How do online coupons websites work?
Generally, an online coupon website will offer a new deal every day, for one or two days only. The companies operating the sites use the power of group- or bulk-buying to negotiate big discounts with retailers, and receive a commission for the number of coupons sold online. When a new offer is published online, it will only be made available after a minimum number of subscribers sign up to buy – if they don’t, the deal does not happen.
The deal ends when the coupons are sold out or the time limit expires. After you’ve paid for the coupons, they’re emailed to you so you can print them out and redeem at the retailers’. You can sign up to receive daily offers in your email inbox, Facebook and/or Twitter accounts. CHOICE member Naomi Nixon believes she’s saved about $400 in beauty and spa services since she first jumped onto these sites. Another member, Jo Randell, says she’s bought a few discount coupons and has had “positive experiences with all of them so far. In fact, I’ve discovered a new great hairdresser.” Some sites also offer more than one deal a day (see CHOICE Recommended Sites), and allow you to suggest deals from particular retailers.
The power of social media
Online coupon website operators rely heavily on social media networks such as Facebook and Twitter to drive sales. The size of their subscriber database – the bigger the better – helps the website operators negotiate discounts with various retailers who may otherwise spend on media advertising. Some websites also give credits to shoppers to encourage them to spread the word to their friends and encourage purchases. “Consumers get the chance to try something new at big discounts,” says general manager of Scoopon, Jon Beros. “Retailers provide the discounts as they benefit – in a very short time – from pre-paid sales, exposure to their products and services and the chance to build repeat business. It’s a win-win situation.”
Can you be sure the bargains are genuine?
MySkin Laser Clinic in Melbourne offered a deal through Scoopon, where $79 bought a voucher for laser hair removal deals to the value of $500 – an 84% discount. More than a thousand people bought the vouchers, locking in three months’ worth of business for the clinic. “We publish a list of the usual prices for the different types of treatment, so that voucher-buyers are clear about the value they are getting,” the clinic’s director, Chris Ohanian, told CHOICE. “Given a lot of the coupons are for services rather than products, it’s not really possible to know whether their claim of original value is correct – but that’s fine by me so long as I’m happy with the price I’m paying,” says CHOICE member, Marta Pearce.
Too good to be true?
Online coupon websites certainly offer great bargains – but as always, there are some hitches to watch out for. “Consumers should be mindful that the discount might be an exaggeration, as well as the terms and conditions attached,” says Christopher Zinn, CHOICE Director of Communications and Campaigns. CHOICE member Jon Park, who purchased six coupons for go-karting, was miffed when he could not use the vouchers on the day he wanted. “I was told by the go-kart operator that voucher-holders weren’t given priority over full-paying customers. This wasn’t stated as part of the terms and conditions of purchase. I believe this is very unfair and unjust.”
Another member, Dave Gardner, warns: “I purchased a voucher from Spreets for two dozen cupcakes from Kustom Cupcakes with a special occasion in mind. The voucher’s terms and conditions stated that I needed to pre-order the cupcakes with 24 hours’ notice, which I did. But Kustom Cupcakes then came back and said they were fully booked this weekend and couldn’t accept my order. I explained that the cupcakes weren’t useful to me any other time, but to no avail.”
When contacted for comment, Spreets’ chief executive officer, Dean McEnvoy, told CHOICE: “We will facilitate a refund directly from the business to the consumer and if they aren’t co-operative we will refund the consumer first and chase the business for the money. Most of the time it’s a misunderstanding or the business is a little inundated in the first days after a deal sells.” Another drawback of online coupon websites is that while the majority list all the major Australian cities, most of their offers are concentrated in Sydney and Melbourne. Sales people at the business for which you buy a coupon may also be pushy in upselling other products and packages to you.