Groupon: How it works

Groupon – a portmanteau of “group” and “coupon” – promises to deliver the latest daily hot deals and special offers to its 20 million users worldwide every morning.



The site – groupon.com – is free to sign up to, and it covers more than 300 cities worldwide, predominantly in the United States, but also across Europe.

Subscribers receive an email every morning containing the latest offers and discounts, including what Groupon calls an “unbeatable deal”, with savings of 50 per cent or more on services such as meals, domestic cleaning, or a spa trip.

The site works on the basis of collective bargaining power – a certain number of people (as agreed between Groupon and the business) have to pledge to take advantage of the deal before it is “activated”, and their money collected.

Groupon deals purely in services – you won’t find it offering discounts on TVs, CDs or DVDs. The company employs around 1,000 people in Chicago, many of whom work exclusively on building relationships with local businesses to secure the best discounts for users.