What Is Groupon and How Does It Work?

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You’ve probably heard of the economic principle of “supply and demand”: that the price of a commodity is tied to how much of it is available, and how many people want it. Groupon.com is a website that takes advantage of that to help you find deals on all sorts of cool stuff. 

When a business has a bunch of stuff that people aren’t buying, they will sometimes contact Groupon and ask for a sale quota. Groupon responds by selling that many vouchers for the business’s products and services, which you can buy and then trade in… often for well below retail value!

So what exactly is Groupon?

Groupon is a website that allows you to purchase vouchers for various products and services at discounted prices. As long as the business that issued a particular voucher has sold enough of them, you can trade in one of those vouchers for a specific product or service at that business. And, in the unfortunate event that a business undersells its vouchers for a promotion and calls off the deal, you can return your voucher to get a refund for it.

Groupon is similar to other deal-of-the-day websites such as Woot.com, and Tanga.com.

How Groupon works: 5 steps to start discount shopping

1. Sign up for a free account.

It’s easy to get started on Groupon! Just enter your name, your email address, and a password. That’s all you need!

Signing up for a Groupon account

2. Find the deals in your neighborhood that suit your tastes.

Once you’re on the website or app, you can start giving it specific details about yourself. These include whether you’re male or female, where you live, and what sort of things you like to shop for. Based on what you tell Groupon, it will make recommendations on deals near you that you might like!

Telling Groupon the kinds of deals that you are interested in

3. Pick a deal that you like, and then purchase your voucher.

Once you find a deal on Groupon that you’d like to buy into, be sure to check the fine print and make any choices you are presented with first (i.e. some deals may give you a choice of different products or services that you can buy a voucher for). After all, we’d hate for you to buy a voucher, and then have the business that issued it reject it because it isn’t eligible for what you thought you could get for it.

If everything looks good, confirm the purchase of your voucher, and then enter your credit card information to complete your order. Your voucher should be available on your account almost immediately!

Viewing a Groupon deal

4. Redeem your voucher by entering its PIN code, or by cashing it in at the store.

Once you’ve purchased your voucher, you can print it out and take it with you to the business that issued it, and trade it in for cool stuff! Or, if the business has an online storefront, you can type in the code on your voucher instead.

What a Groupon voucher looks like

5. Use coupons on Groupon to save money on stuff that you buy every day.

Groupon isn’t just for big limited-time deals. It also has a section with coupons and promotion announcements from big-box retail chains. Click through Groupon to apply the coupon to your online shopping, or head to the nearest store for a retail chain and enjoy the savings!

Stores that you can get coupons for from Groupon

What can I get deals for on Groupon?

There are lots of different things that you can buy vouchers for on Groupon! Some of the more popular ideas include:

  • Car and truck service/repair
  • Spa and beauty parlor treatments
  • Gym and fitness club memberships
  • Home renovation and maintenance
  • Private learning businesses (e.g. driving schools)
  • Sports, entertainment, and attractions
  • Travel accommodations
  • Various types of merchandise

Throughout our Groupon course, we’ll show you how to purchase and redeem vouchers, what to do to get a refund if one of your vouchers isn’t valid anymore, and how to get bonus deals with Groupon Bucks and daily discounts on stores that you already shop at. So if you’re ready to potentially save big with Groupon, read on!