When is a daily deal not such a deal?
Groupon. Crowd Cut. Living Social. Plum District. These daily deal sites and many others crowd our in-boxes each morning with offers on ballet lessons, professional family photographs, and getaways over school break.
Boasting discounts of 50 percent off or more, they offer a variety of tempting deals, designed to help merchants attract new customers. The deal-a-day site gets a big cut of the voucher price and the merchant keeps the rest. Since these sites entered the Twin Cities market in early 2010, I can’t tell you how many daily deals I’ve purchased. My guess is close to 100. They can be a great way to afford after-school activities and summer camps for your kids, or to get a good deal on the birthday cake you were going to buy anyway.
But I’ve also learned that they can be too much of a good thing. Here are three potential pitfalls.
The deals expire
Even good deals can go to waste. The offers expire, usually within a few months after the sale date, or sometimes a year. It sounds like a long time, but I know from experience that deals can go unused as life gets in the way. Don’t throw your expired certificates away. Merchants should accept the vouchers for the price paid even after they expire. Not to do so would violate federal gift card law, which requires gift cards to be valid for five years. For example, if you paid $25 for $50 to spend at some restaurant, that restaurant would have to honor the voucher for $25. But there’s a debate about whether these deals are coupons or gift cards, and most merchants are less than thrilled when you walk in with a stale deal. I’d suggest having your calendar by your side before buying a daily deal. If it’s an offer for a waterpark that must be used by Labor Day, select a day to go right there. If it’s a deal on something that’s not typically scheduled, such as dry cleaning, come up with a system to keep track of these offers. I print mine out right away and stick them in a folder. You can also set up your accounts at some sites to email reminders when an offer is about to expire.
The deals are budget breakers
Sure they’re offering great value, but are you buying activities or services you never would have considered had that deal not landed in your inbox? Spending money you need to save, or going into debt for a deal is a terrible idea. Don’t get me wrong. These deals can be a great way to create family memories without breaking the bank. But $20 here and there really adds up. Not to mention that most deals are designed in a way that almost guarantees you’ll need to spend more than the voucher’s face value. Plus taxes and tips aren’t included, and you should be tipping on the value of the meal before the discount was applied. Then there’s the cost of gas, and the value of your time if you are tempted by a deal far from your house. And the impact on your waistline if the deals have you frequenting bakeries (although chances are you can buy a deal for boot camp on the same day). Bottom line: If you’re on a budget, don’t forget to include these deals. I’d build in some padding too, in case you ultimately spend more than the voucher’s face value.
Daily deals may not be the best deal
I’ve found comparable offers for fun kid activities in coupon books such as the Entertainment guide and Chinook Book, which cost around $20 for a book stuffed with deals. And I’ve gone to restaurants with a voucher only to realize that I would have ultimately spent less by taking advantage of a daily special instead (often times, a voucher can’t be combined with other offers), or by using a discount received through my Minnesota Public Radio or Twin Cities Public Television membership. Do your research before buying. Also consider whether it’s preferable to go with a pre-paid voucher for 50 percent off an item, or a coupon offering a smaller discount, but no financial loss if you never get around to using it.
Kara McGuire is a personal finance writer and a St. Paul mother
of three. Send comments, questions and story ideas to