, the social buying site with over 60 million subscribers and a valuation of $15 million
(at last count) wants to take its successful monetization model and incorporate it into cash registers. According to a Business Week
report, VeriFone Systems is in talks with Groupon's COO Rob Solomon about adding a "Groupon Button" to their cash registers. Wouldn't it be wiser for the social networks just to issue "Groupon" credit cards?
Shortly after the Business Week
story was posted by Olga Kharif, a retraction was added that "this story was corrected to remove reference to "cash registers" by "Groupon COO."
Apparently, while Groupon will be testing various approaches, Solomon told Business Week
that cash registers may be a payment system to be considered - that the company is in "an evaluation mode," and "test and learn is the best way to do this." Lindsay Durfee, a spokeswoman for Verifone declined to say whether her company was or was not in talks with Groupon.
Credit or debit cards would make so much more sense that planting a cash-out button on an antiquated 20th
Century payment device. The button only helps the merchant keep track of his accounting - the credit card is a service for both the consumer and the merchant - that could potentially increase sales. (Jury is still out whether Groupon's model attracts enough volume to compensate for merchant's having to discount so heavily).
With reports that the Chantilly-based deal site's revenues could reach as high as $6.1 billion this year
, it would stand to reason that merchants would be eager to accept Groupon credit cards that also offered its card-holders additional discounts off of each purchase they made using these cards.Andrew Mason
In my December, 2010 report, "Social Media's Six Billion Dollar Man Knows How To Shop For Deals
," it was noted that Groupon spurned Google's acquisition offer set at $6 billion. Whether or not that was a wise move, time will tell. Today, analysts
indicate Groupon needs to show double-digit quarter-over-quarter sales growth to pull off a successful IPO. CEO Andrew Mason said that a 2011 public offering is most likely and the company is presently in talks with Goldman Sachs and Morgan Stanley to potentially head this up.
Interestingly enough, there is breakage
on Groupon vouchers where only 80-90% actually use them to redeem the items purchased. This of course adds extra revenue to Groupon's coffers as they receive their money up front on all transactions.
Naturally new 'redemption' start-ups
are popping up to sop up this new source of income. Sites like DealsGoRound
purchase coupons from consumers who have experienced "buyer's remorse" and choose not to redeem their merchandise or service. DealsGoRound takes a 10% cut. Lifesta takes $.99 plus 8%. CoupRecoup is free.
So how do you weigh in readers, on this topic? Would you rather use a Groupon credit card for making purchases, versus collecting and storing coupons that are either forgotten, lost or need to be redeemed through other services? Using the option of a credit card, consumers wouldn't have to be concerned with tedious coupon organization. Buyers would only use their cards when they were good and ready to take advantage of that next, hefty discount. After all, who pays full price any more? Retail is for the uneducated!