Bad Deal: Groupon Called Out for 'Discount' Nexus 7 Offer

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Groupon No Deal
Groupon is catching some flak this week after posting a deal on Google's Nexus 7 tablet that used some questionable math and didn't offer much of a discount.

On Tuesday, a poster to Reddit's Android forum accused the company of misleading customers with the deal, which offered a refurbished version of the 16 GB tablet for $189. The problem, noted the poster, is that Groupon (GRPN) presented the deal as a $71 discount, giving the product's list price as $260.

In fact, a brand new Google (GOOG) Nexus 7 retails for $199, which means that the deal was only offering a $10, or 5%, discount. And since the tablet on offer here was factory refurbished, that means you're arguably not getting any deal at all, as refurbished items are usually sold at a more significant discount -- on the Apple Store website, for instance, refurbished items are typically at least 15% cheaper than the new version. We're guessing most educated shoppers would rather pay $199 for a brand new Nexus than $189 for a refurbished one.

As for that questionable list price?

"The value and discount percentage listed on each deal reflect the regular full price for that product or service," the company wrote in response to the aggrieved user. "If the business offers other temporary discounts or decides to change their standard pricing after their deal is featured, the relative savings and value might change."

In fact, the 16 GB Nexus 7 was originally priced at $249 (not $260). But that list price was lowered to $199 way back in October of last year -- not "after the deal [was] featured."

Groupon did add that list prices are determined in part by a survey of online merchant pricing, and we did find some online stores selling it for above the original list price -- Kmart, for instance, is selling it for $250. But it's hard to believe that Groupon didn't think to check Google's own store, where it's available for $199.

Despite all of that, the deal is now sold out.

Using not-quite-kosher list prices to enhance the perceived value of a deal is nothing new. A little over a week ago, J.C. Penney denied a report in the New York Post that it was pushing suppliers to invent phony list prices to make its own prices seem low by comparison.

Both incidents are good reminders of why it's best not to weigh list prices too heavily when evaluating a discount. After all, the measure of a deal isn't how it compares to an MSRP that might have been concocted several months ago. Rather, it's whether you're buying from the merchant with the lowest price. We've previously highlighted several tools for ensuring you get the best deal, and we'd recommend you check them out before your next purchase. If the people who rushed to buy the Groupon deal had taken just a few minutes to use the available tools and research the product, they might have realized they weren't getting much of a bargain.

Have you ever bought a deal on Groupon or another daily-deal site, only to realize later that it wasn't the great discount you thought it was? Let us know in the comments or shoot us an email.


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


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Doug Grinbergs

Stupid website allows duplicate posts while showing:

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March 10 2013 at 3:21 AM Report abuse rate up rate down Reply
Doug Grinbergs

Also, AFAIK, factory refurbs have a 90-day warranty, compared with a one-year warranty for new devices.

(Damn, these auto-play video ads are so damn annoying!)

March 10 2013 at 3:17 AM Report abuse rate up rate down Reply
denalai

Noticed that yesterday and though something was wrong with the ad for the Nexus 7. Ripoff.

February 01 2013 at 12:26 PM Report abuse rate up rate down Reply
madddddddddddddd

THIS IS A GOOD REASON TO SELL UR STOCKK IN THIS CO

February 01 2013 at 10:42 AM Report abuse rate up rate down Reply