1 in 10 Groupon Deals Don't Save You Money

by Knowlton Thomas

A new study by Thumtack suggests that 11% of Groupon "deals" aren't actually deals.

How so? Thumbtack says that daily deals for local services—such as painting, wedding planning, house cleaning, etc.—don't save you money, and these deals make up more than 1 in 10 Groupons.

Thumbtack is a directory of such services so it knows as well as anyone how much professionals charge for their services. Looking at 50 different service providers and their respective rates resulted in a standard of about $23.50 per hour—nearly half of the surveyed professionals charge this amount by default. The lowest bid was $17.50.

Then Thumbtack compared this data to Groupon numbers, and found that most professional services—with the 50%-plus discount—wind up costing $25 an hour or more. It appears that they just jack their "standard" or original rate up double, then cut it half (back down to the real normal rate) to give the illusion of a deal. You can imagine this is much easier to do than with retail products or restaurant meals and also more difficult for consumers to research.

Below are a couple of American samples pulled by RWW:

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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes and author of Tempest Bound. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys hiking, tennis, and martial arts. more

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