Another Dealfind Failure - Pink Lime

[Shazam]

Originally Posted by burn_this_city

Pretty sure its the other way around, Groupon sells the vouchers and gives the merchant the money up front.

Nope, they take payment and pay you later.

Looks like they changed, as I remember reading a blog a while back when Groupon first started where they took some money up front as part of the process.

EDIT: Also looks like they added a "tipping point" benchmark, so if you don't have 25 buys, you don't pay Groupon anything.

[Vena]

It's not up to Groupon or any other group to explain the economics of these deals to business owners. If a business owner doesn't do his/her own due dilligence, then he/she isn't going a be a business owner for long.

[mykalberta]

+1 to Vena.

They can put limits on the vouchers, it kind of defeats the purpose if advertising is the goal. I think the smartest groupons are the bar/restraunt ones where its 20$ of drinks for 10$

You would think though handing out flyers with expiration dates in a 20 block radius would do just as good.

I havent had an issue in redeeming any of the groupons I have purchased. The LivingSocial Fairmont hotel+golf deal almost got me, but you cant buy 2 or 3 and make a mini vacation out of it as they can only be redeemed one at a time.

[ma-skis.com]

Originally Posted by mykalberta

+1 to Vena.


You would think though handing out flyers with expiration dates in a 20 block radius would do just as good.

this makes me wonder if they end up with a cut of all the coupons sold in those deals.. like the pink lime ended up with a lump sum cash immediately.

[darklord700]

Originally Posted by bizaro86

My guess would be this business is floundering, and they need the cash injection from the vouchers to stay afloat. It'll be interesting to see what happens if Pink Lime (or any Dealfind merchant) goes out off business more than 30 days after they sell the vouchers. Dealfind will only refund unused vouchers for 30 days (they probably pay the merchant then), so buyers would be SOL. That's especially crappy when there's no way everyone could get an appointment within the 30 days.

I walk past Pink Lime everyday and it doesn't have the look of a thriving business. Problem is, once a merchant got all the Groupon and Clones money and declares bankruptcy, the voucher holders are left holding the bags of useless vouchers.

I'm not saying Groupon and Clones, and their merchants are running a scam but if us outsiders can see it so clearly that you can't hire a massage therapist for $12.50/hr, why don't the merchants see the same?

Would it be that the merchants are so desperate that Groupon and Clones' cash injection is their last resort?

[mykalberta]

Originally Posted by ma-skis.com

this makes me wonder if they end up with a cut of all the coupons sold in those deals.. like the pink lime ended up with a lump sum cash immediately.

Thats how I assumed it worked from a dealers perspective. I figured Groupon kept a % just in case for refunds etc.

Its a little like the electronics rebate scam. You pay up front - the problem is with the rebate scam only about 33% of people actually claim the rebate - with this I am guessing they have over 90% of people cashing in on the Groupon.

I have always wondered if there was a way retailers could limit purchase to certain postal codes. You would think a retailer in the deep south would prefer to have deep south clients rather than the coupon cutter crowd parachute in when they will not likely be a repeat customer.

[Olao32]

I am confused how the expiration of the vouchers is even legal. Didn’t Alberta pass a law that gift certificates cannot expire anymore? Or are they getting away with it because it’s for a specific purpose?

[BlackArcher101]

Originally Posted by Olao32

I am confused how the expiration of the vouchers is even legal. Didn’t Alberta pass a law that gift certificates cannot expire anymore? Or are they getting away with it because it’s for a specific purpose?

I was (and still am) confused about that as well. The recent deal for Baton Rouge from Groupon expired sometime in July I think. That's not a lot of time to use a ton of coupons.

Perhaps that's how they get away with it. It's a coupon and not a gift certificate. Still, the fact you paid for it means it must have a value that can't expire or decrease.

Seems odd.

[getbak]

Originally Posted by Olao32

I am confused how the expiration of the vouchers is even legal. Didn’t Alberta pass a law that gift certificates cannot expire anymore? Or are they getting away with it because it’s for a specific purpose?

That only applies to things that have an actual cash value, like gift cards and gift certificates. As long as these coupons are redeemable for a specified product or service, or a percentage discount, or something of that nature, they can still be given an expiry date.

For example, AMA sells discount movie admission vouchers, which all have an expiry date on them. This is legal because they don't have a dollar value, they're just good for one movie admission.

[Reaper]

Originally Posted by darklord700

How long can such a small salon survival on making $49X50%=$24.50 minus credit card fee for providing two hour of services?

The real question is "How long Pink Lime can go on hanging their professional reputation on being one of the salons that dressed hair for Wayne Gretzky's wedding in 1988?".

[DuffMan]

I bought a Clearly Contacts coupon from groupon yesterday. There was 290 something sold when I bought. I looked later and it was sold out at 305.

[Julio]

Originally Posted by DuffMan

I bought a Clearly Contacts coupon from groupon yesterday. There was 290 something sold when I bought. I looked later and it was sold out at 305.

Exactly...the small companies should put a relatively low limit on both how many coupons you can get @ once, and on the total number they ship out. A small service company on the hook for months worth of work is a recipe for disaster.

[bizaro86]

Originally Posted by getbak

That only applies to things that have an actual cash value, like gift cards and gift certificates. As long as these coupons are redeemable for a specified product or service, or a percentage discount, or something of that nature, they can still be given an expiry date.

For example, AMA sells discount movie admission vouchers, which all have an expiry date on them. This is legal because they don't have a dollar value, they're just good for one movie admission.

Sure, but what about the ones that are good for $40 dollars at XX restaurant? How is that not exactly the same as a gift card/certificate?

[DownhillGoat]

Originally Posted by bizaro86

Sure, but what about the ones that are good for $40 dollars at XX restaurant? How is that not exactly the same as a gift card/certificate?

It is. They can't expire. If it says good for 1 entree (a $40 dollar value), or $20 in drinks at bar X (and in the fine print it's 2 free drink tickets after a $10 cover), those can expire.

If it's a straight dollar amount for any given good/service at X company, they can't expire.

[darklord700]

Originally Posted by bizaro86

Sure, but what about the ones that are good for $40 dollars at XX restaurant? How is that not exactly the same as a gift card/certificate?

Two interesting links:

http://www.servicealberta.ca/1290.cfm
http://www.qp.alberta.ca/574.cfm?pag...=9780779741816

"The regulation also does not apply to promotional cards, loyalty cards, phone cards or cards sold for a specific service. For example, a card that entitles a consumer to a manicure and does not have a specific dollar value is not considered a gift card. If it does not have a cash value, it is not covered by the regulation."

I guess that why movie vouchers can have expiry date on them because they have no cash value and is only redeemable for certain goods and services.

It is debatable if a Pink Lime kind of voucher - "$49 for $200 of Massage, Mani and Pedi" has cash value.

You can say it has no cash value and is only redeemable for certain goods and services, in this case $200 "worth" of Massage, Mani and Pedi but not to $200 of hair styling services.


After giving it much though, I would agree that Groupon and Clones are walking a fine line here. If the advertisement is $49 for Massage, Mani and Pedi, then I would agree that it is not a gift card.

In the case of Pink Lime, I would agree that the vouchers are not gift cards because they can only be redeemed for Massage, Mani and Pedi, a specific set of services. You can't even use them to get a two hour massage and no mani and pedi or vice versa.

But then there are a lot of Groupons like $20 for $40 dollars worth of goods at say GAP which is good for ANY goods at the GAP stores. Those I would argue are actually gift cards and shouldn't have expiry date.

[mykalberta]

I would assume its considered a promotional card.

The ones that dont expire are the $20 Safeway gift cards you buy for $20.

[DownhillGoat]

Originally Posted by darklord700

You can say it has no cash value and is only redeemable for certain goods and services, in this case $200 "worth" of Massage, Mani and Pedi but not to $200 of hair styling services.

That right there is the loophole.
Safeway gift card for $50 = cash for $50 redemable on any product at Safeway

$200 value for $49 on certain services does not = $49 cash in the salon.

Originally Posted by darklord700

Pink lime said they received 900 calls for reservations and I'm like the 1000th caller.

You should have demanded a prize. Like concert tickets or something.

[bizaro86]

Originally Posted by kunkstyle

That right there is the loophole.
Safeway gift card for $50 = cash for $50 redemable on any product at Safeway

$200 value for $49 on certain services does not = $49 cash in the salon.

You should have demanded a prize. Like concert tickets or something.

A lot of them are for gift cards. This one: http://www.groupon.com/deals/goo-goo-baby?c=dnb&p=1 is for $40 of baby items at an online retailer called goo-goo baby. They basically only sell baby stuff, so it's a $40 gift card, but there's an expiry date.

I can't see how that possibly is within Alberta law. Probably a class-action law suit waiting to happen.

Lots of other ones like this. $40 for food and drink at XXX restaurant is a $40 gift certificate. If they said you get a specific meal that's worth $40, that'd be different, but that's almost never how the restaurant ones work.

[DuffMan]

My clearly contacts groupon one expires 7/27/11.

So, apparently it is only good for 3 months. Good thing this thread made me think to check.

It was get a $70 um thing for $29.
Now that I am looking a little closer it is actually called a groupon, not a coupon or gift card.

[DownhillGoat]

Originally Posted by bizaro86

A lot of them are for gift cards. This one: http://www.groupon.com/deals/goo-goo-baby?c=dnb&p=1 is for $40 of baby items at an online retailer called goo-goo baby.

Do you actually get a gift card though? The link still says $30 for $60 value. Also, the common regulation on the groupon coupons is that it doesn't cover taxes. A cash/gift card from a store will. I'm guessing that's what avoids the alberta laws and probably the class action suit.