Groupon voucher deal 'cost Hove firm thousands'
A Sussex business is having to move to smaller premises to save money after it lost thousands of pounds in a cut-price Groupon offer.
Veg Box UK, based in Hove, signed up to a deal with the voucher scheme company which offers large discounts to draw in new customers.
It offered £45 boxes of fruit and vegetables for £18 - but Groupon also takes half of the voucher price.
Veg Box UK was unable to meet the demand and had to offer some refunds.
Groupon, a US-based firm, offers coupons which give discount deals on anything from restaurant meals to spa treatments.
Companies sign up to the group-buying website as a way of reaching new customers.
Veg Box UK offered customers 70% discount on a box of fruit and vegetables delivered to their homes.
About 700 people took up the offer, but the large discount against the percentage share Veg Box UK got back from Groupon meant it could not afford to deliver to the amount of people who bought the vouchers, and it has had to move to smaller premises in order to survive.
A Groupon spokesman said: "Businesses have to know what they can do."
Daniel Harris, from Veg Box UK, said: "In hindsight, the buzz of the offer was great and amazing but the outcome hasn't been great for us.
"The knock on effect from the sheer demand actually had an impact on our reputation as a business.
"I think these offers work for certain types of businesses. They work if you are a massive established company and you've got a lot of stock you need to get rid of."
Tobias Tschoetsch, Groupon managing director, said: "We can give recommendations on capacity based on what the business tells us.
"Groupon is about helping small businesses grow, not stretching them beyond capacity. We succeed when they succeed.
"It's not always easy to precisely predict demand, but if a partner feels they aren't able to meet capacity, we work with them to revise the offer to a level they're more comfortable with."
Last year a Berkshire cake maker almost went bust after thousands more Groupon vouchers were redeemed than it expected.
Woodley-based Need a Cake offered discounts of 75% on cupcakes on the Groupon website and was unable to meet the sudden increase in demand.