The Groupon Trap

5747629074_0e8d37a0e8_oGroupon is great, right? It’s right up Mr. NYBudget’s alley. It saves you money while you experience things in the city. What a great deal!

Nope.

When Groupon, LivingSocial, and Scoutmob  first arrived on the scene, I was all over them. I thought I was being a savvy consumer and grabbing some great deals. But the more I used them, the more I realized their true nature. These are just tools to get you to buy crap that you don’t want or need. Every day you get an email from them (or multiple emails) taking over your inbox. The emails themselves have become less and less Mr. NYBudget—friendly – years ago, they told you about their deal of the day and have slowly expanded to emails and landing pages FULL of deals.

A quick look at Groupon’s website now reveals that they have deals for restaurants, experiences, electronics, sporting goods, pet supplies, getaways, automotive supplies and services and way too many more to write here. The sheer volume of “deals” indicates to me that they aren’t about “the best deal”. They are about EVERY deal.

Nevertheless, I was a subscriber. Some days, I would open up an email and say, “look, there’s a Groupon for 50% off some restaurant. I’ve never heard of the restaurant before, but that is an amazing deal!”

Every once in a while, I found a deal for something I really wanted: the perfect birthday present for my sister or a new restaurant that that served food I had never tried. But, for every Groupon that was a perfect fit for my wants, there were 10 more that I bought simply because Groupon bombarded me with deals day after day. I found myself saying “what a great deal” without thinking “is this a great deal for me?”

We all have moments of weakness when it comes to purchasing. I certainly do. I buy things and then regret my decision later. For those moments of weakness, Groupon is always in your inbox, ready to capitalize.

So, Mr. NYBudget, are you supposed to stay in your apartment and never do anything fun? Of course not.

Paying full price for something you truly want to do is cheaper than paying half price through Groupon if you factor in the 10 other things you bought that you didn’t truly care about. As I always say in this blog, making conscious choices about how you spend your money (not sacrificing, but choosing) will do wonders for your wallet as well as your happiness. And if you are choosing to pay full price to go to that restaurant you are excited about, you can save in the long run by not spending money on the less important “deals”.

Plus, there are so many ways to have fun in the city without spending any money at all! But that’s for a future blog post.


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11 thoughts on “The Groupon Trap

  1. Justin @ RootofGood December 4, 2013 at 1:44 am

    You have a point there! If you blindly load up on Groupons that you wouldn’t have bought otherwise, you’ll probably spend a lot more on eating out.

    I started out subscribing to Groupon, then realized I was wasting a ton of time browsing and occasionally bought a groupon for something I didn’t really want, “but it was cheap!”. Ha ha.

    I’ll visit every once in a while to see if there’s anything new or exciting or they have deals on some of our favorite restaurants. There’s a Mediterranean buffet that’s a little pricey at $10 for lunch. But with the groupon, we can usually dine for $11-12 total for the 2 of us. Not a bad price for something we have rarely and don’t quite have the recipe perfected for home cooking.

    The best time to use Groupon type of sites is when you’re on the road or on vacation. You can dine up a bit and pay the same price as you would at Denny’s (do people still go to Denny’s??). Cooking in your hotel room is pretty difficult or impossible, so dining out is kind of a cost of doing business. And part of the fun of travel.

    • Mr NYBudget December 4, 2013 at 4:32 am

      Thanks for the comment! As part of being more aware of my spending, I am also trying to be more aware of times when I am being marketed to. Years ago, my father once told me that marketing doesn’t affect him. I think marketing affects even the most frugal of us after a while. We can’t be strong 24/7 with our frugality!

      I definitely agree that there is a time and a place for Groupon, though – but when you are already planning on spending on an event or dinner!

  2. Stefanie @ The Broke and Beautiful Life December 9, 2013 at 5:23 pm

    Groupon can be good SOMETIMES. You really just have to be vigilant about making sure it’s a real DEAL. They were offering a groupon for the MET for $18. But the MET is suggested donation anyway. NOT a deal.

    • Mr NYBudget December 9, 2013 at 6:35 pm

      I agree that they can have very good deals. Just as long as you don’t look back at your spending habits and see that getting those emails meant that you spent way more on these “deals” than you ever wanted to in the first place. Groupon and other impulse deal emails are a budget’s worst friend.

      But, if you do it right and go to the site only when you have a plan to treat yourself to an activity and, as you said, you make sure that the deal is actually a good one, then it can be beneficial for sure.

  3. Andrew@LivingRichCheaply December 12, 2013 at 6:05 pm

    My wife falls into this groupon trap often…and yes I do too sometimes. They sound like great deals but really make you buy things that you normally won’t. They are a good thing if it’s for something you would have bought anyway.

  4. Leslie Beslie January 22, 2014 at 9:45 am

    Groupon is essentially a coupon. And coupons make you spend money. Why else would the company itself offer you discounts???
    Leslie Beslie recently posted: December Monthly Spending in NYC 2013My Profile

    • Mr NYBudget January 22, 2014 at 10:21 am

      Exactly! It’s the whole “see how much I saved” comment that you hear from people. All I hear is “I spent a little less, but I still spent!”

  5. NZ Muse January 26, 2014 at 4:23 pm

    I’m still subscribed to a few daily deal lists, but I can’t remember the last time I bought a coupon. There really aren’t any deals that appeal to me.
    NZ Muse recently posted: What to do when visiting AucklandMy Profile

    • Mr NYBudget January 26, 2014 at 4:28 pm

      It’s amazing how my view of “stuff” and “deals” has changed since I focused on my personal finance. You’re right, these deals just don’t appeal to me anymore.

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