LivingSocial Slammed for Cable 'Deal' That's No Deal

Living Social Scam
Living Social
Another daily deal site is in trouble after posting a "deal" that doesn't actually offer a discount.

Industry watcher Daily Deal Media noticed that LivingSocial posted a deal late last month offering a VHS-to-DVD converter cable for $25 -- a discount, it says, of 64 percent. And while more than 1,500 users have taken advantage of the deal (which is still active) many others are pointing out that the "deal" doesn't actually save you a money. Daily Deal Media points to a discussion on Yelp where one reviewer calls the deal a "scam" and notes that the item can be found for significantly cheaper on various other sites.

"Scam" may be a bit harsh. If you buy this deal, your $25 gets you a voucher code that can be redeemed at electronics retailer Digital 007 for the product in question. That site is selling the cable for $70, so you are indeed getting the item for 64 percent off the Digital 007 price.

But Digital 007 is far from the only website selling this product, and that's where the "deal" falls short. A quick search on Google Shopping (GOOG) shows that it can be had for around $15 from numerous sellers, and Amazon sells it for just $10.50 -- less than half of LivingSocial's price.

This is a good reminder that, whether you're shopping through a discount retailer or a daily-deal site, you should take percentage-off discounts with a big grain of salt. The "sticker price" that's being used as the reference could be cherry-picked from another retailer who hasn't stayed competitive in pricing, or it could be based on an MSRP that no one is actually using anymore.

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The latter was true of a "deal" that Groupon (GRPN) held last year on refurbished Google's Nexus 7 tablets; while the $189 price was advertised as a 27 percent-off discount, Google had long since dropped that price to $199, meaning you were only saving $10 by buying a refurbished product through Groupon.

When you're evaluating a deal, it doesn't matter how much they're taking off the original price, or how much they're beating the price of some unnamed competitor. The only question that matters is whether the seller is currently beating the rest of the marketplace on price.

The good news is that it's easier than ever to answer that question. The hundreds of people who bought this deal could have saved themselves some money simply by copying the name of the product into Google and seeing all the retailers selling it for less. And Google is joined by numerous other price-comparison tools, including barcode-scanning apps and browser extensions that alert you when you're about to overspend. Next time you see a deal, we suggest consulting one of these services before you click "buy."

But if you made the mistake of buying this deal from LivingSocial, don't fret: The site lets you return unused vouchers within 7 days, so you can still get your money back.

The Must-Have Tools to Guarantee You Get the Best Price
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LivingSocial Slammed for Cable 'Deal' That's No Deal

Sure, you could click through all your favorite e-commerce sites looking for the best price. But who has time for that? A few services do the legwork for you, instantly searching for your chosen item across a wide variety of retail sites. Two of the best are Google Shopping and PriceGrabber.

Google (GOOG) performs well in head-to-head tests between the two. Its interface is clean and intuitive, and -- as you might expect from Google -- the search tool is a bit better. For instance, when I searched for "season 2" of a TV show on PriceGrabber, it didn't find what I sought until I changed that part of the search string to "season two." Google Shopping had no such issues.

But Google has one big disadvantage: Due to its new policy of making merchants pay to have their wares listed in the search results, it doesn't list items from Amazon (which declined to pay up). It's hard to recommend Google's price-comparison tool when it excludes the biggest e-commerce site.

So both services have their advantages and disadvantages. For now, we suggest running your search on both sites.

Price-comparison sites are great if you're doing research on a computer before you make your purchase. But if you're in a store and something on the shelf catches your eye, your best bet may be to use a barcode-scanning app on your smartphone to make the relevant price comparisons.

As I noted in my roundup of the best showrooming apps, both Google and Amazon (AMZN) offer good barcode scanners, and Google in particular wins points for its ability to recognize books and DVDs by their covers alone. But the exclusion of Amazon hurts Google here as well, and Amazon's apps are, of course, limited to its own offerings. As such, our favorite is one of the original players in the barcode game: RedLaser, offered by eBay (EBAY).

It's also worth noting: Some retailers are trying to confound such apps by sticking their own barcodes over the originals or by offering "exclusives" that are just the same product with a slightly different model number. In such cases, manually search for the name of the product ... and then take your money to a business that doesn't try to trick you into overpaying.

FreePriceAlerts is a free browser extension that heroically dives in at the last minute to save you from overpaying.

Consider it a fail-safe of sorts: Maybe you forgot to use a price-comparison site, or maybe you simply didn't have time to do a bunch of research. In either case, FreePriceAlerts does the work for you. When you navigate to a product page on a compatible e-commerce site, you'll get a pop-up in the corner of the screen letting you know there's a better price on the same product elsewhere (or a check mark, which signifies that you've found the lowest price). When I went to check out a video game on Amazon, it told me I should instead go to, where I would pay $26.71 instead of $31.50, a savings of 15%.

One caveat: It doesn't take tax and shipping into account when it makes its recommendations, so you'll occasionally be directed to a site where the final cost is actually higher. As such, your best bet is to do your research first on Google or PriceGrabber, which will show you the bottom-line price. But it's still a great tool to save you from spending too much on an impulse buy.

Most e-commerce sites now have a "discount code" field on the checkout page, but finding a code to use there can be a bit of crapshoot. For a while your best bet was to run a Google search for "[retailer name] coupon codes," or check out a dedicated couponing site like RetailMeNot.

But now a couple of browser extensions are taking some of the guesswork out of this process. Install the Chrome extension Honey and a prominent orange button will be displayed on the checkout page of more than a hundred participating retailers. Click the button, and it will automatically test out several coupon codes and apply the one that provides the biggest savings. With Coupons at Checkout (offered by CouponFollow), you just click inside the coupon code field and you'll get a drop-down menu of possible codes, showing both the percentage-off and the success rate of other users who tried that code. Honey is available only for Chrome, while Coupons at Checkout works with all major browsers.

Even if you don't find a code that works, it's still nice to get some reassurance that you didn't miss out on a potential for savings.

What happens when you use the available tools to find the best possible price, and it still isn't low enough? Well, then you'll have to play the waiting game.

Given enough time, most products will eventually come down in price. But waiting until an item falls into your price range can be time-consuming and frustrating -- nobody wants to run a search on PriceGrabber every week just to see if that video game has dropped below $30. And a weekly search might not even be enough, as a price drop or sale sometimes only lasts for a day or a few hours.

Fortunately, there are services to help. ShopAdvisor lets you set up email alerts on specific products that let you know when they drop in price. It also has a free mobile app that lets you scan barcodes of items you find in stores to add them to your watchlist. FreePriceAlerts, in addition to alerting you when you're about to spend too much on an item, also has email alerts and a free mobile app. In both cases, you get a heads-up when what you want to buy is finally cheap enough for you to pull the trigger.

Even if you've done everything right -- shopped around, checked for coupon codes and analyzed whether a price drop is imminent -- you can still get burned by a price drop or sale that takes place right after your purchase. But some credit cards now offer automatic protection against post-purchase price drops.

The most prominent of these services is Price Rewind, which is offered on Citi (C) credit cards. If you make a purchase with your Citi card and then a lower price turns up within 30 days, Citi will pay you the difference. The new price must be at least $25 lower, so in all likelihood this will mainly be used on bigger-ticket items like electronics. What makes the program particularly notable is that Citi will check for lower prices on your behalf and send you the discount automatically if it finds a better offer. It stops short of guaranteeing that it will find a better price, though, so we'd suggest setting up a price alert and making a claim if you find a deal that Citi doesn't.

There are a few other cards that offer this sort of purchase protection -- the Chase Sapphire Preferred offers a 90-day guarantee, though the Chase (JPM) card has a $95 annual fee after the first year. As far as we can tell, Citi is the only major issuer offering price protection on its full line of consumer cards, which means you can get this service on a card with no annual fee.


Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at, and follow him on Twitter at @Brownellorama.
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