The I-Team investigates Groupon, the Internet coupon site that provides tremendous deals, which sometimes come with a price.
The I-Team began its investigation with livingsocial.com. For $28 we bought a voucher for a museum quality canvas. We got our living social code, went to the company's website and, within weeks, we had a canvas worth nearly $60 for half the price.
It was delivered quickly. There was an added shipping charge of $10, but that came as no surprise because it was stated on the deal before we bought it.
Next, we tried out a haircut. For $27, our intern Maggie purchased a Groupon for a haircut and partial highlights at Tesoura Salon in Glastonbury. The total value was $55. Maggie saved $28, and was very satisfied with the service.
Tanya Santos, the owner of Tesoura Salon said it was the first time she had done a Groupon sale, and it likely won't be the salon's last.
"I think this is a great thing. It's also another way to get our name out there. We got 182 people who purchased the Groupon within the three days that they did it. We have a six-month expiration date, and we've been filling up," Santos said.
While Santos is having great Groupon results, one concern on the business end is getting Groupon users to come back.
A recent study found customers taking advantage of the deals, while Groupon offers can put a retailer's reputation at risk .
We spoke with Bill Field of the Mintz and Hoke advertising agency, who said the key to Groupon is finding customers a business doesn't normally have.
"You're going to get your brand in front of a lot of people. You are going to do it very quickly and cost effectively, so you're reaching people you don't normally have, " Field said.
With the holidays just days and weeks away, we figured we'd benefit from a house cleaning, which is why we called Meriden-based Maid Service. For $50, you get two hours of house cleaning that typically costs $100. We paid for the deal in late September, and then started calling.
Maggie called and emailed the company about a half dozen times. When it finally did get back to her, she was told the company sold so many deals - more than 600 of them - that it would be January before they could get to her cleaning.
It's great business for Maid Service, but not so great if you wanted a clean home for the holidays.
The I-Team followed up again a few days later, and was told they were "overwhelmed" at the Groupon response.
Field said many times the Groupon system will explode, and retailers aren't ready for it.
"It can backfire, because in other words, they'll get overloaded. They don't have the resources to support it. They'll alienate rather than open arms to a customer, " Field said.
The I-Team tried a Groupon offer at Hartford Road Pizza. For $10 customers get $20 worth of food.
Gregg Proccaccini, the owner of Hartford Road, said the Groupon deal has benefited his business.
"So long as they come back, and getting new customers is what it's all about," he said. "We sold 450 of them and I've had 275 already come in. People have been coming up to us and saying it's our first time here, then afterwards, saying we'll be back, and that's what you need."
The I-Team also bought a Groupon for the Stonewell Restaurant in Farmington. We got a 52 percent discount on a $60 dinner, dubbed the Steakhouse Meal, which included an appetizer and two entrees. The service was stellar, but a manager we spoke with was reluctant to offer the Groupon deal again, unsure if the restaurant will see much profit in the end.
Copyright 2011 WFSB. All rights reserved.
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