Personal Finance, Saving Money, Shopping

The Dangers of Daily Deals

It seems like daily deals are everywhere these days. Amazon has it’s Gold Box, there are plenty of sites like that offer one-day deals on specific items, and the group coupon deal sites like Groupon are proliferating like mad. Even many “regular” retailers have daily specials on their websites. While it is possible to save money using these sites, it’s also possible to waste a lot of money.

I got into a bit of trouble with Amazon a year or so ago. After finding a great deal on something I really needed, I started checking the Gold Box every day to see what else I could find. That led to checking the video game and Kindle book deals of the day, too. Pretty soon, I was buying a lot of stuff at Amazon. While some of it was stuff I needed, much of it was stuff I could have done without. I was simply tempted by the deep discounts and, admittedly, the limited time of each offer made my blood rush a little bit.

Once I realized this, I stopped checking Amazon unless I was seriously looking for something I needed. My spending went way down as a result. There are many people who get into this kind of trouble. When you watch these sites, everything looks like a great deal. It’s hard not to get sucked in. It’s even worse when members of your online communities see one of those coupons that require a certain number of people to buy in for it to be sold and they beg everyone else to buy in so the deal will go through. You think, “Sure, I can use this and help someone out, too.”

A lot of these daily deals are never used. Many people never redeem the coupons they buy on sites like Groupon. They forget about them and they expire, or they decide it really isn’t something they want to do or can use. A whole secondary market now exists to help people unload the daily deals they bought and don’t want. For sites like Amazon, a lot of the daily deals end up in yard sales or on eBay once it’s delivered and people realize that it’s not so great or they have no place or use for it. It doesn’t take long for the, “What on earth was I thinking?” mindset to take over and for buyer’s remorse to set in. If you’re hanging out on these sites every day, get ready for a lot of remorse.

Before you get sucked into the next “great deal,” ask yourself three questions.

Is it really a great deal? Sometimes these deals aren’t really that great. Check other sites to compare prices before you jump on the deal. If you can check the price history of an item (Camel Camel Camel is great for checking Amazon’s history), check to see if it’s ever been lower (and thus likely to go lower again at some point). Make certain the item is exactly what you think you’re getting, too. Is it the latest version? Does it have all the features and accessories? Don’t get tripped up into buying old merchandise or stripped down products unless you are receiving a very deep discount.

Also watch out for deals that advertise a discount of, for example, sixty percent. You need to know if that discount is off the full retail price, or the price that the item usually sells for. Many times a product carries a suggested retail price, but the site usually sells it for less than that. So if they’re advertising 60% off retail, that may only be 20% off the price that it usually sells for on the site. It’s still a discount, but not the huge discount you thought you were getting. Know your prices and realize when a deal is a deal and when it’s just marketing hype.

Would you have bought it anyway? If you’re really in the market for a spa treatment, a 50% off deal can be a great thing. But if you weren’t thinking of going to the spa until you saw the deal, you’re probably wasting money. If the deal is something you were in the market for anyway, you can save some money. However, if it’s something you’re buying just because it’s discounted or looks fun, pull back and think about it. Chances are you’ll realize you don’t need or want it and be glad you saved the money. If, six months down the road, you find you’re regretting not buying that deal on sky diving lessons, it will probably come around again or you can work at finding another deal. Chances are, though, that you will have long forgotten about it.

Are you simply feeling the rush? These sites are genius, in a sick kind of way. They know that people love the lure of limited times and quantities. They know that people like to feel like they’re in on something that other people missed out on. They capitalize on all of this, using slick language, ticking clocks, fulfillment meters, and quantity left countdowns to get you all amped up to buy into this deal. When you’re about to buy something, stop, breathe, and ask yourself if this is really something you want or need, or are you just feeling the rush? If it’s the later, walk away.

As with anything, make sure you read all the fine print and terms and conditions. Know exactly how long you have to redeem any coupons and make sure you can use them within that timeframe. Make sure you understand exactly what you’re getting. If it’s a service, know what’s included and what’s not. Will you have to tip at the spa, for example? That can add on to your bill. If it’s a product, know what features are included. Print out any pages that you might need to resolve discrepancies or arguments that arise if you don’t get what you were promised.

Daily deals can save you some money, but you can also waste a lot if you’re not careful. Be smart when buying daily deals and don’t let the rush (or other people) talk you into things you don’t need and can’t use.

2 thoughts on “The Dangers of Daily Deals

  1. Another thing to consider is if the business will be in business for the length of the coupon. A vegan restaurant opened in my city and I thought I would support the local business by buying $50.00 in bogo coupons. They went out of business due to financial mismanagement before the coupon expired. Lesson learned here. No more local coupons for me.

  2. We run a small local business and we have used Groupon to promote our products. Thrifygal is right that you should at least be aware of how long the company has been around. We’ve been in business for over 4 years now so our customers felt safe buying the coupons. ALSO, we honour the groupon even AFTER it expires as a matter of Customer Service. There are businesses that really do care. Let see a big chain accept an offer 6 weeks or 12 weeks after it expires!

    One final thing, the cost for running the Groupon was very expensive for us. We sold at a LOSS for the chance to advertise and the deal was fantastic for the client (3 hours of Drop-Off Art Time for $12) and we only get a portion of the $12.

    So let’s not paint all businesses with a bad brush. The Groupon offered the chance for us to advertise to 30,000+ people in our community.

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