[golergka]

I haven't followed Groupon closely, so it might have already been addressed, but a couple of years ago I heard a very curious criticism of the company: Groupon holds money that goes from customers to vendors for quite some time (from the time customer prepays to the time the deal is over and Groupon handles over the cash minus commission to the vendor), and this other people's money sitting in Groupon's bank account makes the company quite a profit. I'm not sure what kind of accounting magic is involved, but it seems like a believable scheme.

Is there truth in this allegation?

[jon-wood]

It's not quite so awful, but Groupon don't immediately pay out - they sell the coupons, and as customers redeem them they'll pay out a week a so later (I can't remember the exact period), so if you're a cash business that could hurt. The company I was at when we tried it do all payments online, so we were used to a waiting period from our payment processor.

The other place they can potentially make a ton of money is people who buy a coupon but never redeem it. In that case the supplier never sees any of the money, Groupon keep the lot effectively making 100% commission.