Updated: 9/23/2010 9:00 AM ET|
Big discounts on little pleasures
"This is a much less expensive way of trying new places," says Hackney, who recently took a trapeze class with a $39 Groupon deal.
'Getting our brand out there'
How do the businesses make any money if they're discounting so deeply? Sometimes they don't. There are always going to be people who cherry-pick the best deals and never return.
What's just as likely is that people will discover a new favorite. Boston resident Angela Goff kept meaning to try a pizzeria near her apartment. But it took a BuyWithMe voucher to get her through the door.
"Now I go to it on a weekly basis," Goff says.
A Radisson Hotel in Boston's theater district recently ran a BuyWithMe promotion: $99 for a room, parking and breakfast for two. "We're not making money," hotel spokesman James Baker says. "But we're getting our brand out there -- we're getting customers who could be repeat customers."
Besides, those customers often spend more than the voucher's value. Martin Tobias, the CEO of Tippr, says merchants report that the discount translates into "a nicer bottle of wine (or) an extra appetizer."
That's not always the case, of course. I'm pretty good at keeping to the amount of the voucher and being courteously resistant to the "upsell."
Consumers 'get the buying power'
Worried about overbuying or simply nervous about committing? Maybe you should be. John D. Breyault of the National Consumers League notes that short-term deals create a sense of urgency that may tempt those on tight budgets.
"Don't splurge just because something is a good deal," Breyault says.
One tactic would be to join sites with three- to seven-day windows. Andrew Moss, the CEO of BuyWithMe, opted for weeklong deals because they allow people "to coordinate, plan and make good purchases."
Cutting out buyer's remorse is only part of the equation. Many of the offers at BuyWithMe appeal to groups, and group organizing is different than deciding to take your girlfriend out for a $5 martini.
"A handful of (our deals) you know you want right away," Moss says, "but you might want to talk to a few people if you're buying circus tickets."
Just ask Nuzhat Karim, who bought a couple of $15 tickets (normally $35) when the Big Apple Circus came through Boston. Friends and family members clamored to get in on the deal, and she wound up purchasing 21 more tickets.
Social buying allows Karim and her husband to try new restaurants without breaking the bank. "It's win-win: They get the customers, and we get the buying power," Karim says.
There's no question that social buying can prop up a budget. Through Groupon, Dallas resident Shellye Schormleitz paid $49 for a one-hour photo shoot for her daughter's senior pictures. Schormleitz bought an on-site car wash and detailing for $35 and gave it to her boyfriend on Valentine's Day.
"I'm a single mom with three teenagers, so I'm always trying to stretch dollars," she says. "Groupon gives me an opportunity to try new merchants and new things at a pretty reasonable cost, and to fill in the gaps when I need a gift."
The rules of the game
Play your cards right and you can bank half a dozen deeply discounted haircuts, massages or restaurant meals, either for your own use or to give as gifts.
Don't get carried away, though. Suppose you're allowed to get six vouchers for a hot new restaurant or swell salon. What if you don't get around to using them all before their expiration dates?
Or suppose the restaurant or salon closes? Breyault says you could contact your credit card company to ask for a refund, but it's still going to be a pain.
Be sure to read an offer's details carefully before buying. Breyault tells of a woman who bought a $150 salon voucher without understanding that it had to be used all in one appointment.
It wouldn't hurt to call the place of business before committing to a deal, Breyault says. For example, a small spa might have only one masseuse on staff, which means appointments are relatively limited. Or maybe the chiropractor doesn't work Saturdays and a weekday appointment is tough for you to manage.
Here are a few other tips from the pros:
- Be sure it's a good fit. Make sure you really want this deal -- and that the same service isn't available elsewhere for less. Fifty percent off a high-end salon's haircut price might still be more than you'd pay at a less tony cuttery.
- Bring your friends. Some sites offer incentives for referrals.
- Make vacations cheaper. If you know for sure that you'll be traveling, sign up for social-buy sites in those cities. You could save a ton on meals, hotels and attractions.
- Don't buy a voucher that's hard to use. For example, you might put off going to a restaurant that's two bus rides away.
- Save on gifts. If everyone throws in a few bucks, you could get a massage for the office manager. Your favorite Little Leaguer might be thrilled with an hour in a batting cage that cost you only $12.50.
- Date cheaply. If your companion is also a "frugalist," he or she might be tickled by the idea of paying $10 for $25 worth of pizza or barbecue.
- Don't stiff your server. If your $50 dinner set you back on only $25, please tip on the amount it ordinarily would have cost. After all, it's the owners -- not the foot soldiers -- who decide to advertise through social buying.
VIDEO ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
If your wallet is running on empty but you still have more shopping to do, we've got you covered. Here are 10 cool kid gifts that won't break the bank.