $40 million in 2011. I had never heard of it before one of my readers mentioned that she uses it. But now that I know about it, I will be visiting it again because it pulls together many of the best deals across several sites, including Cudo, Scoupon and Groupon.
- Finder. Like Spreets, Finder provides an amalgam of other deals. Finder is a heavily promoted website that aims to offer the best deals on a range of financial products. When I clicked on some special coupons advertised, I found that many were not really coupons in the true sense – more like advertised specials (e.g. Chemist Warehouse had a 50% off coupon, but really it was their guarantee to cut the cost of most prescriptions by 50%). This is worth a look but I don’t think it is as useful as Spreets.
- Scoopon. Scoopon part of an Australian start-up story, founded in a garage in 2010. Its best-known sister is Catch of the Day (more on that below). It claims that a deal is purchased through the Catch group every three seconds, and that it services 2.5 million deals a day. Impressive figures. It doesn’t operate in Canberra, so I don’t use Scoopon but I might when visiting family in Melbourne or the Gold Coast (yes, I have family who live on the Goldie). It has some restaurants, but its strength is good accommodation and travel deals.
- Groupon. Groupon has been in Australia since 2011, but it is far from being a newcomer to the world of coupon savings. Within Australia, it has a customer base of 5 million customers who have purchased 15 million vouchers. Globally, the Groupon App has been downloaded more than 139 million times. Originally launched in Chicago, it was a stock market hit when it first launched but then didn’t take off as quickly as expected because of copycats and other contenders (Groupon bought Living Social in 2016). But the product has been increasing in demand since actress Tiffany Hadish took Will Smith and wife Jada Pinkett Smith on a swamp tour to watch alligators using a Groupon voucher. Groupon’s interface is very slick, and the app is extremely easy to use. It has a good selection of special deals – even for Canberra. This is my new go-to app for special deals when travelling interstate – or even overseas.
Have you purchased from a group buying site? If so, what did you buy and how was the experience? Did you save a lot of money?