­How To Spot Rip Off Group Buying Deals

groupon-rip-off

Groupon made waves when it first launched a few years ago. Who wouldn’t appreciate steep discounts at his or her favorite restaurant or bar, right? Social buying, as exemplified by Groupon, works this way. A merchant makes an offer to the buying platform where the merchant will sell X number of items at price Y if Z number of people register into the discounted program.

Members of the social buying site then get notified about the offer and they tweet or post updates on Facebook regarding the deal. Once enough people buy the discounted item online, the deal goes live and people who buy the item online can print out a coupon they use to take advantage of steep discounts. Sounds good so far? Well, don’t get too excited.

The truth is you aren’t in the clear just yet when it comes to saving money. There are many group buying merchants who use group buying sites to publicize their businesses. They aren’t really all that interested in letting the public get a good deal. Read the tips below to learn to recognize the signs of a group buying ripoff.

Huge number of people required

One of the most obvious giveaways regarding scam or shady group buying deals is when the merchant has requested that several hundred or an abnormally huge number of people need to buy into the deal before the deal goes live. If you think about it, the merchant has everything to gain and nothing to lose if they require huge enrollments. Why? They get lots of attention-especially if the ‘discount’ is very low-and their brand is blown up by would be participants through the Internet.

Shady merchants, of course, would be smart enough to offer a discount that is not so steep that enough people get excited about the deal and sign up. They are basically betting that not enough people will sign up while the ones that did would have given their company free social media promotions. That’s the trick. This scam doesn’t always work because they might be offering something that is so popular that even a mild discount is enough for a huge amount of people to sign up.

Smaller portions or lower quality

Many shady merchants would advertise products or services in amounts or in ‘special packages’ that look like the rest of their regular, non-discounted, offerings. When people actually buy the product or service, they quickly realize they got a stripped-down version of the regular product or service. Many shady players use this trick to offset the cost of the discounts they are giving. Others actually use this to turn a profit since the stripped-down version is so low in quality or substance that its cost is so far below the ‘discounted’ price that the merchant actually makes a hefty profit.

Merchants who use this trick sometimes see their greed blow up in their faces when word gets out about the ‘stripped down’ quality of the discounted product or service. They end up degrading their overall brand and people trust their business less.