I know of a second-run discount movie theater here in Tallahassee that used Groupon to boost their sales shortly before passing ownership of the business to a new company. Tallahassee Movies 8, located at 2810 Sharer Road, Tallahassee, FL 32312, (850) 671-8080, offered a discounted deal several months ago that included one movie ticket, a small box of popcorn, and a small drink for $8.00. Customers were allowed to purchase up to 3 of these Groupons. Since the movie theater already had the cheapest tickets in town, it seemed odd that they would offer even further discounts via the Groupon deal. My husband and I go to that movie theater occasionally, so I purchased two packages for us to use. We had a busy spring and weren’t able to get to the movies for a while, but, when we decided to take advantage of the offer a couple of months later, we were informed that the theater was under new management, and they were no longer honoring the Groupon deal. The ticket salesperson said the previous owners of the theater had known it was going to be taken over by a new company and were angry about it, so they had offered a bunch of discounts to customers towards the end, including the Groupon offer. We were instructed to contact Groupon to get our money refunded.

As for other points you made in the article, they reinforced many of the questions I have had about the Groupon business model. I tend to only buy Groupons for businesses I already frequent (or would be likely to frequent), so they really aren’t making much money off of me. I have taken note of a couple of the new businesses in town with which I was not familiar when I saw their Groupon (or Living Social) ads, and even visited one of these businesses since, but I did not buy deals for most of them. I guess a Groupon offer does generate some “free” advertising in the form of increased name recognition or awareness among Groupon users who do not purchase a deal, but I doubt that makes up for the lost revenue cost of doing business with Groupon. The few businesses for which I have purchased a Groupon where I was not already a customer are unlikely to see me as a serious repeat customer, either, since these purchases were generally occasional “splurges” to treat myself or my family to a special service or activity we might not have tried otherwise and are unlikely to take advantage of again soon.

Thank you for your informative and well-written article to alert businesses, customers, and potential stock investors of the risks built into the Groupon business plan.

Regards,
Sandra Wilton

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