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:As for apologizing to the merchants, I am assuming that they must have known all the way along about how many orders were they capable of handling before they had to resort to delivering that what was not the same as the advertised deal.*

I think that assumption is perhaps optimistic. Your average local takeout place is not Toyota: they probably run things mostly on feel, rather than on having a rigorously documented and optimized process, and it is highly unlikely they've ever thought through capacity planning for "Can you take five times your busiest day ever? Can you take ten times your busiest day ever?", because for traditional businesses that just doesn't happen. Groupon's strategy for addressing this apparently includes communicating to merchants that Groupon is capable of overwhelming them past anything they have previously experienced.

I've heard a lot of people who are mad at the merchant and think it's their own fault for accepting so many orders. That may be true, but there is a huge conflict of interest for Groupon. They get a chunk of the money for each deal so I can only imagine hey push the merchant to offer as large a deal as possible. I would love to see how their sales staff operates. Groupon's interests are pretty aligned with the customer; they probably view merchants as upstream suppliers who need to be squeezed for maximum profit.

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