The Living Social, Groupon Scam – A Warning to Deal Shoppers and Small Business

I generally don’t write about these types of issues, especially on my wellness blog, but I just couldn’t let this go. If the narrative get’s a little long-winded for you, PLEASE, do yourself and small business a favor and skip down to the last paragraph. And feel free to share. 


A consequences of being so totally invested, is that we’re willing to do about anything to generate new business. So, when the Living Socials and Groupons of the world come calling, in their predatory fashion, offering an over-night solution to all of our wants and needs, it’s no surprise that we bite.

The Groupon and/or Living Social Promise

I participated in both a Groupon and a Living Social deal shortly after I opened my practice, and why wouldn’t I? They portray themselves as your savior – promising a much-needed infusion of immediate cash, tremendous web exposure, and a rush of new patients that would, in turn, tell all of their friends. Soon after my deal would run, I’d ride off into the sunset a wealthy man and I’d owe it all to Living Social. Needless to say, that wasn’t quite the case.

The Reality

The cash infusion was minimal. The web exposure was extraordinarily short-lived, replaced by a similar wellness package that ran just two days after mine, but worst of all, was that there was absolutely no brand loyalty among the patrons. My practice is an affluent area of St. Louis, home to the financial district. It’s full of high-end salons, brand-name boutiques, and fine dining. To keep up, I offered a variety of aesthetic procedures to fit the clientele. It was one of these such procedures that was the subject of my Living Social deal. I won’t get into the numbers, but let’s say I made a whole $13 per procedure, which I had agreed to split with my aestheticians. I won’t even mention the fact that many of the deal shopper purchased additional deals as “gifts” but insisted upon keeping them to themselves and leaving me to police them, which I seldom did. Most of the purchasers did not live anywhere near the Clayton area, but because of it’s affluent reputation, they were willing to make the drive if the price was right. All of this unbeknownst to me at the time, I greeted every patron with a handshake and smile, but it soon became apparent that they had no intention of returning. Many didn’t even bother to fill out the new client/patient paperwork and an unfortunate majority chose not to even tip my aestheticians. It didn’t take long to realize this had been a mistake, but spoken like a true small businessmen, we don’t know what we don’t know.

The time and resources spent to accommodate my Living Social customers was extraordinary. One of my aestheticians quit because I couldn’t make it lucrative enough for her as there were no tips. Often, our returning customers had to wait over a week to get scheduled as the chair was full of Living Social shoppers, which meant lost revenue. What little cash infusion there was had to be allocated towards product and upkeep of the machine. So as you can see, things could not have gone worse. But again, we don’t know what we don’t know. The worst came about a year later when all of the unused coupons were nearing expiration.  Of the 130 “deals” that were purchased, about ⅓ waited until the last week to call, or called after the coupon had already expired. I did my best to accommodate those that called prior to the deadline, but I refused to service those that called after: some even 6-8 months post expiration. Of course this made me the bad guy for not honoring their coupon and I often heard about it via social media. Lovely!

Fool Me Once, Shame on You – Fool Me Twice…

I was foolish enough to try something similar with Groupon, but the results were the same. I ran a deal on a different procedure that required only my presence rather than that of staff in an effort to keep costs down, but again, it resulted in little long-term revenue or returning patients. I swore never to succumb to the empty promises of any such industry with zero ongoing material interest in my company – Until I got a phone call from a Living Social rep about a month ago. His name was Joe and like the reps before him, Joe really wanted to assist me in my mission to spread health and wellness to those in my community. Under different circumstances I would’ve told Joe where to go, but I’d recently published a book on a particular weight-loss plan I’d been working with and I was looking to get some exposure. I told Joe what I was willing to offer and he said he’d go to bat for me, and in defense of Joe, I believe he did. The deal I proposed offered no in-office consultation or treatment. It was simply a mail-order deal for my book and the accompanying weight loss supplement that goes with it. Joe understood and said he’d be in touch.

A Call from the Boss

About a week later I got a call from Joe and his manager. I don’t remember her name, because it was lost in the immediate bombardment of what Living Social had to offer me and my community. For the sake of simplicity, we’ll call her Linda.  I’m guessing Linda was maybe in her late 20s possibly early 30s, but yet she had an overwhelming amount of experience in advertising, marketing, e-commerce, SEO, SEM and everything necessary to make my business successful. She was also an expert in the health and wellness industry, particularly as it related to weight-loss. How fortunate for me. She “really liked” the offer that Joe and I put together, BUT… wait for it… WE needed to “sweeten the deal.” We? I thought to myself. I was already over it at this point, but I really wanted to see how naive Linda took us small businessmen to be and how she would spin this to make it more self-serving to her own needs and that of Living Social.

“What do you have in mind,” I asked. Rather than simply answering my question, she again began to lecture me on the wants and needs of my patients. After another 4 to 5 minute soliloquy, my interest fading, I again asked, “what do you have in mind?” She finally replied with that which I had already known, “You need to offer an in-office consultation. This is for your own benefit, of course, so you can get some ‘face-time’ with each and every potential patient.”

The Confrontation


What the Consumer Wants…

I explained to her that my book in conjunction with my supplement were completely different than phentermine injections. MY weight-loss protocol actually involved a reduction in calories and encouraged lean protein and vegetables, and wasn’t merely drug-induced behavior modification consisting of nothing more than an amphetamine-based diuretic. “Well this is where the market is,” she said. “This is what people want.” Linda was obviously out of touch with the wellness industry, so, for some still unknown reason, I felt it my obligation to educate her. Doing my best to keep calm, I politely told her that most people actually don’t want a miracle pill for weight loss, nor does such a pill exist. They may not always be fully aware of it, but people want to put time and effort into their health so that they may experience the full reward of both feeling and looking their best, and that this dialogue should be the ad content used to entice them. But of course, who am I to lecture Linda, Executive VP  to the VP of Sales, Advertising and all of the above!!? Again she’s talking and again I (less politely this time) disagree.  I further explained that I have no interest in selling my book to, by her own definition, the “Living Social market” that is under the unfortunate assumption that phentermine is a realistic weight-loss solution as any fool that believes this will have zero success on my diet, nor even take the time to read my book.

I’m Not F@#king Interested!!!

Presuming the conversation over, I lowered the phone from my ear to press end, but apparently these Living Social folk are not accustomed to being told no, because she continued talking… and talking and talking. “I’m not interested in any sort of in-office consultation,” I repeated. More talk. “Not interested,” I said. More talk. “I’m not f@#king interested,” at which point the insults began to fly. No name calling, she is now not only telling me how to run the business side of my business, but she’s also telling how to run the patient side of my business; this is where I came unglued! Before she could finish telling me how completely out of touch I am with my clientele and how all my marketing and advertising efforts will certainly fail without the saving grace of Living Social – I, quite loudly this time, countered back with the obvious, “Living Social only cares about Living Social! And if you don’t start listening more and talking less, you and Joe will be out of a job.” This certainly didn’t sit well, especially because it was scattered with F-bombs, so she fired back, but I had already hung up.

I’m embarrassed to say it, but I really let this aggravate me. To be quite frank, I was pissed off. The only people that make any money on these deals are the Living Socials and the Groupons. They rob us of our time, our resources, and our profits, while leaving us to take all the risk. But that’s not the worst of it. The worst is that they’ve created a culture of bargain shoppers, surfing the web for the next awesome deal at the expense of small business.

Help Yourself and Small Business…

If you’re a frequent purchaser of Groupon or Living Social deals, and again let me say that there is nothing nefarious about this, nor should you carry a guilty conscience for trying to save a buck, but before you enter your payment information, consider calling the salon or restaurant that is providing the deal. Ask them if you can pay them directly for whatever the advertised deal may be  in exchange for a gift certificate of equal or possibly even greater value. I assure you, they’ll gladly accept as all of their proceeds will remain in their coffers. While you’re on the phone with them, introduce yourself. Ask them when would be a good time to schedule your procedure. Or, when is the best night to make a reservation. Let them know how excited you are to patronize their establishment as a primary consumer rather than a secondary deal shopper. Not only does this help small business, but it helps you. It’s not easy to be discreet about waiving your phone or coupon in the face of your server when the bill comes. I don’t care if it’s your first date or your 50th, you look like an amateur. Trust me, I’m a recovering deal shopper. There’s a better way!


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