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Of all local deal websites, Groupon remains the most popular 5 Ways To Make Use Of Groupon 5 Ways To Make Use Of Groupon Read More , but is it always safe to buy Groupon deals, and will you always save money by doing so?

There’s no doubt that many people have saved an impressive amount of money by using Groupon. You can save 50% or more on really fun activities in your local area, like basketball games, theater tickets, 5K race entries, restaurant discounts and more.

However, there are also some real dangers involved in using Groupon if you aren’t experienced with service, and aren’t aware of the red flags that might signal problems.

How to Spot Potential Fraud

In early 2015, I used Groupon to purchase an entry to an upcoming 5k race 5K Runner: An iOS Application that Motivates You to Exercise (20 Free Licences) 5K Runner: An iOS Application that Motivates You to Exercise (20 Free Licences) Read More for my wife. The deal looked just as legit as any other on Groupon, or at least I thought so when I clicked the button to purchase it.

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There were a few red flags that I should have noticed before purchasing, but being fairly new to Groupon, I didn’t know many better.

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About a week later, we started wondering how my wife would get her run packet prior to the race (t-shirt, run number, color powder, etc…). To find out, I visited the website. The first thing I noticed was that the site looked like it had been slapped together by a first grader in elementary school.

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Like I said, there were several red flags. The first was that the website mentioned the event was already mostly sold out. Did that mean if we didn’t get our packet before the race that there wouldn’t be any slots left even if we had purchased a Groupon?

The next thing I noticed was that the date of the event on the website was listed as May 31st, while the date of the event listed on Groupon was May 30th. That was a bit disturbing. What would happen when all of those Groupon runners showed up on the wrong day? Looking for answers, I clicked on the “Contact” link in the menu.

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There was a toll-free number available. Great!  I called it, and heard a digital voice informing me that the number was no longer in service. Not good.

So I filled in the form with my question and submitted it. After three days, still not hearing back from what was slowly appearing to be a fraudulent race promoter 3 Online Fraud Prevention Tips You Need To Know In 2014 3 Online Fraud Prevention Tips You Need To Know In 2014 Read More , I contacted Groupon. In less than I day, I received a reply.

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After informing Groupon that I had tried to contact the business, only to learn the phone number was no in service, and the form submission went unanswered. Thankfully, in just a few more days, Groupon was very quick to respond and issue an immediate refund.

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The refund was appreciated, but the experience was still disturbing. Up to this point, I’d never come across a fake listing 5 eBay Scams To Be Aware Of 5 eBay Scams To Be Aware Of Being scammed sucks, especially on eBay. You invest all of that time into selling a particular product or you spend a lot of time researching the perfect item, complete the transaction, and then… nothing. The... Read More on Groupon, or anything else even remotely questionable.

Reviewing the experience, there were a few important “red flags” that could help anyone to identify similar scams in the future:

  • Number of buyers. If there are only 1 or 2 buyers on a type of Groupon that is normally quite popular (like 5k races), that’s a bad sign.
  • Amateur website. Always, and I mean always, visit the website of the business before buying a Groupon. Make sure it’s a legit website. And if the site looks like it was thrown together in 5 minutes, don’t take the risk.
  • Little contact info.  If there’s no easy way to contact the business beyond a simple web form, you could be taking a chance buying that Groupon.
  • The fine print. Every Groupon has a “fine print” section. Read it carefully. Even if the business is legit, sometimes this section can reveal things about the deal that the title or description left out. Read carefully before buying!

The good news is that fraudulent listings on Groupon are very rare, and when the site learns about them, they are quick to shut them down. However, it does reveal a lot about Groupon’s dire quest to sign up more businesses How Much Money Does Groupon Make and Will It Last? How Much Money Does Groupon Make and Will It Last? Sometimes Groupon deals are so steep that it seems like an unbelievable bargain. So, what exactly is the true story and can we count on the service being available well into the future? Read More that these few are getting through the sign-up process somehow.

When a Deal is Not a Deal

Beyond the few fraudulent listings, a much more prevalent problem on Groupon are deals from businesses that are structured in a way so that the deal isn’t really as good as the title makes it out to be.

Restaurants Like to Split Groupons

One of these techniques businesses use is splitting a deal into several actual Groupons.

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The way this protects the business is that it limits your ability to actually get the full 40% discount advertised in the Groupon by only allowing you to spend $10 of the $30 Groupon at a time, on any given day.

This means if you take your family to the restaurant and spend $40, you can only use a $10 Groupon. Essentially this means you’re really only getting the 40% discount off 25% of your purchase. To make matters worse, you have to go back and make two more purchases to use your remaining Groupons!

The only way to make the best of a deal like this is to only purchase $10 worth of food at any given time.

The Hotel Room Bait-and-Switch

Another trick that businesses use is something I call the hotel bait-and-switch.

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This is where a hotel advertises very steep discounts off their rooms on the main Groupon ad, but when you finally click and review the deal details, you’ll discover that the discount really only applies if you’re traveling alone or at least without kids, and only need one bed.

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You’ll still be able to book a room with extra beds, but that cost will dramatically increase when you do.

And guess what, the Groupon deal often only applies to the days of the week when most people aren’t traveling – non-weekends. Sure, you can schedule the room for the weekend and book it through Groupon, but say goodbye to those cheap prices that were advertised on the main Groupon listing!

Home Services are Limited

One area of Groupon where you really need to carefully read the fine print is in the Home Services section. Here is where you’ll find local carpenters, pest control companies and home cleaning services trying to bring in new customers by providng discounts.

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Unfortunately, these are some of the most tightly controlled discounts with many, many little details buried in the fine print.

You can’t really blame these companies. The last thing they want to do is give away their services for free, but this also means Groupon isn’t really the place for this kind of thing. Why offer 53% off window cleaning service, and then list a whole litany of stipulations that make the deal pretty much useless?

So be careful here if you do purchase a Groupon for a home service. Just read the “fine print” details with a very fine-tooth comb.

Skip the Products

The final area of Groupon that you want to be wary of are the products Groupon Shifts Focus From Daily Deals To Marketplace With A New Website Groupon Shifts Focus From Daily Deals To Marketplace With A New Website Groupon has been serving up deals since 2008, and in that time it has never done a complete redesign of its website. That's all changed now, as the company has given it a full overhaul. Read More  (the marketplace). These are things like electronics, toys, home & garden and more – the sorts of things that you might search for on Amazon or Google Shopping Does Google Offers Stand a Chance Against Groupon? Does Google Offers Stand a Chance Against Groupon? A little while after Groupon first got started, I signed up and followed the daily deals for my area religiously. I waited patiently for the perfect deal to roll in, and in a few cases... Read More .

The deals at Groupon are anything but. It doesn’t take long to make a few comparisons between Groupon and Amazon to see that the best bargains to be found are anywhere but Groupon for products.

For example, on Groupon you might find a Apple EarPods with Remote and Mic for $12.99.

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You can get the same thing on Amazon for $8.89, with free shipping.

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On Groupon, you can get an 8-pack of LED solar garden lights 7 Creative Uses for Colored LED Home Automation Lighting 7 Creative Uses for Colored LED Home Automation Lighting Turning on your lights automatically is certainly cool, but it doesn't take advantage of the full spectrum of colors available with RGB lighting. For that, we need to get creative. Read More for $29.99.

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Sounds like a great deal considering they retail for $118.26, right? Not if you check out Amazon, where you can get the same set of lights for $25.99 with free shipping.

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This doesn’t mean you can’t find any deals at all on Groupon. At the time of my review, I found a Night Owl Multi-Channel DVR Security System bundle for $199.99. Great deal.

I also found a Vaas HD Car Dash Camera for $24.99 on Groupon. Another great deal.  So, while you can certainly get some decent deals on products on Groupon, you have to be very careful and make sure you check out other online retailers before purchasing that Groupon.

Use Groupon With Care

The bottom line here is that Groupon really is one of the best resources to get amazing deals. The catch is that not every “deal” is amazing.

As outlined here, there is always the possibility that the business isn’t being completely forthright, so do your due diligence before buying! There’s also the possibility that you could get a better deal elsewhere, so shop around. But if you do spot a killer deal on Groupon and the business looks legit, by all means, jump on it!

Do you Groupon? Have you ever had any problems or bad experiences? Share your own stories and thoughts in the comments section below.

Image Credits: looking skeptic via Shutterstock

  1. Mary Wyatt
    November 17, 2016 at 8:25 pm

    I purchased a handbag which was reduced from £110 to £29. No way was it worth the top price. Will not use again

  2. Phoebe
    October 13, 2016 at 3:05 pm

    I do appreciate this article. I do have one issue with it. Groupon IS NOT quick to shut down fraudulent offers. I informed them a month ago of a hair color offer, the "stylist" no longer does hair at all and my salon gets calls every week from people who have purchased the deal. I made Groupon aware of the situation and they responded with "sorry for the inconvenience but we can't do anything". Now I'm in the process of filing a complaint with the BBB to have the deal removed.

  3. Robert Hixon
    September 5, 2016 at 6:37 am

    Max D the 5D video experience is closed. Nobody there but they are selling on Group On EXCLUSIVELY. Mall security is baffled. It will take charging the Boulevard Mall as coconspirators in fraud.
    Challenge your credit card charges.

  4. Robert Hixon
    September 5, 2016 at 6:34 am

    Max D5d in Las Vegas. At the Boulevard Mall is closed. Still selling on Groupon. Security is baffled on what to do.
    My only advice is to dispute credit card charge.
    This is FRAUD. No product delivered. No intent to deliver.

  5. Travelgang10
    August 24, 2016 at 9:21 pm

    I have purchased 3 electronic items. 2 were activity trackers and the 3rd item is a smartwatch. The only warranty they came with was the 14 day return policy groupon offers.
    The activity trackers stopped working just after 2 months.
    For the smart watch, the groupon ad said it supports iOS & android. However, when I opened the packaging after returning from holidays the 1st thing the instructions says is that iOS is not supported at this time.
    So the watch is unreturnable and un-used.
    I highly recommend not buying any products without a better warranty.

  6. Ijustlikeadeal
    December 4, 2015 at 7:16 am

    I've have some good and some bad experiences with groupon.
    The bad hasn't outweighed the good for me because I still use the site.
    I have purchased a few goods that weren't that "good". I purchased some tights that literally fell apart when I put them on. The seams kind of disintegrated and the elastic fell out. I also ordered a dkny coat which is normally a nice brand. The cut was terrible and the fabric was cheap. It seemed to be a knock off to me.
    I am terrible at returning things by mail and didn't follow up with groupon to see if they would refund.
    I also bought a dr. Cell phone voucher to fix my iPad screen. When the guy rang me up at the store he forgot I was using a groupon and gave me the total it would normally cost. Turned out to be the exact amount I paid for my groupon. Guess I wasn't getting the percentage off the groupon claimed to be giving me.
    I chalked this up to dr. Cell phone being dishonest when giving groupon the info for the deal and decided not to use them in the future.
    When buying his type of deal I now call the business before purchasing to verify the cost of their service.

  7. Bogdan Andrievici
    June 23, 2015 at 11:51 pm

    I only had a couple of so-and-so experiences before the big negative one. That time I bought a restaurant voucher for an outing with my wife. Few days after, my father fell ill, was in hospital for two months and finaly died. I did visit him daily and of course the restaurant voucher had no place in my mind.
    After things settled a bit I finaly paid attention to my voucher which had expired a few days before. Groupon customer service were not sympathetic ( to say the least ) and they went by the book letting me have the full financial loss on top of the human one. No soothing formula for the latter either.
    So I'd rather pay something a lot more then give my business to them. Period.

  8. Damian DeLeon
    June 23, 2015 at 4:22 am

    I have been lucky enough to say that the items I have purchased on groupon was because it was the cheapest possible price for the item that I wanted. When I see a groupon that interests me, I first look at amazon or any other site where I regularly buy from, and I check to see if they have it at a better price. If they don't have it cheaper then I get the groupon.

    • fcd76218
      June 23, 2015 at 1:06 pm

      In other words, you do your research and not buy blindly just because Groupon is supposed to be the cheapest.

  9. gp_17
    June 23, 2015 at 4:01 am

    Snapdeal is busy in doing it other way...

    This is snapdeal's web page which proves that snapdeal is doing fraud.

    Item show in picture is 26 inches long, item supplied is 20 inches long. You can confirm the size of the item from the link of the dealers given on the webpage:

    http://www.snapdeal.com/product/stop-shoppers-self-defense-security/2026244596

    My order number was 4820148267. After returning the item two times because of incorrect item, Snapdeal has refunded my amount expressing inability to provide correct size item. But snapdeal has not stopped selling incorrect size item. Hence it is a continuing scam.

  10. fcd76218
    June 22, 2015 at 6:21 pm

    Why pick on Groupon? This crap has been going on for decades, if not longer, with paper coupons, ads in newspapers, fliers we get at home, TV ads, etc. That is why false/deceptive advertising laws were enacted. HSN and QVC present themselves as discount merchandisers but they really are not. The stuff they hawk at what looks like big discounts can be purchased in brick & mortar stores for less. Even the prices at everybody's mecca of low prices, Amazon, can be beaten with some research.

    As Sy Syms of Syms Discount Clothing Stores used to say, "you have to be an educated consumer". Unfortunately for him, if one was an "educated consumer" one did not shop at Syms because one could find better prices at department stores like Macy's, Target, Sears or JC Penney.

    • Yodi Collins
      June 22, 2015 at 7:46 pm

      I'm with you, fcd76218. Don't pick on the messenger. If you've used the Internet for any length of time, and have used it to shop for something even once, then the onus is squarely on you, the consumer, to know how to protect yourself. The Internet is crawling with entities eager to separate a fool from his money.

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