How to get the best deals at online sites like Groupon

Bargain hunters already know that the Internet is a great place to find low prices on merchandise. Now a rapidly growing array of Web sites is offering savings of 50% to 90% on services and experiences, such as restaurant meals, spa visits, carpet cleaning, dry cleaning, movie and theater tickets, haircuts, gym memberships, yoga classes and dance lessons.

These “local deal” or “deal-of-the-day” sites, such as Groupon.com and Restaurant.com, negotiate special group rates with area eateries and service providers, then sell vouchers to the public that work much like gift certificates — except that you buy them at steep discounts to their face value. Local businesses agree to offer these deep discounts to attract large numbers of new customers who, they hope, will come back and pay full price in the future.

Examples: A $25 voucher to a local restaurant might cost $10 or even $2… a voucher good for a series of yoga classes that normally would cost $250 might cost as little as $25.

Consumers use a credit card to pay online for the voucher, print the voucher at home, then bring it to the local business to redeem it. With many of these sites, each deal is available for just one day. The vouchers need not be used that same day, however — most don’t expire for months. On some sites, deals take effect only if a certain number of users purchase the voucher. If not, the deal is voided and no one is charged.

The widest range of offers is available to those who live in or near major cities, but some of these Web sites serve smaller cities and suburban regions, too, and others plan to soon expand into them.

Helpful: You also might want to sign up for discounts in a city that you plan to visit.

Here’s a look at the sites worth trying, how they work and how to sidestep the traps that can turn seemingly great deals into money losers…

WHERE TO FIND DISCOUNTS

Among the sites that offer the most attractive deals and cover the largest number of regions…

Groupon.com is the largest of these sites, available in more than 500 local areas worldwide. Sign up to receive daily deal e-mails. Most Groupon.com deals offer 50% to 90% off at a restaurant or spa or for some leisure activity. Each deal is available for just one day, and the offers take effect only if a predetermined minimum number of users sign up. If not enough people sign up, your credit card is not charged. Recent example: $22 for two pottery classes that usually cost $45.

LivingSocial.com is in 182 areas worldwide and works much the same way as Groupon.com. Discounts typically are 50% to 90%… restaurants, spas and theaters are among the businesses most often featured… and each deal is available for purchase for just one day. Unlike with Groupon, however, there’s no sign-up tipping point — if you want to purchase a voucher, you can, regardless of how many other LivingSocial users sign up. And LivingSocial provides an added savings twist. If you can convince three other people to purchase the same deal, you will receive your voucher for free. Recent example: $9 for two movie tickets that usually cost $20 or more.

BuyWithMe.com is not yet in as many regions as Groupon or LivingSocial, but each of its deals is available for seven days, not just one — so there is far less pressure for you to make a quick decision. Recent example: $35 for hair styling at a salon that normally charges $75.

Restaurant.com offers discounted vouchers for more than 18,000 restaurants nationwide. Enter your zip code, and Restaurant.com will locate any offers in your area. Unlike the previously listed sites, Restaurant.com offers typically are available for extended periods, not just a single day or week. Many Restaurant.com vouchers impose restrictions on how and which days of the week they can be used, so read the fine print. The site often e-mails offers of extra discounts off its usual discounts to people who register. Recent examples: Many local restaurants offer $25 vouchers for $10 or less… or $100 vouchers for $40 or less through Restaurant.com. Those fees may be discounted by an extra 80% from time to time, so you actually can pay just $2 for a $25 meal.

AGGREGATOR SITES HELP

There are other, smaller sites that offer attractive deals in certain areas, and new local deals sites debut all the time. Rather than trying to monitor them all, consider using a “deals aggregator” site, which monitors the individual sites and consolidates their current offers into a single list or map.

Examples of aggregator sites: DealNews.com (click the “Local” tab)… DealRadar.com8Coupons.com… and Yipit.com.

Not all aggregator sites cover every geographic area or every deal site, and each reports local deals in a different fashion. Try several before settling on the one that does the best job helping you find deals that you like. Aggregator sites typically feature only short-term deals, not those available for extended periods, such as the ones offered by Restaurant.com.

BEWARE DRAWBACKS

A big discount does not necessarily mean that something is a great deal. If you’re not familiar with the business that is offering the discount, look for reviews from other customers on sites such as Yelp.com or CitySearch.com — or Chowhound.com just for restaurants — or ask friends their opinions.

Other issues that can make a seemingly great deal a bad money move…

Small businesses can be overwhelmed when a flood of customers signs up for these discounts, causing a temporary decline in quality. It makes some sense to wait a week or two for the crowds to diminish before redeeming a voucher offered by a smaller business.

Unused vouchers are money wasted. Keep your vouchers well-organized, and note their expiration dates on your calendar. Do not buy a voucher just because it seems like too good of a deal to pass up — buy it only if you are certain that you will use it.

Helpful: You may be able to resell your voucher — if you realize that you won’t use it — on Lifesta.com, a daily deals marketplace site. A voucher generally is transferable unless it specifically says otherwise. There is no cost to post a voucher for sale, but Lifesta takes 99 cents plus 8% of the sale price if you find a buyer. It also is a good place to buy daily deals that you missed when they initially were offered.

You often cannot redeem vouchers the same day. Most sites won’t let you print out your voucher until a certain number of people sign up for it or until the day after it is purchased. Exception: Restaurant.com vouchers generally can be printed and used the same day.

There can be important caveats hidden in the small print. Some vouchers cannot be used on the most popular days of the week. Others have high minimum-purchase requirements or other rules. Example: A restaurant voucher might be valid only Monday through Thursday.

Helpful: If there is a problem with any of the discounts, contact the specific Web site by e-mail or toll-free number.

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