Are you considering signing up with a group buying website to sell vouchers for your business offering goods or services at a discount online? Or have you already signed up and have customers seeking to redeem their vouchers now? If so, there are some things you may wish to consider.
Websites offering discounts on goods or services where the consumer then receives a voucher to redeem with a retailer are otherwise known as voucher websites, coupon websites or group buying websites. Voucher websites may offer deals such as a hair colour, cut and blow-dry for a quarter of the usual cost or a meal for two with drinks, for less than half price.
Although there are some great opportunities to offer your goods or services at significantly reduced prices, before you sign up there are some things you should be aware of:
- Voucher website operators may encourage businesses to stretch themselves with the number of vouchers to be sold.
- Businesses need to prepare themselves for the number of people who actually seek to redeem the deal. Whilst there may be a false belief in the industry that up to 40% of buyers are unlikely use their voucher, many consumers will seek to redeem the deal and often soon after buying the voucher.
- There may be an increase in both general enquiries and actual customers. In extreme cases, an overload may affect the capacity of a business to stay operating.
- There may also be an increase in complaints where people may be unhappy with restrictions on the voucher.
Consumer Protection receives a lot of complaints from consumers about not being able to redeem the deal in a reasonable period of time or at the time a person wants to redeem the deal. Businesses should make sure any restrictions on using the voucher are clear in the terms and conditions information presented with the deal.
You may also like to check if the group buying website you are looking at signing up with has signed up to a voluntary Group Buying Code of Practice introduced November 2011.
The Small Business Development Corporation have also produced a business brief on group buying websites containing helpful information.
Information for consumers
Although there are some great opportunities to buy goods or services at significantly reduced prices, before consumers take up a low-price offer online there are some things people should be aware of when buying a voucher online, visit our Voucher websites page for consumers for more information.