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How to Make the Most of Daily Deal Websites

by Shawanda Greene

How to NOT Lose Money on Daily DealsI was, literally, mesmerized by the women featured on TLC’s Extreme Couponing. Folks like me are mere mortals in their eyes. How in the world do you buy $2,000 worth of groceries for 100 bucks?

Although most of us don’t have the organization skills, shamelessness, or patience of gods, we can still do pretty good for ourselves through the effective use of daily deal websites.

Lately, daily deal sites are popping up everywhere. But the big players in the market are Living Social and Groupon. (Yipit is a daily deal aggregrator I’ve taken a liking to.)

When you live in a high cost of living area, you can really stretch your budget. For New York deals and Groupon London deals why not see what’s on offer today. Saving money is the easy part.

In my opinion, these companies provide nothing more than a simple, attractive medium for purchasing what are, essentially, high value coupons.

Like coupons you find in your Sunday paper, they have specific terms of use and limitations. Oh yeah, and they expire. Which means your risk of losing money is as good as your chance of saving it.

Unlike traditional coupons, these puppies can cost you some serious cash. Well, the most I’ve ever paid for a daily deal voucher was $50. Normally, I spend $20 – $25. But, hey, if you’re recklessly spending money on coupons you’ll never use, let’s work on not doing that.

Here are a few pointers on how to maximize their value without losing money.

Use immediately. Remember that expiration date I told you about? Yeah, that’ll be here before you know it. Unlike money, daily deals are not to be preserved and admired over great lengths of time. They’re to be used as soon as it’s feasible to do so. I find many vendors who sell their products or services through deal-a-day websites recommend reservations. Although it’s often unnecessary for restaurants, there’s a strong probability you won’t be able to reserve a spot in that Bikram Yoga class if you wait until the last minute.

One of the companies my friend purchased a daily deal from went out of business. Granted, he immediately received a refund, but that’s not necessarily a good thing. Fortunately, I had the good sense to redeem my coupon quickly. It’s not every day you get 4 adult movie tickets for $20.

Read the fine print carefully. You have an entire day – maybe even longer – to make a decision. There’s no need to be hasty. It takes less than a minute to read potentially deal breaking terms.

For example, there’s a pretty cool dive within walking distance of my office. Their chicken fingers are deeeelish. (Ya’ll know how I like to eat.) I was super excited to find they were offering a $40 voucher for $20 until I learned you couldn’t use it on alcohol. This little factoid shouldn’t automatically sink a deal, but when a restaurant’s price points are in the $8 to $9 range, you’re gonna have a hard time working your way up to $40 worth of food. I like to eat, but not that much.

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Make sure it’s easy to use. How long will it take you to travel to the establishment? Do you need to round up a group of people in order for the deal to work? What times are you available to use your voucher? The more barriers exist, the more likely you are to lose money.

Look for hidden costs. The price you pay for a deal consists of more than the money you pay for it. Is parking near the location free and readily available? Or will you be ticketed into oblivion by D.C. parking enforcement? Is shipping free for internet vendors? Consider the additional costs before you buy.

Not necessarily hidden but frequently forgotten are tax and tip. You’ll almost always pay sales tax on the pre-discounted price of your purchase. Also, it’s customary to tip on the full value of services received.

Below is a calculation of the true savings rate on a $50 for $25 voucher for a Washington, D.C. restaurant. Notice it’s not even close to the often advertised savings of 50%.

Deal a Day Savings CalculationDon’t try anything new. With restaurants, stick to the ones you know and the cuisines you like. You can be more adventurous at regular price and without all the limitations.

The same goes for activities. Skip the ones you’ve never tried.

Warning: After you’ve heeded my advice, whenever the thought pops in your head to try that new activity, you’ll say to yourself, “Shoot! I shoulda bought that voucher.” Yep. You’da bought it and lost money on it because, in reality, you’d only think about using your voucher for a second and then proceed to do something else.

Review the menu or price list before you buy and review it again before you use your coupon. You need to know how much you can buy in order to fully utilize your voucher. As indicated previously, it’s important to do this because there are occasions when you won’t be able to buy enough and others when you have to buy too much. You must plan in order to not exceed the value of your voucher by an untenable amount.

If you find yourself in a position where your total order is $48, you don’t need anything else, and the only thing you want will exceed your $50 voucher, just ask the establishment to charge you the full $50.

Request a refund. Even though daily deal companies have specific guidelines under which they’ll issue refunds, it’s good to know they will under certain circumstances. Don’t hesitate to report vendors who aren’t transparent to the daily deal company you purchase their coupon from. Some will try to pile on additional limitations and foolishness when you go to exercise your voucher. That’s some bull. Such establishments deserve to be tarred, feathered, burned in effigy, and reported for their transgressions. And you deserve a refund if you can’t get the savings you expected because of their unscrupulous behavior.

Ensure gratuity isn’t already included in your bill. Since some establishments refuse to adequately compensate their employees, they want to make sure you do it for them. Which is why you’ll sometimes find a generous tip added to your bill even if your party consists of 1 or 2 people. Ask for an itemized bill if you’re not initially provided one. Bars are notorious for giving patrons one line item bills. You can’t tell what you’re paying for. Especially if you’re under the influence and incapable of performing simple arithmetic.

Sell on the open market. Let’s say you somehow manage to ignore everything I just said and find yourself in possession of a deal you’re not going to use. Even you deserve a second chance. That’s where LifestaDealsGoRound, CoupRecoup, and Craigslist come in. Use these websites to sell your voucher to avoid a total loss.

Although there are a lot opportunities to lose money on daily deals, when used effectively, they’re a great way to save on the stuff you know, want, and enjoy.

What advice do you have on how to get the most out of daily deals?

Have you ever lost money on a deal? Why?

 

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{ 7 comments… read them below or add one }

Romeo April 19, 2011 at 8:33 PM

Whoa,

This post is intense. I'm not much of a "couponer", and I don't care to be one. I just don't have the time or the desire to make purchases, ever. However, many of my friends swear by these type of sites. In fact, a friend was telling me how she received 70% off of a bikini wax by using Groupon.

Keep up the great posts,
Romeo

Reply

Financ. Independence April 30, 2011 at 11:34 AM

I am totally agree with the coupons theme. But than we can always make a step further – what is the actual value of food?

In my opinion, life is a collection of different experiences. Hence people go to different restaurants to get them. If you want to save money – stay at home, cook yourself.

A bit complicated, but here you go. Great post, many thanks.

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Nini Ben. August 25, 2011 at 2:12 AM

Great post! Love me some great deals!

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sophie September 1, 2011 at 1:59 PM

If you're really trying to live frugally you wouldn't buy into those coupons from groupon or living social. Most of the time they are trying to get you to pay for stuff you just don't need.

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Steph Christensen January 28, 2012 at 6:30 AM

Great tips, I would also caution people in buying "service" oriented daily deals. They can be a great way to get a rock bottom rate, but when it comes to fitness classes or any kind of instruction-based offer, keep in mind that the place will be SWARMED with couponers. (I know this from experience as a I teach at a fitness facility that offered one). The vendor will honor your deal–but you should be prepared to be packed in like sardines, and/or not get the hands on attention the instructor could provide if the group were smaller (and with full paying customers). Not because they don't want to–but the influx of newbies can make it impossible to give everyone top notch service.

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Shawanda January 31, 2012 at 6:52 AM

Thanks for the heads up! I've never bought a daily deal voucher for a service. Does paintball count? Either way, I didn't use that one.

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Bethy @ Credit Karma September 10, 2012 at 1:28 PM

Great tip for selling on Lifesta! That’s what I did for one of my unused vouchers–and it sold quickly! I was glad I could help someone else get a deal which recouping my losses.

Great to (briefly) meet you Friday night at FinCon12! Hope to see you there next year!

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