The author has great points. Why the company is not transparent is obvious – the refunds they issue hurt the growth. I personally have about $500 in “Groupon Dollars” in my account. Deals I couldn’t or didn’t use, that because I’m in the State of California they cannot expire. So they don’t refund my credit card, but issue me funds to use on other deals.

I believe this company has a business model designed for disaster. Need to use my Groupon Dollars soon! (BTW, Author is also right on the inability to track refunds – a couple of times they refunded my account twice for the same purchase)

So what’s happening at the coupon company?

Well, for starters, it’s not a coupon company nor a marketing company. At its core, Groupon’s U.S. business is a receivables factoring business, as I wrote last year. They give loans to small businesses at a very steep rate (the price of the discount plus Groupon’s commission). They get the money to fund these loans from credit card companies such as Chase Paymentech. Groupon is essentially a sub-prime lender that does zero risk assessment. And as word continues to spread about what a terrible deal running a Groupon is for many categories of businesses, the ones that will choose to run Groupons are the ones that are the most desperate. For U.S. based businesses, the only time I can definitely recommend running a Groupon is if it is otherwise going to go out of business.

Source

Related Posts: On this day...

• Encom uses a very high-tech operating system - 2011
• This would make an awesome anti-zombie fortress - 2011
• Machine that puts together a book from a .PDF in minutes - 2010
• Man arrested at Large Hadron Collider claims he's from the future - 2010
• Electronic Arts releases DRM-removal tool - 2009
• Google's April Fools: GMail Autopilot - 2009
• Skype backdoor allows NSA to listen to your calls - 2009
• Sony BMG's hypocrisy: company busted for using warez - 2008