60 second guide to group-buying websitesOur quick guide to what group-buying sites offer
23 August 2011
Despite offering some great deals, we also found some problems with sites like Groupon.
Group-buying sites are the latest phenomenon to take the internet by storm. We look behind the discounts to see what they do and don’t do, and what your rights are.
What are group-buying sites?
Group-buying sites like Groupon, LivingSocial, Kgb Deals and Incahoot offer incredibly cheap deals, and are understandably very popular. The secret to their success is a canny combination of significant discounts - often anywhere from 50% to 75% off the full price - and people power, whereby some of the deals only get 'activated' when enough people sign up.
They all work differently, but most deals are only available for a limited time frame, typically one day only, giving the impression that the clock is ticking to secure your deal. A number of the deals have a limited number of people who can purchase them.
What are the main ones?
The biggest group-buying site is Groupon. Forbes recently named Groupon the fastest-growing internet company. When we surveyed more than 1,000 people on Which? Conversation, we found that 35% had used group-buying sites. Other popular sites are Crowdity, Living Social, KGB Deals, Kelkoo Select, Keynoir, and Wahanda.
What do they offer?
The great thing about group-buying sites is that they offer a bit of everything, from fish pedicures and laser teeth whitening to falconry and ultrasound weight-management. However, the most common kinds of offers are restaurant and hotel deals, cosmetic treatments and experiences or days out. You can compare what the sites have to offer in our online guide.
What are your rights when things go wrong?
All the companies we looked at operate as ‘third-party agents’, which means that the responsibility for the quality of the product is at the suppliers' discretion. As these kinds of transactions are a developing area of consumer law, if anything goes wrong and you paid by credit card, you may not be able to claim a refund from your credit card company using Section 75 protection, so don’t rely on it.
Are they as good as they sound?
Group-buying sites generally have incredibly cheap deals and the discounts we found were the best available for those products, although sometimes the discount seemed exaggerated or there were additional costs. The key is to do your research before you buy - easier said than done when there’s a ticking clock and a limit on the deals available.
Always check the retailer’s own website and look for customer reviews before buying. Some deals are also better than others. Be wary of estimated savings on hotels and restaurants, and always look into the availability of services first, particularly if you’re buying them as a gift. For products, check online retailers for similar deals that you won’t be rushed into.
Check out the 'Bills and Budgeting' section of our site for information on alternative ways of saving money, such as cashback and voucher sites.
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