Wednesday, March 7, 2012

In the News: Are Daily Deals a Bargain?

I used to think that daily deal sites like Groupon, Seize the Deal, and the locally-owned Sweet Find could become a way of life, providing deep discounts without the hassle of clipping coupons.

In case you're not familiar with these sites, here's how they work: they email you daily with a discount on a product or service, usually 50% off or more. You're given a certain time frame in which to buy (24 hours, although some deals extend into the weekend). Like a coupon, there's an expiration date on your deal, so you have to redeem it before time runs out.

Daily deal sites sound like a great way to save money, but I'm finding them less valuable than I would have expected. Today, Groupon offered smoothies at 59% off, while Seize the Deal advertised unlimited tanning and Sweet Find invited me to purchase tickets to the circus. None of which I'd be likely to buy – deal or no deal.

A Time Magazine article pointed out that many people who purchase daily deals are already customers of the company and probably would have paid full price. So, why are companies offering these deals? For the chance to attract new customers.

And it works. I've purchased deals from companies or organizations that I've intended to visit – train tickets for the Arcade and Attica Railroad and yoga lessons from Hand to Heart Yoga. Unfortunately, both deals expired before I had the opportunity (or motivation) to use them, so in the long run, I ended up losing money instead of saving.

My new strategy is to buy only from businesses where I'm a regular customer. If I don't fit them into my life now, I'm probably not going to later.

There's one exception to this rule: vacations.

If I'm planning to visit a city, I subscribe to its daily deal sites, just in case there's a discount on an attraction or restaurant that catches my eye. Last year, when I spent a weekend in Washington, DC, I saved $40 on tickets to the National Museum of Crime and Punishment, thanks to Seize the Deal.

So, while I think that daily deal sites still have value, I'm much more cautious in my approach to them.

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