What is group buying?
There are a few group buying websites operating in Australia. Websites including:
These sites, also referred to as ‘daily deals’ or ‘deal of the day’, sell vouchers or coupons for goods and services with big discounts. In some cases, the vouchers are offered on the condition that a minimum number of consumers take up the deal.
How does group buying work?
Many group buying websites work by negotiating deals with local businesses. These deals promise to promote the products and services, in exchange for discounts to help gain new customers. Consumers wanting to take up the offer enter their payment details online and a voucher is emailed to them to claim their purchase.
Other daily deals
Other daily deals websites offer discount deals on products (and sometimes services) for a limited time. This includes websites such as:
- Catch of the Day
- Shopping Square
- Deals Direct
- Crazy Sales
Stocks are limited and items often sell out before the offer ends. These daily deals differ from group buying deals as the customer receives a product or service, rather than a voucher.
Tip for small businesses considering group buying offers
Businesses thinking about offering such deals should consider:
- the potential demand
- if the business can deliver the goods and services as advertised and that the terms and conditions of sale are fair
- obtaining independent financial and legal advice
- new customers taking up the discount may not come back unless further deals are offered.
When things go wrong
If consumers have trouble redeeming the voucher or unreasonable delays in booking, they should contact the group buying website to seek a refund. Most of the major group buying and daily deals companies are parties to the industry's code of conduct. This means they should have a consumer complaints process.
For more information about the code, visit the Association for Data-driven Marketing and Advertising (ADMA).
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