Daily Deal Sites Saving Money Or Fleecing Shoppers

By Author: Matt York
Total Articles: 21
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Group buying websites providing buyers with up to incredible 90 per cent discounts on products have caught the world by surprise. The obvious question is how these sites are able to throw out such quirky discounts only by promoting group buying. Basically, group buying is a unique approach of cutting price on the back of collective sale on the part of retailers or collective buying on the part of buyers.

Known as daily deal sites, group buying portals put on the display consumer goods and services and vow to give price-cuts of certain percentage to the buyers if predefined numbers of products are sold in a given time. Time counter running on the screens is dubbed as a gimmick to make bargains more persuasive. Logically, what matters most is numbers of buyers that are important to execute deals. Few daily deal sites condition the price-cut with numbers of purchasers as the discounts scale up in a direct proportion to the buying orders. These deals offer goods from sumptuous cuisines to antics and services from spa, beauty treatments to tickets of rodeo rides, which are normally expensive and beyond the reach of common ...
... person.

Price-cuts are brought under the questioning when buyers complain of unfair practices or delivery of discounts in contravention to the original commitments. The skepticism over the veracity of the discounts increased as few acts of noncommittal reared heads in recent past. The daily deal sites are mushrooming all over the world, especially where internet usage has ramped up substantially. Experts believe unregulated growth in group buying websites is resulting in unfair practices. As numbers of deal portals are increasing so are the complaints by the consumers.

Consumers Council of China has received 11 complaints related to the group buying worth HK$11,000 during Jan-March 2011. The common grievance was that vouchers bought from the group buying websites turned out to be worthless. The suggestion from the highest consumer rights body in China—that sees staggering rise in the numbers of daily deal sites lately—is that buyers should check authenticity, read terms of use, and read payment refunds policies before making online payments to avoid post-purchase irritations.

Unquestionably, price-cuts and discounts lead to savings for consumers, be they are in Middle East or North America. Arab consumers are avid internet users and in UAE alone internet users constitute 56 per cent of the total population. Their online spending is also considerable. Group buying titans like Groupon and Livingsocial and other sites are showering bargains and concessions on online bargain hunters. After all, Arab spends huge amount on personal grooming and electrical consumer appliances. In fact, UAE tops five global markets in terms of consumer spending on personal grooming and cosmetics products, according to the EuroMonitor. The spending is expected to touch 92 billion dirham by yearend. Similarly, daily deal sites are giving relief to recession-hit US consumers who, CBS News reports, spend 20 to 30 dollars on online discounts popping up in these sites.

There is a need for strong mechanism and regulatory measures to control unfair practices in the growing group buying industry accounting for millions of subscribers. Global enforcement may be difficult at this point of time as online business is spinning out of geographical boundaries. Yet, legal practitioners have to devise comprehensive legal framework to stave off incidences of consumer fleecing globally.

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