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Today on WMFE: Group Buying and Daily Deal Sites

Written By Scott Joseph On July 29, 2011

wmfe_logo_blueOn this week’s WMFE segment I speak with 90.7’s Judith Smelser about the daily deal craze.

To say that there is a proliferation of daily deal sites would be an understatement. What started with Groupon and LivingSocial has exploded exponentially There now are dozens of sites dedicated to selling you discounts to all sorts of services and products. Why, even a restaurant critic I know of offers half-price deals to Central Florida restaurants. In the case of the daily dealers, it’s a mad dash to procure an agreement with any business they possibly can.

And therein lie some of the fallbacks of these sites. With so many of them constantly barraging businesses to sign up for their site, the owners are growing weary. Some see it as a handy way to make some quick money and possibly draw new customers in. Others see a potential to damage the brand or the image of the restaurant by looking too needy for customers. Indeed, because most of the sites will take any business willing to sign an agreement, there’s little vetting of the restaurant’s merits. And a good restaurant, with full service, white tablecloths and the whole nine yards with a strong reputation may find itself sandwiched in between a taco stand’s offer one day and a flea dip for your dog on the next. It’s easy to see a sense of desperation in someone who would put his brand out there like that.

But the buyers love them. The deals, that is. Whether they love the restaurants is another question. From talking to owners who have participated in some of the daily deal sites, I’ve found that the average person who buys on one of those sites snatches up the deal, heads to the restaurant, carefully calculates what can be purchased without going over the face value of the certificate, then they tip poorly and never go back — they simply move on to the next restaurant.

When I implemented SJO Dining Deals I wanted to present only restaurants I felt I could heartily recommend to my readers, readers who  tend to be restaurant savvy and who enjoy going out and discovering new restaurants, or retrying an old one. These are the folks who will have the bottle of wine or the extra appetizer because they’re already getting a good deal on the bottom line. And, they know that it is customary to tip of the full amount before the discount is taken. (They know because I constantly remind them.)

So I don’t offer daily deals. I shoot for once a week but sometimes I’ll go two or three weeks without a deal I can offer. And there have been times that a restaurant has approached me to ask about participating and I’ve had to tactfully tell them they don’t currently meet my standards. I’ve had another restaurant that meets my standards for food and service quality, but I happen to know said restaurant is filing for bankruptcy. I didn’t want my readers to help them raise some ready cash only to be met with the prospect that the restaurant will close before they can redeem the deal.

But when a good restaurant participates and attracts an appreciative buyer, it can be a win-win-win situation. The buyer gets a terrific deal, the restaurant gets the business, perhaps able to sell the customer a little more. And I get something for brokering the deal.

Some things you should consider before buying a deal. Is it a place you want to go to, or are you just looking for a bargain? If it’s the latter you could be setting yourself up for a disappointment. Be aware of expiration dates and blackout dates. The expiration date is a point of contention because, as interpreted by many, including me, these types of transactions are prohibited by law from displaying one. This goes back to the gift card debacle from a few years ago where banks were selling Visa and American Express gift cards that expired after time. The legislature ruled that that could no longer be the practice. And it has been interpreted that these deals fall into that same category because money is put into them, they have value. Groupon is currently being sued in Illinois over this very issue.

My SJO Dining Deals, it should be mentioned, do not have an expiration date. Which is not to say they shouldn’t be used with diligence. The longer you wait, the better the chance that you’ll forget about it or misplace it. And, especially in these times, a restaurant that looks financially fit could very well close at any time.

I like keeping my Deals exclusive and special, but I know even the restaurants I partner with are getting hit constantly to sign with the dozens of other dealers. This is bound to come to a head. And when the economy finally improves — it will, won’t it? — restaurants will no longer see the need to discount their meals any more.

You may still be able to get a cheap flea dip for your dog, but don’t count on it.

By the way, recipients of my newsletter are the first to hear about new Deals (they’re also in the pool of names I draw from to give away free gift certificates to really good restaurants). If you’re not already signed up, click here.

I’ll be on the air with Judith Smelser Friday at 5:45 p.m. and again Saturday morning at 9:35. I might as well just stretch out on a cot there overnight. And hey, if you’re not going to be near a radio at those times, you can listen to it here.


We hope you find our reviews and news articles useful and entertaining. It has always been our goal to assist you in making informed decisions when spending your dining dollars. If we’ve helped you in any way, please consider making a contribution to help us continue our journalism. Thank you.

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