[annon]

Agreed. She should have constrained what it could be applied to so she could manage her losses. If I was going to embark on a Groupon campaign, I'd want to look at how much money I would lose per Groupon and then figure out how many Groupons I could afford to sell.

If you just open the floodgates without calculating how much you can afford to lose, it's not Groupons fault, it's your own. Even a layman should be able to understand that you're going to take a loss in the short term, so don't allow yourself to take a bigger loss than you can afford.

She even makes it clear in her facebook post that this is entirely her fault:

"...I hung up and thought it over. I called him back and said we would have to get at least 50% to cover our costs of product… to this day I don’t know why I thought even 50% would be a good deal for us. Maybe because I thought since we were covering our food costs. What I didn’t think clearly enough about was that that margin we mark up is what covers all of our other costs… like staff, rent, utilities, etc. Our overhead is roughly $25,000/month, and this decision was about to make it so that we didn’t cover any of those other costs."

[nathanwdavis]

Angie's List (my company) has created a similar group coupon system (The Big Deal) as Groupon, but targeted to a more niche market. We actually allow companies to set a hard limit on the number of coupons that can get sold. This allows businesses to offer really great deals that they expect may do negative revenue just to bring in new customers, but control the loss with the limit.

I'm surprised Groupon doesn't do this. Or do they and this business just didn't set a limit?

[adbachman]

They do not set a limit, or at least didn't in this case.

"When I talked to Lucinda today, she asked if there was a cap on how many were sold to help protect the business from too much loss, and the simple answer is, no. When you sign up for Groupon, you are agreeing to sell as many as get sold."

[Kadrith]

I thought the merchant was able to set a limit, if they choose to. Or am I wrong?

[e40]

Just went there to check out your website. I must say, it is very annoying that after clicking around for a few minutes I couldn't find the cost. That is, without giving you an email address.

[nathanwdavis]

Angie's List prices vary greatly by market, so we don't emphasize the cost too much to anonymous users. However they are available through the FAQ: http://www.angieslist.com/angieslist/visitor/faq.aspx#whypay

[enjo]

They do, at least for promotions I've seen through GroupOn. This business owner really shouldn't be in business.