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A small business based in Sussex in the UK is having to save cash by moving its operations to smaller premises, after it lost thousands of pounds due to a cut-price deal with the US firm Groupon (Public, NASDAQ:GRPN).
The small firm, Veg Box UK which is based in the town of Hove, signed up to an agreement with the discount provider which offers deals to help businesses draw in customers, and takes a cut of money earned by companies who advertise with it.
Veg Box UK gave away boxes of fruit and vegetables worth £45 for only £18 on the Groupon website – but half of the earnings from this voucher price go to Groupon. Veg Box was not able to meet demand and therefore had to offer some customers refunds.
The small business also offered customers a discount of 70% on a box of fruit and veg delivered to their houses. Around 700 people claimed this offer, but the big discount against the percentage share that Veg Box received back from Groupon meant that it couldn’t afford to deliver its produce to the number of people who purchased the vouchers.
The BBC news website reported that a spokesman from Groupon said, in response to the issue, that businesses must know what they can do. While some small companies have had similar troubles when dealing with deals websites, a number have also benefited from their involvement with them.
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What this doesn’t tell you is that vegbox uk then contacted all the Groupon customers and asked each of them to sign up with them directly for the same deal so cutting out the “middle man”. Vegbox Uk failed to deliver the goods and then disappeared taking £20 each from an unspecified number of customers. Disgraceful that they are all over the press as the victim when they have swindled hundreds of people.