And 40 percent of the respondents said they would not use Groupon again - notable, considering Groupon claims that at least 95 percent of its sellers request to be featured again.īefore you jump on the social-coupon bandwagon, make sure your business can handle it. While 66 percent of the 150 respondents said that their Groupon deal was profitable, a significant 32 percent found it unprofitable. A recent study by Rice University surveyed 150 small to midsize businesses that had used Groupon, asking about their social-coupon experience and whether they would use the service again.

Posies Café faced rude customers and overwhelming traffic - all at a price that barely covered the base cost of the food being sold.

Owner Jessie Burke penned a revealing blog post about her café's losing more than $8000 from its Groupon promotion. Portland, Oregon-based coffee shop Posies Café is one of those businesses. As some small businesses have learned the hard way, running a deeply discounted deal can give you so much traffic, and so many customers, that it will cost you money-a lot.

But small-business owners should be careful not to get swept up in the frenzy of social coupons.

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