There's a lot of hate out there for Groupon, some of it deserved, but this one is a bit of a stretch.
I mean, it would be another thing if Groupon was systematically defrauding smaller merchants, but I've not seen allegations to that effect.
Entrance into contracts by free individuals: legalize it.
So if Groupon stopped giving cash up front they shouldn't lose any customers they need, right?
That's not strong supporting evidence. Cash up front is one of the incentives that Groupon uses to acquire customers. Dropping it would certainly lose at least a few customers. They have a shit-ton of customers, doing many things would lose them customers. But it's not the core value proposition of Groupon.
Now if Groupon stopped advertising your business and discount to their enormous email list and only gave you cash advance in exchange for future revenue and they don't lose much business, then it starts looking more like what the OP claims.
The customers have long come and gone before GroupOn sends you a check.
The rest of this post is thus redundant.
According to their current merchant terms it's a payment after 30, plus every two weeks after that on any balance.
If they did, Groupon would actually not be in business right now. The amount it owes vendors exceeds its cash, but by the time it has to pay it has sold more Groupons. In other words, Groupon pays old liabilities with new ones (this is, obviously, a point of intense controversy).
http://www.businessinsider.com/groupon-low-on-cash-2011-8?op...
"...it collects cash from Groupons the moment it sells them and doesn't have to pay some of the cash to merchants until 60 days later..."
We did a text analysis of over 150,000 words of open-ended responses:
* Fewer than 2% of all these merchants even mentioned "cash upfront" as a benefit of running a deal. Not a single one mentioned it as a primary benefit/drawback.
* A few merchants did in fact complain that Groupon sometimes held on to the cash a little TOO long before funding their accounts
* FYI, the top stated benefits were "New Customers" and "Advertising Effect".
Groupon is in no way perfect, but its characterization as a check casher is pretty silly. I'm sure if you hunt hard enough, you can find an unhappy Groupon merchant and put words in their mouth.
Also, how would groupon even know what the check amount should be up front? I guess they have some history on how many deals they sell by type / geo at this point and could estimate, but it seems risky (on both sides).
Maybe groupon does advances for larger businesses or national brands, but I don't think they are the ones who would need to raise quick case.
The "argument" seems to be:
- payday loan companies are a liberal bugaboo that prey on consumers with limited options available for securing the cash they need to feed their children
- zomg our competition is like them somehow, except the prey are...companies with lots of flexibility in how (and whether) they market at any particular time
There is nothing sustainable about this model...but it works for me!
...ie, it would be very important and interesting if true, but it's 1) not true, and 2) trivially verifiable as not true.
Groupon works in the precise opposite way of how Womply claims they do; they provide payment to the vendors well AFTER the voucher is used, not BEFORE the voucher is used. Every single point and conclusion made by Womply is not just wrong, but describes a world precisely opposite to the one we actually inhabit.
I have never heard of Womply before, but apparently they're run by fools. At best they have no clue how their competition does business. More likely they do know, but assume that their customers don't, and feel no compunction about lying. Either way...
