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The Inevitable Ongoing Groupon Backlash Dogpile

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Failing to take the big Google payday, those horrible commercials?Groupon's getting bashed pretty hard these days. But the recent criticisms are primarily about the quality of the offerings and the (dis)service Groupon and its competitors provides to the mom and pops they court -- in fulfilling its sold Groupons, one business supposedly got deeper and deeper into the hole and ended up having to declare bankruptcy. The articles also allege that some of the Groupon spinoffs deliberately court businesses with spotty track records, like a cut-rate photographer who was passing off the work of others as his own. The conclusion is the whole model is flawed, resulting in a questionable product for end-users, and a deal that actually hurts many of the businesses it's supposed to enrich. We happen to know a couple of business owners -- one who owns a salon, the other a massage studio -- who did Groupon to disastrous results. They both reported that not only did the business lose money on every Groupon, but the employees got burned, too. Not only are Grouponers infamous non-tippers, but the employees had to bump regular clients -- who tipped, and purchased higher priced services -- to accommodate all the Groupons. Both say they'll never do it again. Clearly, the Groupon model is not going away anytime soon -- but let's hope it's readjusted so that it works as hard for businesses as it does for Groupon. [Gawker, Wall Street Journal]