Coupons and discount vouchers have been around for as long as shipping and modern retail stores have. Just because people shifted towards online shopping doesn’t mean they’ll stop looking for the next best deal to save money.

One service that promises money-saving coupons and discount vouchers is Groupon. But is Groupon legit? Does it actually help you save money on your online purchases, or is it just a waste of time with the illusion of saving money?

How Does Groupon Work?

Groupon is categorized as an e-commerce website. But instead of directly selling products to consumers, it sells users coupons that give them access to discounts, limited offers, and buy-on-get-one deals for various e-commerce websites and in-person services.

In the buying process, Groupon is the middleman or broker. Before selling you a coupon, Groupon first makes a deal with the e-commerce website or brand selling the product or service.

So far, Groupon may sound too good to be true. How are they making money when there’s less money being paid to begin with?

For every purchase made using one of Groupon’s special discount codes or offers, they receive a percentage of the purchase as a commission. After all, they played a role in marketing the brand and help it sell a product or service.

In most cases, Groupon takes anywhere from 50 percent to 90 percent (on rare occasions) of sale revenue generated from buyers using their coupons.

The commission Groupon takes isn’t immediate or static. A part of the agreement with their vendors includes a minimum number of sales or revenue generated before Groupon can step in and take their cut.

That means Groupon has a quota to meet. If they don’t generate enough buyers through their website, then they won’t get paid for all the promotion work they did for the vendor.

What About Groupon’s Cashback?

In addition to old-school coupons, Groupon also offers cashback deals through its Groupon+ program. You first need to have an eligible credit or debit card linked to your Groupon account. After that, it’s as simple as browsing Groupon’s list of cashback deals and claiming the one you like.

At first, it appears that you paid full price for the product or service. But you’ll get cashback on your credit or debit card statement. This model lets you save money shopping without the hassle or risk of buying coupons and redeeming them in-store or online.

Groupon makes money with cashback more or less the same way they do with coupons; by making deals with the vendors. But unlike traditional cashback deals offered by cards and banks that are often between one to five percent, Groupon’s cashback deals range from 15 to 30 percent, so they’re just like regular discounts.

Is Groupon Legit?

If by legit you mean you won’t get cheated out of your money or time as a buyer or seller, then, yes, Groupon is a legit company. They’ve been around since 2008 and have branched out to provide their services to over 15 countries worldwide.

As a company, Groupon has been growing at a steady rate for the past decade. And so far, they’ve had little to no complaints from users and business partners regarding shady business practices, scams, or unethical practices.

Groupon’s Expiration Dates Explained

Since Groupon’s agreements with vendors and service providers have a deadline, so should the coupons they provide. Naturally, you can’t expect to redeem a coupon you got over a year ago.

To encourage people to actually use their coupons, Groupon sets two expiration dates for every discount code available for purchase through their website.

The first deadline is for how long the deal is live on Groupon’s website. This usually lasts for a couple of days, and most deals on Groupon have a countdown to highlight how long the deal is available for purchase before it’s gone.

The second deadline activates once you purchase the coupon. This usually lasts anywhere from a few days to six months, depending on the vendor and the longevity of the offer—you can’t expect to redeem a summer-special package months after when it’s winter.

If you don’t redeem your code before the second expiration date, the code turns into a useless text or barcode, an expired code. Of course, by then, it’s unlikely that Groupon or the seller would accept the coupon and give you the discount you purchased, so you better act fast and not leave your Groupon coupons forgotten in a cluttered drawer.

Who Is Groupon Made For?

When Groupon first started in 2008, they mainly tried to reach users through their website and newsletter. That made their main demographics adults and young adults who regularly used the internet and checked their email inbox back then.

Now, Groupon is attracting people from all over the world from different age groups. But it’s worth noting that, according to a recent survey, the majority of Groupon’s users are women, although men still make a decent portion of coupon purchases.

Also, Groupon’s business model has evolved side by side with FinTech and online banking. The majority of Groupon users reported using online banking and digital money, which is to be expected. In addition, it’s easier to purchase coupons from Groupon on the go when you have your wallet connected to your smartphone or computer.

It’s not just local businesses. Groupon is gaining popularity among online product shoppers. The majority of regular and incidental Groupon users reported that they liked using it when shopping at Amazon, Target, and Walmart.

Is Groupon Worth It?

If you shop online a lot or like to try the products and services of local businesses, Groupon can lessen the effects that has on your wallet. Groupon is the perfect place to trade a couple of minutes of your time for a 50 percent discount.

Still not sure? Give it a shot with smaller purchases and only splurge on products and services you already know you’ll like.