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'Group coupons' grow with the Web

September 08, 2009|Nancy Trejos | Trejos writes for the Washington Post.

WASHINGTON — Katie Temme lost her job as a television producer recently, but that didn't keep her from buying herself a bouquet the other day.

She wouldn't have done it had she not found a coupon through What's the Deal DC, a website that persuades merchants to offer discounts by guaranteeing a certain number of customers.

Temme got $20 worth of flowers for just $10 at A Little Shop of Flowers near the nation's capital.

"I lost my job a few months ago, so this is kind of up my alley," she said.

The recession has bred a new type of coupon: the group coupon. In recent months, several websites have launched, offering discounts on restaurant meals, sporting events, spa treatments, golf outings -- expenditures that people give up during economic downturns. The catch is that the coupon applies only if a certain number of people use it.

Since its launch more than a month ago, What's the Deal DC has drawn 1,500 customers.

Groupon, which started in Chicago in November and has spread to 13 cities including Los Angeles, San Diego and San Francisco, has 50,000 subscribers in Washington alone.

Last week, LivingSocial, the social media developer behind the Facebook application Visual Bookshelf, said it was expanding its group coupon program to New York.

It's really kind of a win-win all around, said Tim O'Shaughnessy, chief executive and co-founder of LivingSocial. "From our perspective it seems to be a real paradigm shift in the amount people are saving, and their behaviors and habits are shifting a bit. People are more cognizant in wanting to take part in a deal."

Some coupon critics and financial advisors caution against coupons, however.

"A consumer who is not discerning about these things can certainly buy an item he doesn't need," said Matthew Tilley, co-chairman of the Promotion Marketing Assn.'s Coupon Council.

But prudent consumers could end up enjoying an "affordable luxury," he said.

LivingSocial and others like it take commissions from the merchants.

But Bharet Malhotra, co-owner of restaurant Co Co. Sala in downtown Washington, said he didn't mind when he agreed to have LivingSocial offer $50 worth of food for $25. In just one day, about 100 people signed up.

"People want to go out. They want to be somewhat selective, and they're getting name brands," he said.

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