Groupon specifically says in their S-1 that they do nothing to stop such cheating.
Given that they are being valued based on subscribers and revenue, it's in their interests not to stop cheating. If you want to create 100 accounts, you're helping them sell this turd of an offering to the public.
i emailed with brian and they are paying all of these out of pocket, even going forward. no insurance company involved. now that opens up a whole other can of worms...
Those are compilations of actual deals offered by the merchant, not stuff that was made up by others deciding what sort of discount a merchant might offer.
That negotiation happens in private and some businesses might be willing to entertain that.
The fact that this happens in the open has significant potential to devalue the brand.
Under very specific conditions, I will do free or discounted consulting. But I don't want "free" or $25/hour associated with my brand when someone does a Google search.
Associating discounts with businesses who haven't agreed to them is problematic for me.
Many manufacturers have MAP guidelines so that they don't get to be perceived as bargain basement providers. Some (e.g. Bose) also require that their products be excluded from all storewide discounts.
They have high affinity and a premium value and want to protect that.
Sam claimed that they posted what they think is a reasonable discount. That's not for him to decide. If I'm as popular as Bi-Rite, I don't consider 33% a reasonable discount for my product.
I'm well aware of the Priceline model. I've booked hundreds of room nights using Priceline -- in fact, I'm staying at a hotel I Pricelined right now.
The difference between Priceline and what you're doing is that Priceline has already established relationships with hotels. They have the ability to fill demand that meets certain criteria.
You don't have the ability to fill demand for the product you're advertising. Now, if Loopt were willing to pay the difference out of its own pockets (as some daily deal vendors do), that's another story.
Even then, you've got a trademark infringement issue.
Publishing results in:
- Loopt getting subscribers to its list. That seems like a benefit to me.
- Merchant getting perceived as a discount brand. For many merchants, that's a negative.
- Merchant having to deal with customer inquiries about a deal they know nothing about. That's a negative.
It should also be noted that Loopt picked really high profile businesses like Bi-Rite and Ritual Coffee. These places usually have lines and don't have much need to run large discounts.
If Loopt had picked obscure businesses, it would make it easier to claim they weren't trying to benefit from the business's good name.
I always separate the person from the model. My criticism is of the model and the actions. The headline was to make a point as to how absurd what Loopt did is.
I have never met you, so I have no opinion on you. I know people who know you and they've said good things in the past.
Merely publishing these deals enriches Loopt at the expense of the business -- even if none of them take it.
Loopt is building a mailing list of people using the business's brand name and causing customer service issues for them.
I've forward to this to some friends in the payments space. This might be considered credit card fraud because they are also taking people's credit card numbers in conjunction with a service they can't commit to delivering.
Author here: That definitely would've saved me some time!
But doing it this way also gave me insight into how quickly/much Google was indexing. I didn't do a full test on bing, but some spotchecking indicated that Google was picking up the news coverage much faster.