Groupon Resellers Offer Cure for Buyer's Remorse

When deals-crazy consumers find themselves with too many spa coupons but too little time, they turn to Groupon-reselling sites DealsGoRound and CoupRecoup.

With deal-a-day sites like Groupon and Living Social, impulse purchases are the norm. But after a few massages or "sunset cocktail cruises," the inevitable buyer's remorse sets in.

Enter DealsGoRound and CoupRecoup, sites designed to be Craigslist-like marketplaces for groupons, a generic derivation of deals-pioneer Groupon.com used to describe online deals for services like spa days and restaurant visits. The notion behind the sites is the same: People rush into buying deals that seem too hot to miss, but their purchases end up sitting around unused until they expire. Now, instead of watching their spur-of-the-moment groupons fade away, consumers can turn into sellers in the second-hand groupon market. (Groupon CEO Andrew Mason had no comment when FastCompany.com asked what he thinks of these second-hand marketplace sites.)

The potential for success of groupon sites comes from the way the deals are presented. Groupons are limited in number and time: A new offer appears--and then disappears--on each deal site every day (the deals vary for different cities). The fact that these deals are for services--things that don’t exist--only adds to their mysterious appeal.

Like Groupon, DealsGoRound and CoupRecoup tap into the desire to save money on something you might not even know you wanted in the first place. Since these sites are second-hand markets, they can advertise double savings--the discount of the original groupon, plus the lower reselling value.

The sites also depend on people making impulsive decisions--and then regretting them. "It's more of a shopping experience than a must-act-now kind of thing," says Aren Sandersen, co-founder of CoupRecoup. His month-old site, started in San Francisco, now covers nine cities and draws about 50 to 100 posts a week.

DealsGoRound
In the fast-paced world of Internet businesses, DealsGoRound is a old-timer. Founder Kris Petersen launched the site in March after he bought groupons for a Segway tour of Chicago and didn't get a chance to use them. He wanted to create an "open market for buying and reselling" groupons. DealsGoRound is available in 53 cities, though availability doesn’t determine content; if no one posts deals in a city, no one can buy there either.

Both sites still depend on the founders' Internet influence for marketing. Petersen readily calls CoupRecoup a competitor, but reminds us that DealsGoRound hit the Internet first. "I think we're still the leader in this space," he says. The Chicago-based site is in 53 cities in the U.S., Canada, and London.

Sandersen focuses on anecdotes when describing how well his site is catching on. "I've actually had guy friends tell me that they've gone on there looking for good date ideas," he says. And his lady friends? Well, they use the site to find good massage deals.

The question remains: Are regretful impulse purchases enough to power an entire marketplace, or will these sites go the way of Petersen's overzealous Segway-tour purchase?

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3 Comments

  • OZ

    In Australia, a lot of vouchers only valid for one month, 3 months or 6 months, so it's difficult to just sell to one middle-man and wait till it got sold. we dont have enough time. OUr website http://swapyourdeals.com  is similar concept with couprecoup.  now has facilitated a few transactions since its launch.  Hope to see more coming

  • D S

    I do think there are enough resellers to power a marketplace for a few reasons. I imagine it's relatively inexpensive and low overhead to enter that space, though not sure the market could sustain many players. If you look at craigslist, there are already quite few sellers out there and anything that makes it easier for folks to get rid of their unused purchases is attractive to most folks. And if the deal seekers (like myself) think that's there's a place where they could potentially get things even a little cheaper than from the Groupon-type sites, I imagine it would attract may buyers. There are so many more Groupon copycat sites entering the market (and more buyers signing up every day), that I think this market will continue to grow at phenomenal rates the next few years. That's not to say that we won't see some consolidation or some sites go under, but the overall growth of the market is going to be astounding. LocalDealSites.com lists over 100 Groupon-like daily deal websites and let's you filter by city so you can see which sites have offers in your area. http://www.localdealsites.com/

  • Eran Davidov

    Great writeup Rachel. The daily deal ecosystem certainly seems to be evolving and generating more offerings for customers.

    I'm the co-founder of http://www.lifesta.com . My partner and I had a different approach to voucher trading than the sites you mentioned in the article. If you don't want the hassle of emailing back and forth, or if you need to buy a coupon for immediate use, Lifesta lets you upload the voucher and set the price, then forget about it until it's sold and you get notified and paid. For buyers - it's a simple process of paying through amazon payments and having instant access to the coupon.

    We did a number of things to reduce the risk to buyer and sellers: We guarantee the transaction, so if the buyer finds out the voucher they bought is invalid we give them their money back. We also reduce the risk for buyers and sellers by transferring the voucher automatically and immediately after payment was processed, so there's no question whether the buyer will actually get the voucher once they paid. As in any other marketplace, we will deal with sellers who post bad deals. We also show the number of deals each seller already sold, so people who are concerned can buy only from experienced sellers. Selling is hassle free and requires no communication between the buyer and the seller (so no "Can only meet downtown. cash only." as we've seen on Craigslist).