*NEWS* Study Shows that Groupon and Living Social Deals Feature Inflated Discounts

October 15, 2011

I am not sure if you noticed or not but we here at Budget Savvy Diva do not promote Daily Deals very often because we think they are not the best deal a lot of times – and it looks like we were right ;)

Daily deals offered by Groupon and Living Social seem like a regular feast of too-good-to-be-true discounts.

Thumbtack – who did the study-  ran a price check on several local service deals, to find out from the merchants themselves how much the service would cost a customer without the group-buying discount. It turns out, a majority of the actual values for these offers were much lower than the “retail” prices advertised by Groupon and Living Social.  Surprise- Surprise. But are you really surprised? I think the discounts for restaurants are pretty much on par but services that are packaged deals are the deals were there is HUGE inflation

The Study

In September 2011, Thumbtack investigated a $49 home cleaning service deal advertised on Groupon — a bargain at more than half-off the stated retail value of $150. However, after calling the merchant, Thumbtack researchers discovered that the real value of the 2-hour home cleaning was just $80 — a full 47% less than Groupon’s listed retail price.

Does this effect whether you will buy from Groupon or Living Social? Does the news of potentially inflated discounts bother or surprise you?

Thanks! DealNews

{ 2 comments… read them below or add one }

mrs b October 15, 2011 at 5:24 pm

I shop the deal sites a lot–but like everything else, from drug stores to supermarkets to amazon, I look at what I’m paying versus what I’m getting–is it a good deal overall or not? It’s all about how my dollar gets spent, not the apparent % off of an original price.

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Taylor October 16, 2011 at 3:20 am

if im still getting a great deal, then it doesn’t bother me too much.
they obviously try to make the deal look better so more people buy it but even then, its still pretty good

Reply

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