Don't Let Groupons Go to Waste: Secondary Websites Do a Brisk Resale Business

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GrouponOne month of discounted parking, 50% off a local restaurant, and six sessions of laser hair removal for $45. What do these things have in common? They're unused daily deals with looming expiration dates.

More than 450 discount-offer websites and services have sprung up since 2008, and their demographic targets are getting narrower and narrower: moms, active singles, gay professionals. You name the group, there's a daily-deal site out there that is churning out coupons for them faster than anyone can use them. Nearly all are hoping to ride the coattails of wildly successful pioneer Groupon, which is preparing for an IPO at an eye-popping estimated valuation of $25 billion.

While thousands of deals are purchased every day, between 18% and 22% are not redeemed, according to Daily Deal Media, a company that tracks statistics about the industry. And all that spent-yet-unspent money is an opportunity for a secondary market. No surprise, a handful of new websites are taking advantage, providing an instant exchange that helps consumers find deals and gives deal-holders a way to cash-out on offers that they won't use.

Secondary Markets Gives Second Life to Offers, which opened in March 2010 and is based in Chicago, lists thousands of deals and offering a useful "online wallet" to organize and track your online coupons. The wallet sends users weekly email updates to warn when an expiration date is nearing. For those who decide they won't be able to use the offer, a few clicks and it's listed for sale in the marketplace. The consumer benefit is immediate: Buying Groupons doesn't have to require a full calendar schedule check at the same time.

"You only have to get burned once before you stop buying deals," says site founder Kris Petersen. "We are taking the remorse aspect out of industry. Now you can buy every deal you want, and then you can always sell it if you don't use it." He says the site has sold thousands of offers since it's launch and is experiencing "80% month-over-month growth."

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For buyers, the for-sale listings, mostly from industry leaders like Groupon, LivingSocial and BuyWithMe, don't add additional discounts, but do make available online offers that are no longer available on the host site. It is the only market to offer a mobile app for iPhone and Android which allows shoppers to search and buy deals -- such as discount movie tickets -- on the move. Sellers set the prices for their offers, and receive 90% of the value. The other 10% goes to the marketplace site to cover transaction costs. PayPal is used for all transactions, which has helped to eliminate fraud, says Petersen., another secondary market, offers a similar array of deals. There is some overlap but also many different offerings, as the sellers are individuals who may not have cross-posted on multiple sites. For buyers, there's no fee and the offer certificate is instantly made available upon purchase. Sellers can list as many as they want for free, but pay $0.99 plus 8% of the offer price when they make a sale. also aggregates and lists secondary sales on deals, but allows buyers to directly contact sellers and offer a price, a nice benefit for buyers and sellers willing to negotiate. It is also fee-free for sellers. Lastly, Dealigee offers a hybrid, with buy-now or make-an-offer options. However, its service is limited to deals in three major cities.

Evolving Rules for Daily Deal Coupons and Offers

While gift cards have been subject to an evolving range laws, and every state has slightly different rules, daily deals are still in a legal grey area. It's unclear whether they'll be regulated under existing gift card rules or be treated more like gift certificates. But with Groupon's IPO, the markets -- both primary and secondary -- are sure to be under more scrutiny.

"It's tough to maintain the [hotness] of the market," says Judd Lillestrand, founder of, a consumer resource for gift cards and laws. "Consumers don't like gotchas and if consumers have bad experiences, they will buy less often and there will be some fatigue. But I don't think [daily deals] will go away."
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