How to Avoid a Bad Group Deal

Eating healthy can be expensive — especially when you’re allergic to most unhealthy foods and are forced to shop in the vegetarian, dairy-free, and gluten-free aisles of specialty food stores. As a result, a recent Living Social deal piqued my interest, offering $50 of gluten-free food for just $25 from a gluten-free website. Sounds great, right? Gluten-free food is already ridiculously expensive, but those with allergies to gluten have no other choice except to shop for products that don’t contain gluten (which comes with most varieties of wheat). This means a loaf of bread can easily cost three or four times what you normally pay at the grocery store. $25 worth of gluten-free food could make a huge dent in my monthly grocery tab.

Unfortunately, I failed to check out the fine print or visit the retailer to scope out the prices first. Not only were they even higher than what I normally pay (by about a dollar per item), but I had to pay for shipping. The result meant I didn’t really save anything on my gluten-free products, and may have even been better off going to the store up the street for my favorite quinoa pasta or breakfast bars. Luckily, Living Social has a five-day refund policy, which required me to actually call its 1-800 number (no social media here, folks) and ask for a refund. After no questions asked (except for my personal information required to identify the account), I was assured my checking account would see a refund of my $25 in 3-5 days.

Unfortunately, not all group deal sites offer refund policies, and those spur-of-the-moment purchases you make on other sites are yours to keep — for better or worse. I spoke with Hanna Brooks Olsen, former copy editor for Tippr, who gave a few glimpses of what goes into creating a group deal and how you can use this knowledge to avoid purchasing a bad group deal in the future.

Know the Brand

How to Avoid a Bad Group DealThe hardest lesson learned by many who feel group deal remorse is that they don’t know the brand offering the group deal. While the deal may sound good, customers (like me) haven’t actually heard of the brand and don’t know their prices or locations, which may not be in the customer’s best interests. If you see an interesting deal from a merchant that you’re unfamiliar with, take five minutes to visit its website and research its prices and locations. However, even knowing the brand doesn’t always help as Chris Pirillo explained when I initially ranted about my experience with my Living Social deal. One deal for a restaurant he frequents in Seattle included fine print that required users of the deal to order from a different, much pricer menu. Just like my gluten-free Living Social deal, Chris said these special circumstances for his deal “mitigated [his] value to the point where [he] didn’t really save anything.”

Read the Fine Print

Could Chris have saved some money by reading the fine print on that particular deal? Hanna says this is the most critical step in avoiding a bad group deal in the first place. She says that “the fine print is there for a reason. For example, the ‘limit one per customer, not available during happy hour, must be used within 30 days, etc.’ are all provisions that many people don’t notice. So while you may buy a deal thinking you can use the deal whenever you want, there may be additional stipulations that make it a lot less convenient, which means you may never use the deal.” You may also not save much money based on the fine print, or may incur extra charges — such as shipping — causing you to actually lose money.

Avoid Third-Party Brands

One of the most famous group deal scams involved a deal that was posted via most major sites, including Groupon and Living Social, selling movie tickets. However, these movie tickets were actually being sold by a third-party, and Hanna said it became clear that the deal was “sketchy” quickly into the day of the deal — though it should have been checked for quality assurance well before the deal went live by each group deal site. When that third-party site went out of business before customers could use their deals, the group deal sites had to refund money, causing a loss of both profits and customers. Hanna warns that while many group deal merchants are now notably being more cautious of the deals they post, consumers should be wary of any similar deals and to never purchase deals from third-parties.

Know the Refund Policy

If you did purchase a bad group deal, it may be possible to get your money back if your guilt, remorse, or clarity sets in quickly enough. Living Social has a no questions asked refund policy if you call its customer care team at 877-521-4191 within five days of purchase. Groupon also allows you to cancel your group deal purchase, but only up until midnight of the day you purchased your Groupon. (Groupon also has a policy that ensures you can get your money back if the business for which you bought the Groupon closes, or if there is any other reason you absolutely cannot use your Groupon.) If all else fails and you cannot get your money back directly from the group deal site, you may want to consider selling the deal to a friend or to a group deal reseller site like CoupRecoup or DealsGoRound. Unfortunately, our favorite go-to site for reselling our unnecessary group deals, Lifesta, went out of business in early 2011.

Bottom Line

If you know the merchant and have read the fine print, yet still aren’t sure the group deal is for you, there’s not much to be lost by not buying a group deal. The most you’ll usually save on a purchase is $25, and you’ll likely need to spend a certain amount to even use the deal — which likely may be more than you intend to spend in the first place. Hanna also advises group deal buyers to consider whether they actually need the brand or product. She warns that “you should only buy something if you plan to use it pretty soon. If you’re not going to use it in a month, don’t bother. Otherwise, it’s just an impulse buy that’s going to sit in your inbox” and waste your money.

Have you ever purchased a bad group deal? What warning signs do you now heed to avoid purchasing these types of deals in the future? Share your thoughts and experiences in the comments.

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  • Ken Meyer

    Note that if the time limit runs out on you, the deal is “usually” still worth “face value”, although you don’t get the discount.