Coupon deals deliver mixed results for businesses
The popularity of promotional coupon websites is proving to be both good and bad for Halifax business owners.
There are now dozens of promotional sites or group-buying sites offering deep discounts on anything from lifestyle services to restaurants and travel.
The stock may be surplus or offered at a greatly reduced price to commit a certain number of customers to a business. The deals are usually only offered for a short time and if enough people don't sign up, the deal disappears.
Often, the countdown clock encourages consumers to pay first, check the expiry date later.
Half the sale goes to the website owner. Restaurants like The Five Fishermen Restaurant & Grill, which recently offered a $20 brunch for seven people, gave up almost three quarters of the value on a recent deal.
In return, the website — Groupon.com — delivered 1,000 customers, which was worth it according to the restaurant's general manager.
"If it's a new guest and they become a regular, that's where you really see the benefits," said Shane Robilliard.
Groupon.com also allows businesses to limit the quantities.
Another site, Dealfind.com, does not limit quantities, and one local business owner found that out the hard way.
Helen Kirschner advertised a $29 deal for 90 minutes of housecleaning from a team of two from her company, Five Star Home Care.
"If I had it to do over again I wouldn't touch it. We normally expected 300-400 vouchers sold and in the end, it was 1164," said Kirschner. "The calls started the very next day … we were swamped."
Kirschner has hired more staff to clean up from the three-day promotion, but the deal is costing her much more than she's making.
It's a different story at a salon spa, where teambuy.ca has been hired for the second time. It's advertising a $39 special for two haircuts worth more than $100.
"It's about a 74 per cent discount, but the whole point is to get these people to come in and to re-book," said Matthew Landry of Totally Yours Hair Salon and Spa. "The last deal I did … I had eight out of 10 people rebook, so it was fantastic for me."