Bringing the Group to coupons

Dear PropellerHeads: I just got an e-mail asking me to join Groupon to receive a daily e-mail coupon offer to save at least 1/2 off the regular price of goods or services. That sounds too good to be true. What do you think?

A: This PropellerHead got a similar e-mail from Groupon (www.groupon.com) and from LivingSocial (www.livingsocial.com) a while back. I too was skeptical, but I'm always looking for a deal, so I signed up to see for myself.

Both of these sites, as well as others that are popping up, offer amazing deals that are local to your area. After signing up for Groupon, I remember wondering when I would receive my first deal offer. It wasn't more than a week or two, and there it was waiting for me in my inbox. Each of the sites, as well as their copycats, is adding more cities and more vendors offering their wares constantly. Obviously, larger markets are added first. So those of you living in the "boonies" may have to wait a while.

So how can the businesses that participate in Groupon and LivingSocial afford to offer their stuff so cheaply? Simple economics ... by offering discounts they hope to increase their sales volume and client base. It is a way to build new business and obtain new customers.

The deal sites make money because they take a cut from each deal sold. They sell LOTS of deals in large cities all over the U.S. and in many other countries. Groupon boasts over 34 million Groupon deals have been sold. That adds up to some pretty significant cash.

Groupon and LivingSocial make it easy to join their programs. Vendors can sign up online. They will then be contacted to set up a program that will work for them. Some small businesses have suffered from their participation in the deal sites because their product or service sold so well they had trouble keeping up with the demand. Take a look at http://read.bi/hECNKCfor more on that. If a deal offering doesn't sell a pre-determined amount of deals, the deal just goes away and no money changes hands.

I must admit, I found a deal before the holidays that I felt was just too good to pass up. It was a one-night stay for two, with valet parking and continental breakfast, at the lovely Linden Row Inn in historic downtown Richmond for more that 50 percent off the regular price. Having stayed at Linden Row in the past, I realized what a great deal was being offered. I couldn't help myself; I bought two of the deals ... one for a gift, and one for me. Both have been redeemed, and there were no issues. I will definitely buy more deals from either site in the future.

For you folks in the boonies, all hope is not lost. Even if Groupon or LivingSocial is not available in your area, you can still find wonderful deals on the web. SlickDeals (slickdeals.net) and Woot! (woot.com) are great sites for daily bargains. My boss turned me on to SlickDeals eons ago; it's one of his favorites. These sites list bargains available to anyone with an Internet connection, so living in Podunk will not be a problem.

Another helpful hint when shopping online: enter the retailer name and coupon code in Google's search field. I've found coupons for almost every site I've shopped, ranging from free shipping to cash off to a percentage off from the total.

For more on Groupon and LivingSocial, take a look at http://buzzraid.com/how-does-groupon-work/.

Most of us like to save a buck or two. Hopefully this article will help you in that endeavor. Now, go get your deal on!

When the PropellerHeads at Data Directions aren't busy with their IT projects, they love to answer questions on business or consumer technology. E-mail them to questions@askthepropellerheads.com or contact us at Data Directions Inc., 8510 Bell Creek Road, Mechanicsville, VA 23116. Visit our website at www.askthepropellerheads.com.