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Why I won't be using Groupon again.. A consumer perspective.
196 points by contactdick on June 13, 2011 | hide | past | favorite | 173 comments
I took a friend out for dinner last Friday and thought it might be a good time to take the plunge and Groupon it. It was an £18 pound deal to get to get £46 pounds of food at a Tapas bar. My thinking went something like this. I like Tapas, the restaurant is a little out of the way but that's ok, the savings mean we can get some nice food, a good bottle of wine and try new place. So I made the booking, slightly curious about how it would all pan out.

When we arrived, the place didn't look too appealing from the outside though it did have that kind of Film Noire dirty back alley appeal which I guess is a charm in itself. But you can't judge a book by it's cover so I made joke about it, took a mental to at least Google Earth the next blind restaurant I book and strode on in.

It was a much more pleasant experience from the inside, a friendly waitress greeted us and asked if we'd like a bottle of wine. We ordered a pretty decent bottle - upper range of their price list and chatted about the menu. When she came back to take the food order, I pointed out that we'd be using a Groupon voucher to cover part of the cost of the meal (not that it should make any difference but just as a politeness thing). I did this in a slightly awkward apologetic way, using a voucher to pay for a meal isn't something I do often and it just makes me slightly uncomfortable.

As soon as this happened though, a dark cloud came over the proceedings. The whole atmosphere of the meal changed. The face and cheery demeanor of the waitress visibly dropped. It was like I'd sucked the fun out of her. She glumly pointed out the bottle of wine we'd ordered wasn't available on Groupon so we'd have to pay for that separately. The wording of the voucher had been 'Authentic tapas for two with bottle of wine at xxx tapas bar and restaurant - value £46.00'. We also had to order the other bottle which was not on the menu but priced around £20 pounds leaving us with 26 to spend on food (when we tried it later, even my limited wine palette could tell that £20 pounds wasn't exactly fair value for it). She did actually say to another waiter passing by "it's another Groupon on table 4" which did more to make us feel cheap and dirty.

Having read about the Groupon experience from a business side, I felt some sympathy. I know that %50 - %100 of the money we paid for the voucher was going to Groupon and that Groupon customers are apparently 'tight and argumentative' - they were probably sick of people like us by now and trying to recoup some costs with the old 'cheap overpriced compulsory wine switch'. Anyway, having £26 pounds left to spend on the food, we went a fair bit over. It was decent, but I'd never go there unless they were offering a massive discount as they were. Our portions were surprisingly small, and in my new found state of Groupon paranoia, I looked around at some of the 'non Groupon’ dish sizes for a size comparison.. I hope it was just my imagination. The meal ended up being £42 pounds + the £18 we'd paid in advance. £60 pounds for an average meal and two bottles of wine isn't great value, but more significantly, I learned the restaurant actually despised 'Grouponers' - clearly they had become jaded with the Groupon experience. Fortunately for us, we could simply scratch it from our list of restaurants to visit and forget the whole experience. As I was walking home, I went past the Tapas bar on my street that is only 3 months old but continually turns people away because they are too full. I had the realisation that good restaurants don't use Groupon because they don't have to - word of mouth is much more effective. Bad restaurants use Groupon because they have to - and any place that can discount so much for their customers makes me question how ridiculous their prices are to start. To any small business thinking about using Groupon:

1) The only reason I went there was for the discount 2) I will never go back there 3) If asked by my friends, I'd say it was overpriced (relative pricing is a powerful thing)

I think you might be overestimating how much insight the waitress has into the business. It may be the case that this was a close, family-held restaurant and they have a daily pow-wow on cost of goods and marketing strategy, but I wouldn't bet that way. My guess? Groupon customers are poor tippers, either from adverse selection or because they either a) attempt to tip with leftover funny-money or b) tip based on the amount they paid rather than the face value. Thus, mentioning you to other waitstaff: they're complaining about prospective tips. ("Gah, I drew another Groupon while you get a good table.")

Put it this way: if you had put twenty quid in her hand when you sat down she would probably have instantly become the most devoted Groupon fan in the world.

I took the same Groupon deal with a similar outcome (although we stated from the outset we had a voucher so no awkwardness about stuff we'd have to pay extra for). That said:

* This is in London, which doesn't have the same "tipping culture" as the US. Sure hospitality jobs don't pay great, but both my wife and I have worked them in the UK and you can definitely get by without tips. Getting snippy about a drop in tips is nowhere near as justified here.

* We each bought a cocktail before ordering (£8 each x 6)

* As is becoming the norm in London, "optional 12.5% service charge" (good luck ever opting out of it though) was a separate line item on our receipt and it was calculated off of the face value.

* I specifically checked the terms of the offer and the menu options prior to buying the voucher. Despite choose from "the tapas menu" you actually get to choose from "the Groupon version of the tapas menu". The latter being about half the size.

* I left an extra tip at the end mainly because I know the economics for the merchant on running Groupon deals. In hindsight neither the service not the "special" treatment you get as a Groupon customer warranted it.

Because of their attitude I won't be back, that's the cost for making an assumption about me as a customer. I'm still undecided whether I'll use Groupon again though. Maybe seeing this insight into this restaurant was a good thing?

Because of their attitude I won't be back, that's the cost for making an assumption about me as a customer.

That's the rub, really. I find it hard to blame Groupon themselves for stuff like this (though certainly Groupon has other aspects that are complaint-worthy). If you're going to treat customers poorly because they've taken advantage of a deal, I don't really want to be your customer. And if it's such a bad deal for you, as the restaurant, why are you participating anyway? If you really feel that the extra customer acquisition is worth the lower revenue for the sale, then you should be happy when Groupon customers come in. If you don't believe it's worth it, why do a Groupon deal at all?

The people who determine whether to do a Groupon most of the time are not the waiters and service ppl who have to put up with horrible tips.

True, but the waiters and staff are the public face of your restaurant. The owner/manager doesn't get involved in every meal they serve. If you suspect your staff will get cranky with Groupon customers, you need to fix that. I don't care if that means firing the worst offenders and making it clear that you won't tolerate such behavior, or if it means ahead of time declaring that you're going to "fix up" bad tippers behind the scenes by supplementing with the restaurant's cash. It really doesn't matter to me how they resolve the situation, but the owner of the restaurant is responsible for giving his/her customers the best experience possible.

Here's the thing that rubs consumers the wrong way: "the Groupon version of the tapas menu."

IMO, if a business is doing this and trying to cut costs then don't be surprised if that person does NOT convert into a regular customer. It's penny wise pound foolish.

It's obvious that people are smart enough to spot that their servings are smaller and their choices are limited compared to normal people. That angers customers! It's as bad as microwaving your food and thinking people are clueless and can't tell microwaved food from fresh food.

Sure, maybe you're saving a little here and there but you're almost guaranteeing that that person won't come back.

My experience as a several-time Groupon user: I've found that restaurant Groupons tend to get you lousy service from cranky staff. Other businesses tend to be better.

I know one hamburger restaurant chain here in Seattle, the Counter, that is now on the second round of Groupon, and this round they offered two coupons per customer -- so my thought is the first round couldn't have went too poorly.

I went in with a Groupon and the experience was first class. Great service. They actually had one guy whose main job was to scan the Groupons. I asked him how things were businesswise with Groupon and he said really busy, but he said now that they can just scan them in, pretty easy (last round they had to look up each coupon by hand).

I of course tipped on the full amount, plus some, because the service was excellent. I liked my meal, and the wife and kids did too. We'll be back. And this is a place I may not have gone to w/o Groupon, although I had heard positive things from neighbors. But Groupon definitely got us the last mile through the door.

My feeling is that now, as a business owner that can use Google, if you don't know what you're getting into, you probably won't be business long with or w/o Groupon.

So at the end of the day, it's not a Groupon promotion that will draw you back, but the great service...

Groupon got me in the door. But the great service and good food will make me a regular customer.

he went there because Groupon. then came the chance of drawing him back.

Groupon customers are definitely poor tippers. I've known a number of waiters to complain about it.

The problem is they tip on the Groupon price, not the full price, and are thus tipping something like 40% of what they should be.

Groupon coupons even have a note to prevent poor tipping:

"*Remember: Groupon customers tip on the full␣ amount of the pre-discounted bill (and tip␣ generously). That's why we are the coolest␣ customers out there."

In the few groupons I've used, I've tipped more than my normal 20% on the full price because I know I've saved money. Except for the one time when I encountered a waitress that acted like groupons were a hassle. It makes me think that poor tipping is exacerbated by a feedback loop: Waiters give worse service or are less enthusiastic to groupon holders, which leads the groupon holders to tip less thereby reinforcing the waiters' impression.

The problem is they tip on the Groupon price, not the full price, and are thus tipping something like 40% of what they should be.

I am not intimately familiar with the tipping culture (at least in the US), but here are some genuine questions: Is there an inherent reason you tip on the full price? Is it a tax? If tipping is to support staff wages does that mean waiters who serve fancier higher priced food items are entitled to larger wages solely for the fact that their table happened to order a costlier meal?

IAmerican tipping culture: there is a near-involiate presumption that wait staff gets tipped N% of the order. Customary practice recently is N is 20. Theoretically, tips are tied to service received. In practice, variation from societal norms is vanishingly rare in polite company.

Waiters in higher priced restaurants do make better tips as a consequence of this. That might matter if the culture were designed. It was not, it merely came to be.

FYI, apart from suffering social opprobrium, the big reason to always tip is that wait staff are taxed on your imputed tip whether you give it or not. This leads to compelling social justice reasons to tip even if one does not share the culture.

Side note - in California 18.5% is the customary practice for tips, though, to make it easy, you can round up to 20%. No service person will complain. If you get lackluster service, you can point it out with a 15% tip. Poor service gets a 10% tip, and, will make it clear you are unhappy.

After 15 years of doing this (I'm from Canada, where tips aren't as proscribed, though they are still expected) I find it awkward and socially painful to pay the bill in countries in which there is not a tip expected (certain parts of Australia) - even though the locals assure me that no one will think the less of me.

I find etiquette fascinating, so I've read some books on it. Particularly, in tipping etiquette, prescriptive books seem to agree about one thing:

In the US, if you're going to tip less than 15%, you should not tip at all. You should leave nothing and ask to speak with a manager to explain why you won't. If the failure in service doesn't rise to that level, then 15% is the minimum polite tip.

Of course, it's your wallet so do what you think is best. But this seems like a reasonable practice, so I follow it. I've actually never had to speak to a manager about service at a restaurant, though.

The books are not correct as far as practice goes. 10% was standard for years and 15% for great service. Waiters of course have been trying to promote 20%, 22.5% and more as normal.

10% is not great, but is what senior citizens and rich politicians will leave if they tip at all.

10% is considered an insult in California, and will be treated as such.

I accidentally left a 10% tip at Fisherman's Wharf (Early on in my california experience), and was approached by the Maitre D as I was departing, asking what was wrong.

If you can't afford to tip, best just not to eat there in the first place.

I've also noticed that many lower-end restaurants will print pre-computed tip values at the bottom of the sales receipt for 15%, 18%, and 20% (both as a prompt and as a "nice" thing to do so you don't have to do the math yourself). But these values seem to always be calculated off the post-tax cost of the meal, whereas convention seems to be that you tip based on the pre-tax subtotal.

10% has not been standard in the US for quite some time. You need to update your info.

18.5%? I live here in CA and have always done 15 but feel recently being forced into 20... but I could never calculate 18.5% in my head =)

I like to keep it simple. 20% or 25% for fair to good or really great, 15% for poor service. I too don't like how people are trying to push this value up. But at the same time I have enough and I don't mind sharing some with a person who has just served me dinner.

You can do it pretty easily by successive halving. 10%, just move the decimal over add 5% which is just half of 10% add 2.5%, which is half of 5% and add 1%, moving the decimal over twice

...of course you either naturally think that way or it seems like an unreasonable amount of work. YMMV.

Personally, I usually take 15% and add a bit depending on how good the service was.

A lot of the "classier" restaurants in my Canadian city, include a minimum 15% tip on the bill which is an interesting approach--Though it ravages the the funny after-meal banter I have when dining with my grandparents. "15% ARE THEY MAD?!!" Haha.

I'm in Canada, where tipping is just as expected as it is in the US. However, here it seems that 15% is standard for good service; 10% for fair service or a buffet/brunch meal (where the server was less-involved); and 20% or more for fantastic service. I had no idea California was so high.

Servers in all proper US/Canadian restaurants have to "tip out", which means paying a percentage of what should have been their tip on any table to support staff (e.g., bartender, host, kitchen). A server can tip out as much as 5% of the pre-tax bill --- or 1/3 of the expected standard tip --- which means that if you leave them no tip, they actually have to pay to serve you.

Also, often the IRS taxes them not on what they actually make in tips if it is low, but on what the IRS thinks they should have made.

Interesting; in the US it's common practice for all tips received to be pooled, and then divided among the waitstaff, busboys, etc. I'm not sure if they're divided equally, but everyone should at least get a pre-decided portion.

this is something that probably isn't clear to people who don't live in the US -- wait staff in the US make around $2-3/hour. they aren't paid a living wage. they rely on tips as their primary source of income, and tips are usually shared with a bartender/busboy.

if a restaurant runs a groupon and all grouponers tip on the post-coupon rate, the wait staff will be taking a rather large pay cut for the length of time that people are grouponing. i know i'd be grumbling if something my company did resulted in me making 50% less for a month or two.

more expensive restaurants and meals mean more expensive tips because the wait staff is more experienced, better trained, higher quality, and do more work. one person at a higher-end restaurant can give high quality service to fewer people than one person at a low-end place, and meals at a higher-end place usually take much longer. yes, the average tip is larger, but the frequency in which they receive tips is lower. yes, they make more, but not that much more.

wait staff in the US make around $2-3/hour. they aren't paid a living wage.

The rules for the U.S. vary from state to state. In Oregon, where I live, wait staff make minimum wage ($8.50 per hour) and tips are added on top of that.

All restaurants are required by law to pay at least minimum wage if the employee doesn't make at least said wage in tips.

How this works in practice is servers are fired if they do not sign off that they earned the difference in tips. This is a big issue with fast food restaurants like Pizza Hut, and cheap buffets where there is a lunch rush and then a slow period, coupled with a propensity of patrons of this sort of place not to tip because they think it is a buffet or fast food restaurant, not one where servers are paid $2.35. Often you have slow periods where there might not be any customers. Let's say from 1-5pm at Pizza Hut you have 3 tables and each leaves $1. So you made $3 in a 4 hr part time shift. You get paid $2.35 * 4 = $9.40 for those three hours. If minimum wage in your state is $8.25, you are required to report that you made $23.60 in tips during that period, not $3. You then pay various taxes on those phantom wages, notably social security and medicare tax, which are regressive flat taxes. You also may find yourself being forced to split the phantom wages with the dishwasher and manager. Often you make less than $0 during your shift. Some people can make up the difference during the dinner and lunch shifts, but those usually go to senior employees and the more attractive women. Getting more than 4-6 hrs a day is hard because then you are no longer a part time employee, which means the employer might have to start paying benefits, which would ruin their entire business model that relies on $2.35/hr wages and no benefit costs. Talk to anyone who works at Pizza Hut or most buffet chains to hear more about this in great detail, I have heard about this situation from dozens of people over the last 30 years.

I'm sorry you've had that experience. I've worked as a waiter, and was never pressured to report anything other than what I made. I'm not advocating for poor tipping, I was just clarifying for those not in the US how the law is written.

The experience is frighteningly common. More common to be forced to lie, than it is to not, in my experience.

Waiters and waitresses typically make more than minimum wage, once tips are taken into account. A cut in tips due to Groupons yields an effective cut in salary. Minimum wage is just the floor.

this is true, but sometimes people bend or break this rule (most people don't, of course).

Actually this varies by state. In California, the minimum wage law applies with or without tips.

wait staff in the US make around $2-3/hour. they aren't paid a living wage.

Not true. That's why we have federal minimum wage laws. If the wait staff are actually employed and not acting as independent contractors, then they are paid the minimum wage for their state. (Although I will grant that this being a living wage is definitely arguable.)

Edit: Correction - although not California (my state), apparently some states do allow minimum wages in the $2-3 range if employees receive tips [1]. For the downvoters, I only count about 5 states that do this, however. The original statement does not accurately reflect the majority of the U.S.

[1] http://en.wikipedia.org/wiki/List_of_U.S._minimum_wages

Not true. Waiters have a different minimum wage:


Question: Is it legal for waiters and waitresses to be paid below the minimum wage? Answer: According to the Fair Labor Standards Act, tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages. An employer may credit a portion of a tipped employee's tips against the federal minimum wage of $7.25 per hour effective July 24, 2009. An employer must pay at least $2.13 per hour. However, if an employee's tips combined with the employer's wage of $2.13 per hour do not equal the hourly minimum wage, the employer is required to make up the difference. The employer who elects to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the applicable minimum wage (see above) when direct wages and the tip credit allowance are combined. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.

So, although waiting tables is - predictably - not a great job, nearly all waitstaff in the US will be making 7.25/h as you would expect from federal minimum wage? And contrary to what most people attempt to convince me?

Coming from a country with a culture of smaller tips and significantly less social pressure to give them, I usually say that I should not be forced to make up for the employer's false advertising when receiving only mediocre service. This now seems correct - not tipping wi make the employer pay the remainder, not force the waitstaff on to the streets. Right?

Nearly all waitstaff in the US will be making more than 7.25/h. If "not tipping" suddenly became endemic, I imagine plenty of waitstaff would be forced "onto the streets".

"Tipped workers" are paid under different rules, and it varies state by state. They typically have a minimum cash wage ($2.13 federally and in NY for example) and an hourly "tip credit" ($5.12 fed/in NY) to bring them up to standard "minimum wage" ($7.25). They only get paid $2.13 an hour by their employer.

More here: http://www.paywizard.org/main/Minimumwageandovertime/Minimum...

Actually this is true. Average tips are calculated when determining hourly wage. I worked as a server for 4 years in high school/college. My hourly wage was about $4/hr while the minimum in Florida was $6.25. My paychecks mostly went to paying taxes on my tips.

yes, you're right, what i said wasn't fully true for expediency's sake, but your statement isn't fully true either. federal minimum wage laws don't apply to tipped workers in the same way (iirc, it varies based on the state, i'm not sure).

if an employee doesn't at least make minimum wage after tips are considered, an employer is required by law to compensate an employee up to the point where they do make minimum wage. in theory.

in practice, this doesn't always happen.

Yes, I added a correction.

Is there an inherent reason you tip on the full price?

Yes, theoretically the higher your bill the better time you are having. (Think celebratory events as opposed to a lunch break.)

Is it a tax?

No, it's gratuity. You're showing your appreciation for the staff enabling you to have the best experience possible at that time (in theory).

If tipping is to support staff wages does that mean waiters who serve fancier higher priced food items are entitled to larger wages solely for the fact that their table happened to order a costlier meal?

Serving higher priced food usually means higher caliber of customers, in the tipping sense. For example, patrons of Denny's restaurants might tip well if the coffee refills are on time, but in a finer dining establishment, for example, service requests for something off the menu (like a newspaper) would not be out of the ordinary.

Right, we pay our waitstaff next to nothing in terms of hourly rate (it's well below minimum wage) and they make all of their money on tips. If a bill is $50 worth of food, you should tip the waiter on that, even if you got it with a Groupon that cost $25.

Waiters at higher-priced restaurants do make considerably more. Thus those restaurants are far more selective (a lot of waiters at, say, Fridays are new to the trade, not so at Mortons) and the waiters are better. Their jobs are more time-consuming too since there are more courses, wines, they're expected to be more knowledgeable about the ever changing menu, etc.

This doesn't address your question about culture, but the one time I used Groupon the sheet we printed out with the coupon on it specifically asked that we tip on the full price.

Sounds like a pretty sensible practice.

Yes, it's a tax thing. A lot of restaurants base your taxes on your gross sales, assuming you will get 10-15% in tips. Coupon deductions are not calculated in this gross.

Generally speaking more expensive restaurants have better trained and more experienced servers that are more attentive hence deserving in a better tip. The percentage is really just a hack as a rough estimate of how much work a server had to do. While not always true a meal costing $100 will probably require more work from a server then a meal costing $50.

The company is offering the coupon, not the waitress/waiter. It'd be like every time the company you work for offers a discount to a customer, you see money taken out of your hourly wage or salary. Personally that would make me livid.

I always tip on the full price of the meal.

In the US, wait staff at restaurants are paid $2.35/hr, same as the minimum wage in 1975. Each time since then that the minimum wage has been raised, there has been an exception for agricultural labor (field workers can be paid $10 for a 12 hr day if you like and often are) and for restaurant workers.

For high end restaurants it's not so bad since you can make a living on tips. Also, it doesn't apply to fast food workers who don't get tips. However, some especially seedy fast food restaurants like Pizza Hut will have the staff bring out the food, meaning they are exempt from minimum wage. The problem is most Pizza Hut bills are small and half the customers don't realize they are supposed to tip since they think of it as fast food.

In addition to this, most restaurants have no benefit programs or insurance at all. In addition, as is customary in the US, in most cases if you are injured at work, a story will be constructed and you'll be fired.

I tip because that's how my society operates. I tip well^ because it means I get above-par service.

^well is relative to what they expect, so this is where the quality of the restaurant is factored in by myself.

Do you tip before the meal then, or is this based on being a repeat customer?

Repeat customer.

I generally only eat at small family owned joints anyway, so that helps as well.

Also places that have more expensive food tend to have more people to spread the tips around on. The waiter splits the tip with the person busing tables, the person refilling your water glass, the host etc.

Groupon does instruct customers to tip on the full price. It's probably part of the picture they draw when they're pitching to businesses — so when people skimp on the tip, it's a rude awakening.

That's a good point to consider - it must be hard for a waitress / waiter to swallow that their evening will take a pay cut because their boss has decided to get into social advertising.

She/he shouldn't have to. Groupon customers should be tipping on what the full amount would've been without the Groupon.

The onus could just as fairly be applied to Groupon itself as to its customers; shouldn't Groupon be helping the restaurants it does business with, by encouraging/reminding customers to tip servers fairly, and not harm the staff of its business partners?

They encourage that prominently in several places, including this message on the actually coupon voucher:

"*Remember: Groupon customers tip on the full amount of the pre-discounted bill (and tip generously). That's why we are the coolest customers out there."

I've got no lost love for GroupOn, but this massive pile on/proof by anecdote thing is not a dignified moment for HN.

Agreed she/he shouldn't have to but from one everyone is saying it sounds like that is the reality.

That really surprises me. So disappointing. I've always been taught to tip on the full cost, even if I'm getting a deal. This isn't new because of Groupon; gift certifcates/cards and vouchers have certainly been around forever, though perhaps not as prevalent or well-publicized.

In defense for consumers, normally tip should be calculated off of the pre-tax subtotal. Most restaurants calculate tip (say if you're in a group of 6 or larger so it becomes compulsory) based on the post-tax total. So tip, as it is, isn't always accurate.

I think you're spot on that Groupon customers are poor tippers. This was in the UK though where the tipping culture isn't so common place.

Yeah, it's already common to not tip anyway. Sometimes I tip, sometimes I don't (though when I do, I'm more generous than the standard 10%).

FYI: 10% isn't standard: 15% is standard, 20% is good, and 25% or more is for great service.

Those are the norms in the United States, which has a tipping culture that is more or less unique compared to other countries.

In the UK, 10% is standard and entirely optional. 15-20+ is if you're feeling super generous.

Yes, although it's also common in the UK for restaurants of any level to add 10% to the bill for larger groups of perhaps 6+ or 8+ people in a way that is clearly not meant to be optional.

I never quite understand people who always pay 10% for service here, though. If I have received good service, I will tip perhaps 15% or more, partly to reward the good work financially and partly simply because it shows that I appreciated their efforts and encourages similar behaviour in future. Likewise, I will drop a tip to 5% or even not leave anything at all if service has been poor. In a happy coincidence, this means I tend to be regarded as a good tipper in the kind of place I want to go back to, and a poor tipper only where it doesn't matter. :-)

I also only ever tip in cash, directly into the hands of the waiting staff I've been served by. What they choose to do with it after that is up to them, but you'll never catch me adding some arbitrary amount of "service" onto a bill that's going to be paid on a card machine and go straight into the hands of the management.

That's standard in the USA. In the UK it is not standard, however 4 weeks minimum paid vacation (and about 8 days paid public holidays) are standard. Different countries.

(in the US, not Europe)

This is why I despise using coupons (or gift cards, for that matter) in restaurants in general. Coupons, like it or not, have a distinct stigma associated with them that never nets you a pleasant restaurant experience.

More than anything else, I think the OP is complaining about restauranting with a coupon/gift card rather than utilizing Groupon, specifically. That said, he's correct that the model is broken for this very reason.

also, it sounds like the company is (understandably) restricting what is available to try reduce the losses implicit in the deal. that means hassle for the waiting staff, who need to explain the restrictions. i imagine, for example, that in this case the waitress had previously had problems with a similar group who ordered the "wrong" wine and then were vocally unhappy. when they found out.

Yeah good point. She did explain it to us and point out the wording of the deal as though she expected us to argue.

Groupon customers are poor tippers

And that stinks. I was a fine dining waiter at one point in my life and lived on tips. Because of that I always tip on the full value of the meal regardless if I have a gift card or coupon.

I agree with the tipping problem, I myself try to tip based on the total value and not what I pay (because that may be just for a few drinks). I don't want the waiters to suffer for the business owners discounts :)

Here in Czech republic we have local variants of Groupon and in some restaurants people reported the despise from waiters too. Surprisingly, this did not happen when we went to one that was otherwise really expensive - the people there were very nice and friendly. We won't return there regularly because it's out of our price range but for special occasions I would like to go back.

Regarding the quality - from my experience it's about 50/50, some restaurants are bad, some are ok so maybe contactdick was unlucky in encountering the wors first.

It's good to hear you'll go back to the nice restaurant. For some reason I can't get over the mindset that if I return I'm no longer getting the discount so it's way too expensive.

If you can put twenty quid in her hand, then you wouldn't be bothering using Groupon, would you?

Even people who have money will take a deal if it's offered. That's often how they wound up having money.

My perspective is that there is a systemic disconnect between what serves the restaurant's interests and what serves the staff's interests. A Groupon promotion may help fill empty seats and sell off perishable inventory, but that may not be a benefit for the staff that work for tips.

This is a massive problem for the consumer, because the promotion is for some specific food and drinks, but not for service. If the restaurant is unable to motivate the staff to like the deal, you may have to negotiate separately ("I know these deals can be a PITA, but we intend to tip on the face value of our meal"). This isn't the customer's fault, of course, and I sympathize with the OP for crossing this restaurant off his list: Why return to a restaurant that doesn't work out how to make their staff happy about the promotion?

A bigger question is whether this is an isolated incident or something to expect when dealing with similar deals. From what I know about the way small restaurants are managed, I would expect this to happen on a fairly regular basis.

One possible solution: The fine print of the deal could levy a 15% gratuity on the face value. Customers who want the freedom to tip less should exercise the freedom to pay the face value of the food and beverages. If I was offered a $100 dinner for two for $40 plus $15 mandatory gratuity, I don't think I'd bark about it.

I wasn't aware tipping was all that common in the UK but here in Canada I would be wary of using Groupon for that exact reason. Personally I find tipping to be a nearly meaningless exercise (nearly because occasionally great service deserves a bit extra). Because I live in a country where we are expected to tip, restaurant owners do (and are allowed to with lower minimum wages) expect to be able to underpay their staff and let them live off tips.

It is to the point where most chains have a tipping system where wait staff tip out to everyone, chefs, bussers, etc so everyone gets a chip at it. If you undertip the wait staff can actually lose money.

I'm tired of being responsible for someone elses paycheck. Most restaurant waitstaff are merely ok, not amazing and not deserving of something extra, nonetheless I feel obligated to pay 15%+ anyways because of the culture.

Worse than this there are many here who despite the tipping culture feel perfectly free to never tip or undertip, leaving the rest of us to make up the difference (how do you think we go from 10% being a normal tip to 15-20%?).

It's for this reason alone and because I know most Groupon users are brutal cheapskates I will probably never take a Groupon for a restaurant. Though one persons advice to tip up front or at least let the waitstaff know you have no intention of only tipping on the remainder is valid and if you are going to get a groupon deal you'd do well to remember that.

What sucks about this whole anecdote is it means owners using Groupon are getting doubly screwed. They are getting one-timer coupon clipper who don't care about the crap service since they are never coming back anyways, and they are getting potential first customers who are not going to come back now because of the bad service. Even worse they will likely get negative word of mouth.

Of course there is a simple solution here, plan ahead and don't mistreat your staff by making them beg for tips. Personally I have zero sympathy for restaurant owners since they themselves are the ones who maintain this bullshit tipping culture.

You've hit a few proverbial nails on the head for me there. Having lived primarily in a number of countries where tipping was entirely optional and rarely more than 10%, I still find it awkward when I travel to the US. I generally follow the 20% lead these days but the figure is always determined based off the service I've received, as I've justified the absurdity of it as "the wait staff get ripped off by not being paid a fair wage and I have to top it up for them". There have been occasions where we've dined in quite expensive restaurants in NY and the food has been bad enough for me to send back (something I'll rarely do). But on both occasions the wait staff were polite and understanding and stuck the items off the final bill. I stilled tipped at 20% of the original bill + a little extra because at the end of the day the fact the meal wasn't cooked wasn't their fault and I didn't think they should be punished for it. Sharing that tip with the rest of the staff makes a mockery of the whole process and my justification.

And then I think; In almost every other profession you're expected to do your job to the best of your ability every day. Your "tip" is still being employed the following week.

"I'm tired of being responsible for someone elses paycheck."

I agree, I think mandatory tipping is absurd. I think people partially disassociate tip with their assessment of a restaurant's cost, so is a way for restaurants to appear cheaper. I think wait staff should perform to the best of their ability or be fired. I find it ridiculous to pay someone $1 to open a beer for me (ie. a bartender) or spend 30 seconds taking my order and then bringing my food out to me. Other times you are expected to tip maybe $1 for someone rigorously drying my car after a car wash. Seems disconnected. I hope technology helps offset this cost (automatic bartenders/ordering machines).

I'm also not sure why some restaurants have not tried to create a model of anti-tipping. I know many people that would like to go to a place that essentially says: "We pay our people well, if you feel that you have gotten a great experience, please tip by sharing us with your friends or donating to this charity."

I enjoy tipping. There is a vast difference between decent service and excellent service. Given the choice between paying more for my food and having no control over the tip vs. having the ability to tip proportional to my opinion of the service, I'll take the latter.

I'm tired of being responsible for someone elses paycheck. What's the alternative? Do you think the total cost of the night out would go down if the waitstaff was paid more? You're going to be paying their salary one way or the other, it's better that you get some input on their performance I think.

Maybe, but I'm sick of the way the price of everything in America is a lie.

This steak will be thirty dollars! Except it won't be, because you've got to pay tax on top of that, so it's thirty-three dollars! And then you've gotta pay an extra fifteen percent minimum on top of that, only apparently people think you're cheap if you only tip fifteen percent nowadays, and you just know you're going to be too lazy to do the maths properly so you're just gonna wind up rounding it up to forty dollars, aren't you?

On a recent trip back to Australia I did discover everything was very expensive, but at least you pay the price it says and not a penny (errr, cent) more. No mental arithmetic, no stress.

But if there's no culture of tipping and employers actually have to pay a fixed salary, situations like these wouldn't happen, since the waiters wouldn't be affected by coupons.

Do you think everyone is tipping as fairly as you are?

It's really sad, because it's not only good restaurants that do the Groupon thing. It can be a good way to advertise your business in addition to the standard (boring) ways.

Any restaurant that treats their customers like crap because the customer uses a deal that the restaurant approved is... Well, rude. I don't have much use for rude restaurants. For a lot cheaper, I can cook the food myself, and it's probably as good. Worse, the time spent is about the same, too! And cooking can be fun.

So in the end, what does a restaurant offer me? New dishes, and good service. Most restaurants don't have the former, so that just leaves good service.

The restaurant in this post failed at the only thing they can offer their customers. And all because they made a bad decision. (I'm assuming they think it's bad because of their actions.)

I'm not a Groupon apologist. Some of the tactics I've heard lately are downright dirty, and detrimental to both the restaurant and Groupon both. But it's not inherently a bad thing.

There is a distinct possibility that restaurant owners approved the deal with Groupon but staff is left to suffer the consequences, possibly with little warning from management or the owners.

The restaurant business is not exactly raking in the big bucks right now, with the continuing (and deepening) recession, and the owners may have signed on in desperation to claw out whatever money they can.

I'm not sure how it matters what part of the company went wrong. As a customer, you only care about the end product. You don't care whether an owner or a waiter failed to do their job. The responsibility for the failure always lies on the business.

I should say the service wasn't horrible - it was just so noticeable the change in attitude from when we were regular customers to 'Grouponers'. I do like the point that half the value of a restaurant is the service. Except in Chinese restaurants, my favorite one has terrible service but the food is great and it seems to add to the character of the place.

You felt unwelcome. That's horrible service, no matter the reason!

It's quite possible that they give excellent service when the customer is not using a coupon. But I'm guessing you'll never know because of how they treated you. Even if you aren't their target market (because of the cost and driving distance, etc) it's possible that you would take someone there for a business deal or date because you remembered how nice it was. (Nevermind the outside.)

They defeated the whole point of groupon: To attract new customers.

Instead, they are actively pushing them away.

I think the biggest problem is that the staff and sometimes the owners don't understand what is the biggest possible gain - to get people in the door and then blow them away with great service and great products. I guess Groupon and the other giants probably don't tell the companies this enough. If I buy a coupon and get great service (pretty much the opposite of the story above) I would come back and recommend it to my friends. What companies end up doing, is paying through their noses to spread bad reputation about themselves.

If the restaurant would have treated the customers like all the other guests and maybe let them order the more expensive bottle of wine while explaining that it's actually not included (with a smile!) those two guys would have walked out happy and would probably have returned.

Groupon and the other coupon sites is a marketing expense, so treat it like one. You don't put up ads in the magazine with a discount and then scare away the customers when they show up! I don't defend the coupon sites, they seem to take a whole lot of the money for a small benefit. However, if you go into the deal, you might as well make the best of it. They will use the groupon no matter if you're nice or not.

I see 5 problems:

1. An offer for "Pay $X for $Y of Z" have at least anecdotally led to people spending $X+(small number) where a lot of those who offer such deals are expecting more (the Gap was a notable example of this). Perhaps a better model is a capped percentage discount on the bill?

2. Evolving social etiquette of tipping. It may simply be that people are unaware that the right thing to do is probably to tip on the undiscounted price. Or it may simply be that those who are inclined to use Groupons are simply cheap. I expect it's a little of both;

3. No caps on offers is a big problem. It means businesses can't budget what are basically marketing expenses. For this to work you need to be able to track individual offers (so a person can't use the same offer twice). This has the added advantage of you being able to mine this data as you know who used an offer, when they did, what they spent, what other offers they've taken and so on;

4. Businesses seem to resent people using these coupons. This I don't get (other than the complaints of wait staff). It's a marketing expense. If a Coolhaus truck can sit a block away from my office in downtown Manhattan giving out free ice cream sandwiches for several days (raising awareness and creating a lot of good will) then you, as a business, owe yourself this: leave the customer happy. If they're unhappy you've just wasted your marketing spend on them; and

5. Having to ask for the offer upfront is BAD. It's awkward. It leads to at least the suspicion of getting smaller portions or otherwise getting the cheap version. It probably means you'll get worse service. The offer should simply be X% off a bill (max value $Y). Exclude alcohol entirely.

Honestly I expect Groupon to sink into the ocean. Businesses don't seem to like it. Consumers are having mixed experiences. The early investors have been paid off with large F/G rounds. Revenue per customer is decreasing. What Groupon is doing isn't exactly rocket science. I kinda see small investors being left with the bill for all this post-IPO.

It's a shame really because I see such things as a great way to promote a restaurant (which is actually hard).

I'll certainly watch the IPO though I won't be participating. My understanding is that they think they have a competitive advantage coming from the Groupon voice https://docs.google.com/View?id=dmv9rbh_2g92x4scj&pli=1&... - the way the write their ads.

I don't use groupon for restaurants or services because I'd probably hate it if I were in their shoes. I think business owners get roped in the same way that artists or programmers do free work because "it'll look great on your portfolio/resume".

I think you're right that they don't love it - and if I were in there shoes I'd have trouble keeping a pleasant demeanour if I was losing money from people being in my restaurant too!

This is opposed to the alternative of traditional advertising, where you're losing money on the people who aren't even in your restaurant.

These deals are reasonable to offer if your overhead is more than your incremental costs, for instance. Or if the look of a full restaurant (and thus the vibe) is more important than making money off of those initial customers.

The joke is groupon taking so much for brokering this. Groupon doesn't do anything to warrant $1 per coupon, let alone 1/4 the face value. If it takes off it'll be on ad-driven sites taking no or very little cut, and/or via the restaurants' websites and facebook pages directly.

A few weeks ago a tapas restaurant in my city ran a Groupon for the second time.

The comments on the deal were nearly universally from people who had purchased the first coupon, and when they tried to redeem them staff at the restaurant treated them like lepers.

I've only bought and used one restaurant Groupon and honestly I didn't really had a problem. Then again I didn't show it until it was time to pay (are you supposed to show it when you order?). It was a $15 coupon and we used it to cover part of a $50 tab for dessert and drinks. I imagine that was probably not the norm, and they likely more often see people who spend only $14 and ask if they can have a dollar in change.

I have no idea whether you're supposed to show it up front or not either - it didn't say on the voucher. I felt as though I should at least tell them.

I had a similar terminal groupon experience: I had meal of really, really bad indian food, at a restaurant I would never have tried otherwise and when I mentioned I was going to use a groupon I was told that my bill now included a 15% non-negotiable "service charge". In fact, my bill was taken back and changed so it was clear that the "tip" was compulsory.

Is that legal? Can restaurants legally include a serive charge?

They can put whatever they want on the bill but the post author was not required to pay it. Of course, he would be in a difficult position since the restaurant would have taken the tip and put it towards the service charge, so the author could not have easily paid for just the meal and the tip.

I've found that it's best to show the Groupon when it's time to pay the bill. I know we're supposed to show it when we sit down, but no restaurant has ever complained.

It sounds like a rather depressing experience, and I'm rather sorry to hear that.

That said, would you consider going back after the groupon deal, just on a purely scientific basis, to see what you'd rate it at based off a clean slate? I'm mildly curious about the actual differences when the place actually wants you there, as opposed to "handling" you.

I like your commitment to proper scientific process but I'm not sure I could bring myself to go back though - my heart is no longer in it..

that sample size isn't very scientific anyway

I've just recieved an offer in a Groupon mail listed as:

£69.95 instead of £239.00 - Classic Black Pentax I-10 Digital Camera with Kodak Portable Charger at Teqport

A quick search on Amazon shows it available at £74.98.

A restaurant wouldn't be able to do that because they'd scare off their regular customers. But for anything where they can set a special price for Groupon customers, I'd suspect they were giving a discount on an inflated price.

No doubt waiters loathe serving Grouponers.

I know that waiters in the US rely on tips, but I think it's unprofessional to deliver bad service just because they think that they won't get a good tip.

Which is strange considering that people tip for good/professional service. Maybe there is a self-fulfilling prophecy somewhere in there :)

I'm starting to think of them (and myself as one of them) as a blight on decent society too :)

If an established restaurant sees any sense in offering a 60% discount, it's probably already fucked. You said that the restaurant looked dirty and uninviting from the outside. That would be fine if it was part of a successful restaurant's branding, but clearly they're not successful, otherwise they wouldn't be offering a 60% discount.

Groupon is for the most part the small business equivalent of Pets.com losing a buck on every sale and making it up on volume. Anyone who has been in the business for more than five minutes knows that voucher customers convert very poorly to regulars. Given the size of the discount and Groupon's cut, there's no way that this restaurant could be profitably converting, particularly if they're making no effort at all to do so.

Badly run businesses are badly run; Film at eleven.

I'm really curious to see which way Groupon goes in the long term. With things like Yelp reenforcing a feedback cycle which directly effects the eating establishment in the long term, it rarely becomes all that great of a deal for the restararaunt or the consumer.

I agree, in the internet age I was hoping searching would become more efficient so that 'find good restaurant in xxx' was a sensible thing to type into a search box. Currently there's too much noise so places like yelp are a much better option. Interestingly Yelp hasn't taken off here yet.

To me sites like Yelp and Urban Spoon have too much signal to noise ratio as well. I readily admit I am a food snob. And not the tasteless, this place is expensive so I have to be seen here type. I am very critical of food. I have a culinary degree and I have a refined pallet when it comes to food. I eat at hole in the wall joints as well as 5 star restaurants and the only thing I care about and judge a restaurant by is the quality of the food.

I am constantly depressed by the high ratings that establishments receive on sites like Yelp and Urban Spoon only to go in and find that they are average at best. I have been to places with 95% positive ratings on Urban Spoon and walked away very disappointed in the quality of the food. I have seen fast food restaurants like KFC and Taco Bell with 9x% ratings on Urban Spoon. Meanwhile I have went to places with a 60% to 70% rating and the food has been out of this world.

When those sites where small, unknown and mainly frequented by foodies, it seemed like the quality of the ratings where much better, now they are little guarantee of quality. Now days, I really only use them to tell me what is around and to weed out the really bad joints. If a place is below 50% positive review I avoid it above it and it is a crap shoot.

The problem is people go out for dining experiences for a variety of reasons and they rate a restaurant for all those varieties. Being a foodie, I could care less about anything but the taste of the food. If it has the explosion of flavor I am looking for, I don't care if I am eating it on a paper plate in a plastic chair. Ambiance has no value to me where others it does. The demeanor of the wait staff has no value to me (other than the amount they will be tipped) where others it does.

They really need multiple flags on these sites so that people can rate the different aspects accordingly (I have not been on Yelp in a log time, so forgive me if this has been done). For me the only flag that counts is quality of food the rest of the weight being put into the positive and negative rating is just noise for me. While others may value something totally different and want to see the ratings weighted based on that.

These sites are a great start, but they have a long way to go, before that can seat you at the table you want to be at, with any degree of accuracy. The only value I have found is that they prevent you from ending up in a place that is really really bad. Then again Taco Bell has 9x% rating in my town, so even that is not a guarantee.

Oddly Tripadvisor is much, much more reliable, at least for me. Where I live (Edinburgh, Scotland) the top 10 or so restaurants listed are indeed, uniformly, excellent quality - and all the Michelin starred places in the city are in the top 20.

True, the Michelin places don't come right at the top, but I'd defend most of the places that do come higher up as offering as good a dining experience considering price and variable taste. Sometimes (often) you're just not in the mood for a £200 tasting menu.

Agreed on all parts. I'm a Yelp Elite member and I have had to learn how to read the reviews with a certain... distrust?

Some people will always knock down any place, no matter how good the food is, on price alone. That 5-star french place? Terrible! They charged $8 for a side of something!

You learn who reviewing you can trust and who you can't. I've recently moved to Columbus Ohio and I've found that people here have no taste for Sushi. You could take some gum off your shoe, put it on some rice and they'd think it was good and exotic. Places that have solid 4-star reviews here for sushi taste worse than stuff I'd get from random Trader Joe's in Boston that had been sitting there for 2 days.

So it goes both ways. I generally look for things about the service (a big one to me, and something that this down just doesn't know anything about either it seems), plus a little about the food quality. I wish it was the other way, but generally except for the basic description of their varieties and pricing I can't trust the reviews.

I'm an avid user of Yelp and find the overall ratings to be usually quite accurate. The caveat, though, is that the restaurant/business needs to have a sufficient numbers of reviews so that all of the top and bottom end outlier ratings are negated by the overall average score.

Also, keep in mind that the ratings are based on the complete experience not just the food. If someone had great food but a bad experience with the waiter, they may have no problems leaving 1 or 2 stars. Crap food with awesome service could get 4 stars.

It's Yelp, not Zagat or Michelin. If you use it appropriately, it will work for you.

Sorry to hear about your experience, but to be fair, I have to admit that I personally had just one bad experience in about 25+ visits of restaurants in Germany and Austria due to Groupon and Daily Deals offers. That location turned out to be overcrowded and the staff rude.

The other visits were pleasant or at least we had no complaints afterwards. We DID go back to some of the restaurants (even without coupons) and recommended some to friends. Some others aren't really nearby, so we might not visit them again, but I'd recommend them as well.

However, I first google for reviews of the restaurants/companies before buying a deal. I'd not buy a deal for a restaurant with no or only mediocre reviews. And I present my coupon before ordering - that would have saved you from the bad experience with the first bottle of wine.

Of course, it greatly depends on the restaurant. If they don't plan the Groupon project, they may get overrun shortly after the deal. And the tip problem is already mentioned - so staff isn't always glad about "deals customers." I've even heard discussions with "deals customers" on a neighbor table that insisted of getting money back because their bill was lower than the deal.

Worst I experienced was not with a restaurant but a deal for a walking tour. The company was totally overbooked, promised to provide more dates for tours, but never delivered. Even 6 weeks after the deal, customer service turned out to be great and refunded the deal promptly.

A friend of mine bought a deal from a small photo studio (90% discount) - and yet (about 5 months after the deal) waits for a confirmation for an appointment: "We are fully booked until at least end of next month." Hopefully, the studio will be still in business at the time he gets an appointment (or he gets a full refund).

Its not Groupon or Daily Deal to blame for bad experience, but the business owner. But due to the growing popularity of the deals, places are more likely to get crowded after a deal. And because Groupon and co think that "the more, the better", they approach businesses as well that don't deliver great service all the time or are just unable to handle the amount of deals sold.

I think Groupon suits the purpose if you would be visiting a restaurant that has a usually high amount of coupons or vouchers changing hands. Here in the UK if Franky & Bennys offered the coupon I don't think I would think twice. I think also if it was for somewhere I frequented often and I know the standard of food is good then I would do also.

We had a situation earlier this year with a voucher where the terms were not fully explained, we went to Manchester (England) and sat down in a restaurant called Giraffes. The voucher did not explain that it could not be used before 7pm. It was 1 in the afternoon, I sat there regardless and continued to be ripped out (£8.50 for a breakfast, cheapest thing on menu) and in total paid £40 for some dinner.

In terms of tipping, I generally leave a tip if around 10%, more if the person waiting is really good and a good personality, less if I think they are over acting it to get a higher tip. They don't get anything if the food is crap or over priced. I don't think I have been anywhere recently where I have not used a voucher or coupon, it's not because I am tight, it's simply because they are there. I don't consider myself a bad tipper either.

I know what you mean though about feeling bad about using vouchers or coupons, I feel slightly guilty about it. I think the English culture is slightly different though, I think we don't like confrontation and I feel this goes into that realm.

Stick to voucher cloud, check the terms though properly before sitting down!

That's very true, though if you only go to places you know and trust then Groupon isn't doing it's job for the restaurant! They're simply giving a discount to loyal customers.

Well I generally only deviate from the restaurants I visit when I have done the entire menu. I try to try everything on a menu then I try a different place. I guess the model doesn't really work for me, I wouldn't generally try somewhere different unless I have seen the place and I wanted to try there anyway.

I guess that's me though, everyone is different. I have been stung too many times in the past with bad meals and I am probably the fussiest customer you will find. If I had been going to a place for years and they started serving bad meals, I wouldn't think twice about not going there again. I don't generally complain about a meal, not going there again is good enough for me.

I like the insight into the Groupon experience as a whole though, this is probably what would happen to me so I'm glad I had never taken the plunge.

Restaurants should either not go for Groupon. If they do, they have no business despising Groupon customers. Doing that makes no sense. It is they who decided to go for it in the first place.

Absolutely. But I think there is a disconnect raganwald points out between the owners / managers who had the idea of going to groupon and the staff who feel it's effects.

Ultimately, Groupon needs to understand this and work this into their sales script/recipe so new restaurants/customers can prepare for the Groupon event.

However, they may be too busy preparing for IPO so the investors "get paid".

I've used Groupon several times, and I've never had an experience like that. I don't get the feeling that I've been treated differently or badly after showing the Groupon.

>Bad restaurants use Groupon because they have to - and any place that can discount so much for their customers makes me question how ridiculous their prices are to start.

In my experience, the restaurants that use Groupon are mediocre to good. Maybe it's a regional thing, but there are so many restaurants here that even many good restaurants aren't very busy.

What this restaurant didn't seem to understand is the fact that groupon is like any other promotion. It's a loss leader that brings in new business. Perhaps the groupon customers wouldn't have been so bratty if the deal had been worded better, but who knows. The thing is that places like restaurants rely on repeat business and word of mouth as their primary sources of customers, and that's what groupon is designed to bring. I think the fault here is not in groupon's hands but the restauranteur.

that's pretty much the main reason I don't use Groupon etc, if you are so desperate as to use a groupon to promote your business and get raped with all those fees, then chances are the quality of the service will be extremely subpar.

that's why pretty much the only coupon I ever bought was for Amazon.=

And the Amazon promotion was from LivingSocial, not Groupon.

Yep, it's the only Group/LivingSocial deal I've done as well :)

It's a good point that it would be very 'industry' specific. If they are simply delivering goods it's hard to cut corners. Though that said it's not easy to cut such large amounts from physical goods.

The whole point of a business (especially restaurant) using Groupon is to gain a repeat customer base. To that end, it would make more sense to give better than normal service to the 'cheap' Grouponers.

For a restaurant, what will cause people to come back is quality & service - so if you are outlaying cash (via discounts) to gain customers, you would think you would go out of your way to gain a repeat customer.

Perhaps this is more of an education for the wait staff, and perhaps the restaurant owners should realize the people using a coupon may not tip well, and make up some of the difference for the wait staff - and emphasis the importance of converting them through service & quality to be repeat customers.

Otherwise - why would the owners do the Groupon at all?

I had a very similar experience at an Indian restaurant in Salt Lake City. Once the server became aware we had a Groupon we were treated poorly. Since that experience, I have resisted the urge to use Groupons as I would like to avoid being treated as an inferior.

Something close to 'Eat like a human' springs to mind.

Well, 1) I have had both good and bad experiences going to restaurants via Groupon.

And 2) Groupon isn't just for restaurants... If it were then it'd be out of business already. I've gotten Lasik for much cheaper via Groupon and also teeth whitening.

It just so happens that restaurants try Groupons because they're already battling the odds for staying in business.

And seriously, isn't this over 9000 times more effective than burning money on flyers or a commercial? It gets them INTO the restaurant. From there it depends on the restaurant to bring them back in a 2nd time with charm and great food.

So instead of blaming gift cards, coupons or even Groupons, blame management for not using Excel and the staff for not charming potential customers.

The best quote I heard was from Jon Beros, who is the general manager of Scoopon (which is the leading Groupon equivalent in Australia): "You need to make sure they’re treated like a first class customer, not a second class coupon holder."

A friend of mine who owns a beauty salon says Scoopon worked with her to ensure they have capacity to serve the customers they're predicted to get.

P.S: The reason I don't usually tip (in Australia) > we have a minimum wage for wait staff that, on Sundays and public holidays at least, is often higher than my hourly rate on a professional salary.

I have a tipping story about Australia. I was there for two weeks on vacation and took a taxi to the airport to leave the country. The bill came to around $40 Australian and I had 50 Australian dollars. I told the cabbie to keep the change. He almost wrestled me to the ground to give it back. I told him I was leaving Australia and had no reason for 10 Australian dollars and the fees to convert it to US dollars would take 1/2 the money. He finally kept it but I honestly think I hurt his feelings and insulted him by making him take a tip.

Same experience for me -- twice in two settings.

1) I used a Groupon at a korean restaurant in Cambridge, MA. When I went with my friend the waitress was delighted, but once I mentioned the Groupon her enthusiasm completely faded and she became much more rude.

2) I used another restaurant Groupon at a pizza place on Newbury St. in Boston, MA. Ordered the pizza but once I pulled out the Groupon she had a sour look.

I don't understand why these friggin' business do Groupon if they are just going to assholes. Argh, just reminiscing and writing about these experiences pisses me off.

As long as you tip based on the non-discounted total I don't see the problem. Unfortunately many probably don't do this, which is why the waitress probably was unhappy to see a groupon customer.

I feel much more comfortable using a certificate from restaurant.com. They automatically add 18% gratuity to your bill, so that there are no issues with tipping. And they structure deals such that you have to spend a certain amount, e.g. your $25 certificate requires a $35 purchase, ensuring the business makes some money. It's perceived as a gift certificate more than a coupon. Even better, they frequently have sales where $25 certificates are only $2.

In the US Groupon guarantees you'll be satisfied with your experience. If you didn't like the restaurant then tell Groupon and get your £18 back. This restaurant sounds like they did a very bad job of designing and executing their Groupon and it hopefully will end up costing them money and reputation.

Unless that policy isn't in place for Groupon in the UK?


I had the same experience with a Sushi joint in Montreal.

Good to know it wasn't a one off.

Well I was all set to sympathize, but I don't think it's necessarily unfair that the coupon couldn't be applied to any bottle of wine on the menu.

I do think that if the point of the coupon is to attract new customers, then it is extremely counterproductive and foolish to hide the conditions of the coupon so that people are disappointed, and to treat customers badly for using it. That's just bad management.

While I think groupon can be very useful for some business model, especially ones where you can control bookings and cross/up sell. I think groupon is going to be hurt when the economy becomes bullish because fewer businesses will be desperate for sales. I think livingsocial has a better longterm future because of its better terms for businesses.

I had a similar situation with Living Social and a deal booked for English Tea in London. They had tables available right up until the point I said I had a coupon, they then told me they were fully booked, past the date of the voucher. Complained but only ever got 1 out of the 2 vouchers purchased (at £21 each) refunded.

This has nothing to do with tipping. Groupon is a flawed business model.

Consumers who are willing to pay $ for something are not going to be repeat customers who will then pay $$$ for the same thing.

It's a modified pyramid scheme, the only people that benefit are consumers and Groupon it self, even though they are losing money out of their asses.

A note about other service industry deals on Groupon:

I've read somewhere of people buying discount coupons for services like haircuts or aesthetics, only to find that when they call for an appointment, couponers have longer waits than non-couponers for scheduling. That alone makes me uneasy.

Perhaps the owner could price in lower tips for those that wait on groupon tables. Heck, you could even spin it a bit "at the end of today we will draw a groupon voucher and the waiter gets 50 dollars that served them"

It's interesting to me how many news articles are out lately taking a negative tone toward Groupon. I'm sure that has a lot to do with the upcoming IPO (and I won't be an investor based on the numbers), but I thought I'd share my experience with Groupon, because I've never had anything close to this sort of problem.

We had a $20 for $40 deal at a restaurant owned by a local restauranteur. There were no restrictions other than that the Groupon couldn't be used for the tip, which, on the Groupon indicated that the tip should be made against the total bill because "groupon customers are good tippers" or something like that, I found that statement kinda silly, and I just thought it was common knowledge in the US that you always tip on the pre-discount price.

The place had piqued my interest because it was nearby and it wasn't a chain nor did it appear to be owned by one of the larger businesses that plant unique, but rather predictable, restaurants. That's unusual around here.

There were little/no reviews of this place on Yelp and I can say with certainty that there is no way I would have tried this place at this time were it not for the Groupon. The restaurant was "new", which usually equates to a long line and an unprepared kitchen staff. I have children, and frankly, when there's an opportunity to take my bride out for a night on the town, I'm going to go someplace that I know will be good. Nothing is worse than setting up a date, a baby-sitter, and then getting crappy food/service and overpaying for it. Because of said baby-sitting fees, I also won't venture to a place that's far away. I'd rather spend the money on the meal, not the college kid who sits on my couch and watches TV while the kids sleep.

This place ended up being fantastic. It was also inexpensive even without the Groupon. So to point #1: The only reason I went was because of the discount, but point #2, we've already been back once and even later purchased a $50 gift card for my dad on Father's day. I think a lot of the issues with point #2 have to do with the small business in question. We didn't have any limited "Groupon" menu (and I wouldn't buy a deal that's structured that way ... there would be too much of a temptation for the owner to cheapen it up if they were having a bad Groupon experience), nor were there any alcohol limits (which is really common).

Groupon worked great, at least for me, in discovering a new local business. We're planning yet another trip back in two weeks. My bride and I both wrote a thorough Yelp review afterward, we liked the place so much. Is it a good value for that business or would that money have been better spent advertising in other ways? I have no idea/that probably depends on the business. If he's got the working capital to run at a loss for 6 months, I'm willing to bet this place sticks around, provided the food quality doesn't change (the price could go up substantially, and I'd still continue to eat there).

Thanks for this. Great to get both sides of the debate.

To me, this is kind of like saying "I won't use OkCupid again because the person I met through it was a real jerk."

Maybe we need a site ( or a yelp feature ) where Groupon experiences are reviewed

Next time don't mention your voucher until the end of the meal.

But then they wouldn't have gotten the discount because they'd have ordered the 'wrong' wine.

They also wouldn't have received the poor service and smaller portion size that the poster perceived having received. It's on the customer to read the fine print of the deal and order the "right" wine, anyway.

There was no fine print - the deal was as quoted. But you're right if we hadn't mentioned it, the night would have been more pleasant. At least till the end..

Groupon failures, opportunities:

I see several things...

1. Businesses are not empowered the IT system of groupon should take the grudge work out of tracking groupon deals, educating those who get a groupon offer for business, etc. 2. The group IT system should empower the sales staff to be as flexible as possible in groupon deal runs.

I see is a combination of IT improvements and realizing that you are educating 3 or more distinct group s at once and the IT system has empower that approach.

Whoever, does that will at some point reach the efficiencies Groupon needs to reach to reach profitability as being more effective will all 3 groups means less salesperson time per salesperson per group.

imagine a restaurant on a good Sunday where the place is crowded and absolutely all the customers are Groupon coupon users,

the main aim of the waitresses and cooks would be to get the Groupon people - meaning - everybody - out of the restaurant as soon as possible - that goes against all principles of running restaurant business ..

i think you're missing that the entire point of "tapas" restaurants is to rip you off in the first place.

"how can we get someone to pay for their entire meal as appetizers?"

some MBA student got a good grade for that one

If you're getting ripped off, you're going to a bad tapas restaurant.

Speaking from experience, a meal at a good, appropriately-priced tapas place should cost the same or slightly less than a meal at a regular three-course restaurant, and should offer what seems like an endless stream of food!

I hope we can contribute at least some part of the kudos for inventing tapas restaurants to the Spanish as well as the MBA students.

i'm not referring to spain, where delicious tapas are cheap and plentiful, but to the americanized concept where the going rate for 3 bites of food seems to be about $7

Do you really not understand why the waitress's demeanor changed the moment you mentioned using a coupon? Seriously?

You know wait staff live on tips right? You know that people who use coupons are notoriously bad tippers right? There are very, very few people who feel they got a deal so leave a bigger tip. Most leave a tip based on what they paid, not on what the meal should have cost and people that use coupons tip at the bottom of the scale to begin with.

If this is the case, then as far as my reading of the story goes, upon discovering that she was serving people who she believed would be stingy tippers, she behaved in a way that would make even a generous tipper leave nothing.

This seems counterintuitive.

This seems counterintuitive.

Worse, it creates the results expected, reinforcing the bias, leading to more bad service because the worst suspicions have been "confirmed."

Now everyone is screwed.

Wrong country. In the UK, wait staff don't live on tips.

I don't doubt that people that use coupons are probably statistically poor tippers, but this seems like a self-fulfilling prophecy to me.

If you expect someone to tip poorly, so you give them poor service, of course they are going to tip poorly!

Of course it's easy to understand and I sympathise with her but it doesn't make it enjoyable!

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