Group buying vouchers – bargain or bogus?
Fancy a haircut and colour for $35? A soothing massage at a day spa for $45? How about a case of wine for $29? Or perhaps a three-course dinner worth $150 for just $30? It sounds like a pretty good bargain, especially in these cash-strapped times.
These are just some of the deals offered by the retail phenomena sweeping Australia - group buying. A few years ago group buying wouldn’t mean much to the average punter but now One Day, Daily Deal, Treat Me Grab One, Snatch a Deal and Group On are the major players offering group buying vouchers that give consumers products and services that are heavily discounted.
Group buying: Who runs the show and how does it work?
Products and services are offered by retailers at significantly reduced prices, usually on the condition that a minimum of buyers make the purchase. Most group buying sites offer a deal of the day, with the deal kicking in once a certain number of people agree to buy it.
Customers print off a voucher that allows them to claim their discount with whoever is supplying it. It should be win-win. The customer gets a big discount and the retailer gets a bunch of new customers and hopefully repeat business down the track. And of course the group buying site negotiates a percentage of the sale price to boot.
It’s a concept that has been a hit if the numbers are anything to go by. A recent forecast revealed group buying in Australia will grow to a $400 million industry by the end of 2011. In the US, Groupon, the big daddy of all group buying companies, recently listed publicly on the market for more than $12 billion.
Group buying: Saving money and bagging bargains
For the savvy bargain shopper group buying can be an Aladdin’s cave of temptation arriving in your inbox every day, with offers ranging from weekends getaways, spa and massage services, hair and beauty treatments, as well as actual products such as cupcakes, wine and even shoes.
It’s “first in, best dressed” as the emails (and the websites) urge you to snap the deal ASAP before it’s gone forever as most deals are only on offer for a day or two. For bargain hunter Sarah, group buying sites are her first port of call when shopping. She says she’s snapped up everything from great meals for next to nothing, heavily discounted wine and even six months of beauty treatments for just $99.
Group buying: Pitfalls and reading the fine print
Yet for every good experience there are complaints, from restaurants that never answer the phone, to hairdressers that continually tell you that they are booked out, to flip flops that, despite being ordered months ago, are unlikely to arrive before the end of summer if at all.
As the sites are put under the spotlight, we have our fingers crossed that the experiences become more positive and we can all benefit from the power of the group buy.
Group buying: 7 essential tips before you buy
1. Check that the company you are using provide an easy returns policy.
2. Do your research before you agree to buy. Check that the item or service isn’t available elsewhere for a similar price – a quick internet search should tell you. The group deal may not be quite the bargain it first seems, especially if it comes with a heap of restrictions.
3. Read the fine print, if it’s a service or experience check the times you are able to book. A cruise that’s only available on Tuesday mornings might not really be that much of a bargain, nor is the haircut you need right now that via a group discount could see you waiting for eight weeks.
4. Who is providing the service? As a rule if it’s a large, well-known company or establishment, they should have the capacity to deal with the increased demand. For smaller places – buyer beware. Can a single spray tan salon with just two rooms really provide 400 spray tans deals in two months without going into meltdown? Do an internet search on the company in question, look for reviews or find their phone number and make some enquiries.
5. Not all services are safe. Plenty of sites advertise laser hair removal, laser skin treatments and even Botox and injectables for heavily discounted prices. These are dangerous treatments in the wrong hands; you should always get a full consultation in person before agreeing to go ahead. There’s no point buying six months of laser hair removal treatments if you are not a suitable candidate for it in the first place.
6. If you find the temptation of endless offers pouring into your inbox too much and you’ve blown your budget and maxed your credit cards, set up a separate email account and check it only when you want. Alternatively unsubscribe to the daily emails.
7. If you do have a problem, put the details in writing and know that, in many cases, you should be entitled to a full refund. If you have no success with the company in question, contact the Fair Trading or Consumer Affairs department in your state for further assistance and advice.
This article was originally written by Kate Holmes for Kidspot.com.au and was adapted for Kidspot.co.nz