Bakery: We Lost At Least $19,500 In Groupon Deal

The biggest complaint from businesses that were unhappy with their Groupon experience is that too many people take advantage of the discount without spending money on anything that would make the company a profit. And while we’ve heard about some pretty bad cases, this story of a UK bakery’s experience with Groupon really takes the cake.

The bakery posted an offer on Groupon that gave customers a 75% discount on a dozen cupcakes, meaning customers could get $40 worth of treats for only $10.

If that sounds like a good deal to you, you’re not alone. 8,500 people purchased the deal. Thus, she had to spend around $19,500 — her profits for the year — to bring in extra workers to fulfill orders, all on top of the money she was losing from each dozen that went out the door.

“Without doubt, it was my worst ever business decision,” the bakery’s owner says. “We had thousands of orders pouring in that really we hadn’t expected to have. A much larger company would have difficulty coping.”

The owner says her business also suffered because the quality of the product dropped due to the fact that the temporary staff were not as skilled as her usual crew.

“We are still working to make up the lost money and will not be doing this again,” she says.

While some businesses cap the number of Groupon offers that are sold, a rep for Groupon says that there was no such limit in place in this instance: “We approach each business with a tailored, individual approach based on the prior history of similar deals.”

102,000 cupcakes! Small bakery burned by Groupon [MSNBC]

Thanks to Simon for the tip!

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.