DealMonster Or Groupon - Which Offer Is Less Scary?

Some businesses will have used DealMonster, the UK-based regional deal voucher service run by the Johnston Press. If you’ve never heard of them before, it’s a service similar to Groupon, but without the Internet presence or ability to reach millions of potential customers.

DealMonster’s sales pitch compares to Groupon. Their selling point is that they usually retain less of the sale, taking a smaller commission and they don’t keep the money they collect from un-redeemed vouchers, like Groupon does.

One Blackpool based business that has used DealMonster and Groupon a couple times each contacted WireNews+Co with a warning to other businesses who may be thinking about promoting their business through a voucher programme.

Greg Smith, founder of SpudsToGo, said: "After a terrible Groupon experience, we contacted DealMonster hoping that because they were a local company they would be able to sell a reasonable number of vouchers, without the drama."

"But last month Tony Mellor, the DealMonster representative in Blackpool, originally ’tried it on’ by telling me that DealMonster would give us the ’same split as before—50/50’, but our previous agreement with his company was a 70/30 revenue share, which indicated to me that they take advantage of some businesses who don’t know what to expect," Smith said.

"We had used DealMonster a few months before and they claimed that they sold 59 vouchers, but 28 of those ’customers’ never called into our shop to claim their deal, which seems a very high failure rate after 6 months and compares similarly to our Groupon experience," Smith explained.

"If they hadn’t paid us for all of those sales I would have thought it was exactly like our Groupon experience where the company claimed to have sold a large number of vouchers and kept the money from the un-redeemed vouchers giving rise to my belief that they were running a scam," Smith continued.

But DealMonster does eventually pay out in two disbursements after 15 business days, on a Monday, giving them more than 3 weeks to use 75% of the money they collect from the sale of the vouchers (if any) and then a further 2 months for the remaining 25%. It’s quite possible that they’re doing the same thing that Groupon does and that they are inflating their sales by as much as an amount equal to their commission in order to ’fake it until they make it’ or build a business that will eventually straighten itself out.

According to Smith, this could explain why so many DealMonster vouchers are not claimed, like Groupon.

"In our first DealMonster promotion about 40% of the vouchers sold were not redeemed even after 6 months," Smith said.

"It’s been 5 weeks since the first vouchers were sold in the second promotion and a very small number of vouchers have been redeemed—fewer than 10%—but this time they only have 3 months to act so we don’t expect too many more vouchers to get redeemed," Smith explained.

It’s worth thinking about, but doing business with either company is quite scary.

http://www.wirenews.co/uk/internet-online/5127/dealmonster-or-groupon-which-offer-is-less-scary