Posts Tagged ‘Groupon’

Question: When is a 50% off sale not really a bargain?

Answer: When a company has jacked up their prices first.

In the days before the internet and smartphones that let you scan a bar code and get competitive prices instantly, it was common practice to jack up prices before putting them on sale. Customers who didn’t do their homework (and this kind of homework was much harder back then) would think they were getting a deal, when they really weren’t.

Even today, this practice is widespread enough that Bob’s Discount Furniture has cut a swath through the discount retail furniture business by offering everyday low prices and comparing themselves to the trumped up sale prices at their competitors.

But this latest scam by FTD combines 21st century tech with 20th century chicanery.

If you haven’t heard, FTD offered Groupon users a $20 Off Coupon for Valentines’s Day flowers. According to CNN Money, nearly 3,300 users signed up for the deal. Sounds good, right? Sure, except that it turns out that FTD sent these Groupon users to a separate landing page with prices that were higher than their regular prices. The high service and shipping charges depleted the savings further, so the claimed 50% off was virtually negated. And to add insult to injury, the flowers wouldn’t even be delivered until after Valentines Day.

Groupon cancelled the offer and FTD has already taken down the offending landing page.

Now I’m not a big fan of Groupon to begin with, at least from the marketing side of the equation. I’m sure there are bargains to be had for shoppers, but the jury is still out as to whether companies that use Groupon are making any money. There have been many successful Groupon campaigns, but the abrupt and often unmanageable influx of business, frequently by Groupon members who rarely if ever convert into loyal customers for the retailer, combined with the cost of the promotion and rev share with Groupon, often leads to failure. Some Groupon retailers are getting burned, like Posies Bakery & Cafe who blogged about their negative Groupon experience back in September. Or Gregg Gibbs, whose Chicago Bagel Authority netted $15,000 for $80,000 worth of food, according to this article in the Chicago Tribune.

But regardless of whether you like Groupon or not, FTD is the real culprit here. According to TechCrunch, the coupon only worked if you went through the Groupon link. Going to the regular FTD site landed you on a page where the $50 Groupon flowers were sold for $40. So FTD knew what they were doing. They deliberately increased the price shown to Groupon members. And they charged a service fee.

Can you imagine the marketing meeting where FTD discussed this plan? What were they thinking? Didn’t anybody at the meeting point out that if at any point anybody went to FTD via any path other than the Groupon link, they’d see a different, cheaper offer?

Can someone please explain to me why FTD thinks their customers are cyber-savvy enough to use Groupon, but too stupid to spend a couple of seconds clicking around to check out the actual value of the deal?