Groupon, LivingSocial and More Online Coupons: 7 Tips to Save Money

Last Updated Aug 26, 2010 11:01 AM EDT

More and more, getting the best deal in town is thanks to the power of community. With the lightning-speed growth of social buying Web sites like Groupon, LivingSocial, SocialBuy and BuyWithMe, shoppers across the country are using online coupons to nab steep discounts of 50 to 90% on dining, hotel rooms, spa treatments and recreation. The social aspect: Each of these deals is good only if "enough" people join in on the offer before it expires.

How many people are enough? Each deal has its own so-called "tipping point" that triggers the deal. If not enough people sign up, the deal is a bust and your credit card never gets charged.

For example: Earlier this week the New York Groupon site offered a $6 voucher for Ciao Bella pizzeria in New York City that could buy $14 worth of "Italian eats and treats." That particular offer needed 200 buyers within 24 hours before being activated; it reached the tipping point by mid-morning, and by the end of the day Groupon had sold more than 900 Ciao Bella vouchers.

Here are 7 strategies for maximizing the awesomeness of social buying sites.

1. Recruit Friends

To help a deal you want reach its "tipping point," refer your friends to the same deal you found, encouraging them to jump on the offer. After you opt to buy a deal, many of the social buying sites let you announce your recent purchase to your friends with a referral link. At Groupon, for each new friend that signs up and buys a deal through your referral link, you'll get a $10 referral bonus. So when letting your friends know about the amazing deal you found, tell them to "use my referral link to get the same deal and help me win 10 bucks." And if the deal is for a restaurant or local event, mention how fun it would be to experience it together as a group.

At LivingSocial, the deal might even end up being free for you if you recruit enough people to the same deal. For some offers, you need as few as three buddies.

Keep in mind, the importance of referring friends depends on where you live. In big cities like New York, Boston or Washington, D.C., deals tend to hit their tipping points on their own. But in cities where social buying sites have less of a presence, it may be trickier to activate deals. For example, earlier this year Groupon offered of a tour of Michael Jackson's home in Gary, Ind. It failed to reach the tipping point. "Everyone loves Michael Jackson, but not enough to visit Gary, Indiana," says Julie Mossler, a spokesperson for Groupon.

2. Buy Now, Use Later

For many deals, you won't be able to use your voucher or coupon the same day you buy it. That's because the merchants and small business owners who've arranged the deal need a little bit of time to handle the flood of customers. Deals are usually valid up to a year, and occasionally have blackout dates. Check the fine print.

But since you know this isn't a deal you have to redeem immediately, you can think ahead about what you may want. Expecting a rough couple of months at work? Next time you see a discounted offer for a massage or yoga class, jump on it and save it for later â€" when you'll need it most!

3. Get the App

Some social buying sites, such as Groupon and LivingSocial, offer free iPhone apps so you can check out and buy deals on the go.

4. Save When You Travel

If you know you're headed to say, Los Angeles, in the next few weeks, sign up to access L.A.-specific deals on the various social buying sites. Each day you'll have some local activity from which to choose. And because the deals most often stem from small businesses, the sites can show you how to experience a city like a local and for a fraction of the cost.

5. Save on Gifts

Unless specifically noted, social buying sites let you transfer your vouchers and coupons to others as gifts. So the next time you're looking for a fun gift for a friend or relative, check out the social deals going on in his or her local city.

6. Deal Gone Bad? Ask for Help

If you are unhappy with the deal and fail to get proper help from the merchant, social-buying sites encourage their customers to complain to the site. "We try to work with the customer and company to correct the experience. If not, we do pretty much anything - even issuing refunds at our costs - to make sure [the customer] is having a great experience with our brand," says Tim O'Shaughnessy, CEO of LivingSocial.

7. Make Suggestions

"Users help shape our content," says Mindy Joyce, a spokesperson for BuyWithMe. Indeed, social buying sites pride themselves on giving consumers what they want. To that end, they encourage you to let them know what types of merchants you'd like featured on the site. Tweet your requests to the sites' Twitter addresses or post a recommendation on their Facebook pages. You can also reach customer service and speak with a rep.


Photo Courtesy: Groupon.com

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    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter at @farnoosh.

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