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Comment by pigbucket | Hacker News Reader

From PosiesCafe blog: "When I talked to Lucinda today, she asked if there was a cap on how many were sold to help protect the business from too much loss, and the simple answer is, no. When you sign up for Groupon, you are agreeing to sell as many as get sold… and why would Groupon want it any other way? They get half of the earnings."

From Groublogpon: "Also, to clarify one important point: it has always been Groupon policy to allow merchants to cap deals. If a merchant sells too many Groupons, they’ll have a bad experience, the customer will have a bad experience, and therefore, Groupon loses."

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Must be some kind of miscommunication . . . I doubt either are lying about their perception of the situation.

I'm gonna sound cynical here, but why do you think that? People in business lie all the time to cover their butts or prevent embarrassment.

As someone who works in B2B I have found this to be the case.

Well for one thing, it would be easy to verify whether or not Groupon is lying here, by talking to other companies that have used Groupon. If they are caught lying, it will hurt their reputation, especially when they are in reputation-protecting mode. They could be lying, but it would be a very bad business decision.

The lying one was probably the salesman, if my past experience is any guide.

A wild guess: Groupon gives a better deal to businesses without a cap, or with high caps. Or, if you set your cap too low, you never get your 'day' because you're stuck waiting behind other businesses that offer more juice to Groupon.

That's fair, though it may tempt small businesses with only a rudimentary understanding of their own margins to over-market.

Or groupon gives a better deal to there sales reps with there is no cap.

well she did say the original rate was 100%...might have went like this: "well I can lower that to 50% if you agree to run unlimited coupons"

Based on all the published words of Lucinda it seems clear to me that she is essentially incompetent. Groupon is just one type of rope that she used to hang herself. But not the only rope by any means.

Having said that, of course it is in Groupon's best interest to avoid doing business in those kinds of situations. Pretty frightening PR for them.

What proof do you have of Lucinda's incompetence? I must admit I'm curious as to how you came to that conclusion (even if it's little hints in the article, here and there).

The owner of Posies is Jessie, not Lucinda (the regular customer). I have to admit I'm surprised Jessie agreed to take a loss without any upper bound. It's almost like stock speculators who used to take naked short positions with no hedging. Somehow it never crosses their mind to say "wait, couldn't this completely wipe me out?"

Oops I meant Jessie. I base it on a few things.

1. She didn't see this coming. Apparently she has no instinct for due diligence.

2. The way she handled one of her best customers, Lucinda. This woman does not seem to understand the most basic principles of successfully running a small business.

I've seen Jessie make essentially 2 business decisions and both have been horrendously embarrassingly bad.

Do Groupon’s salesmen have an incentive to get shops to sign up for uncapped Groupons?

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