Groupon, InBundles, VillageVines, BlackboardEats, Dealon, Yelp, Restaurant.com and all the other coupons and offers on the market have never been so popular but what are the implications for restaurants?
And it looks like some sites are prospering. Groupon rejected a $6 billion offer from Google and has its sights on an initial public offering that could value the company at nearly $25 billion.
This may appear optimistic but read what a local Restaurant Owner has to say:
Dear Valued Patrons,
I regret to inform you, but due to recent events, Neely's Restaurant will no longer be accepting the coupons from Restaurant.com (RDC). However, RDC is refusing to allow me to opt-out of the program. Neely's has been a member for nearly five years, and was always pleased with the partnership with RDC until recently. When I started taking the coupons RDC's policy was that they were limiting the purchase of the coupons to one a day, customers could only use one per month, and they expired after a year. I recently noticed a large quantity of the coupons coming into the restaurant with some costumers using the coupons more than once a month. After a phone call to RDC I learned that someone at RDC took it upon themselves to up the limit to 90 coupons a month (you do the math), and the coupons being sold today never expire. With the recent price increases in the cost of my goods and utilities the coupons have become a drain on the business financially.
I contacted RDC to suspend my account and cancel sell of the coupons. RDC informed me that I couldn't just cancel that I had to send a letter and the process would take 90 days in which they would continue the sell of the coupon. Now, when I called, I figured that having been a partner with them for so long they would say O.K., stop selling the coupons, and welcome me with open arms "IF" I ever wanted to rejoin the program in the future. WRONG! RDC proceeded to inform me that I was contractually obligated to abide by the terms of their contract "that they have failed to produce." So RDC wants to sell coupons to my business pumping them into the marketplace for another 90 days. They collect and keep the money that the restaurant "never" sees. This is forcing me to give away food that is getting harder and harder to afford with the amount of coupons they are selling.
I have taken it upon myself to contact and warn hundreds of previous customers that have enjoyed the benefit of our partnership. However, after reading the reviews online, I found that I am not alone with having problems with RDC. I found others in the same boat. I read blogs of other businesses getting the coupons having never signed up for the program, RDC selling coupons to places that were closed, and many businesses that tried to do the 90 day opt-out agreement found themselves 6-8 months later still having the coupons sold by RDC. One business found that once they submitted the letter they were unable to verify coupons over the phone, and were not allowed to visit their account in the management center. After reading the blogs and hearing everyone else's troubles, I refuse to fall prey and have my valued patrons fall prey to the gimmicks of RDC. I would suggest that in the future before any of you purchase a coupon for a particular restaurant that you make a call to that restaurant making sure they accept RDC coupons, and be clear on their stipulations of acceptance. I see why now the major chains do not participate, and why only four restaurants in Covington, Ga. are enlisted.
Whether or not you think I am right or wrong in this situation, I feel that you being the one spending your hard earned money have a right to know the reasons for Neely's opting out of the program.
Thanks, and Neely's looks forward to having you dine with us in the future.
Dear Valued Patron,
I was very pleased to receive the amount of comments and questions in reply to the notice I sent of Neely's recent misfortunes with RDC. Not only did the replies inform me more on how RDC was selling the coupons, but also they gave me an idea of how many were still circulating. I recently learned the coupons were available in batches, but was also discounted to a low price to push the sell of those batches. Other companies and corporate retail chains purchase large batches and peddle them off to sweeten the pot to push the sale of their merchandise. No wonder the restaurant has been getting a lot right at Christmas time. Also, your choices are limited to only five participants in Covington. It pains me to say, there is only one option for me to pursue. Unfortunately, I have to stop taking the coupons immediately. I know some of you only have one and some have a dozen, but with now knowing so many are still out the restaurant just can not afford it financially. It is hard to justify asking the power company for another week while giving $500 + in sales away every week.
However, for those of you that still have coupons, the only thing you are out is your time and a chance to eat Neely's. All you have to do is contact the RDC customer care center, and someone there will allow you to pick another establishment that is part of "their" program. You can explain to them that I refuse to take the coupons, and if you would like maybe why. However, they should know by now.
Each and everyone of you should know that I sent this notice out to about 300 customers who had used the coupons the previous year, and I received nearly 70 replies. Out of "ALL" the replies, not "ONE" of you had a negative response to my situation. The amount of encouragement and understanding has deeply moved me in a positive way. It is truly a honor to have such loyal patrons keeping the traditions of this family's business afloat in these economic hard times. Not only is it emotionally touching for me, but my grandparents that started this many years ago would be honored as well.
Thanks, and looking forward to having you back in the future!
The bubble has already burst, the idea that this concept will bring a small business more customers is true, but in this economy most people are only looking for great deals, which in turn will KILL all Mom and Pop Businesses that are not financially stable.
Small businesses will not make any money, they will not see any cash flow from these type of customers and they will go under!
Support your local Mom & Pop businesses by not supporting these COUPON & DISCOUNT GIANTS, they are only hurting the small man!