Sometimes, the daily deals offered by Groupon and Living Social seem like a regular feast of too-good-to-be-true discounts. And according to a recent study by Thumbtack, in many cases they might be.
Thumbtack ran a price check on several local service deals, to find out from the merchants themselves how much the service would cost a customer without the group-buying discount. It turns out, a majority of the actual values for these offers were much lower than the "retail" prices advertised by Groupon and Living Social. Thumbtack thus posits that the deals on these sites offer less bang for your buck, with deals less thrifty than they appear.
In September 2011, Thumbtack investigated a $49 home cleaning service deal advertised on Groupon — a bargain at more than half-off the stated retail value of $150. However, after calling the merchant, Thumbtack researchers discovered that the real value of the 2-hour home cleaning was just $80 — a full 47% less than Groupon's listed retail price.
So instead, Groupon's deal for the service was just 39% off — rather than the site's stated 67% off. For some folks the perceived value of a deal is inextricably linked to the services offered. But for many others, a deal is all about savings. The difference between Groupon's "advertised retail value" of $150 and the merchant's "actual retail price" of $80 is $70.
It should be noted that the local stores themselves may be the cause of the discrepancy, as PCWorld speculates. But the fact remains that value manipulation exists. Does this effect whether you will buy from Groupon or Living Social? Does the news of potentially inflated discounts bother or surprise you? [Thumbtack]
Front page photo credit: ToMuse.com