6 Things You Might Not Know About Daily Deals

Editors Note – We originally published this article on Forbes.com

You may be a huge fan of daily deal sites, or you might be completely sick of them already. These are the sites—LivingSocial and Grouponare two well-known ones–that send consumers emails alerting them to products and services at big discounts for a limited time.

This holiday season, online sales have been growing at a double digit rate, breaking records, and you may be actively searching online or on your smart phone for the best deals and discounts for the items on your holiday shopping list. Using a daily deal site can be a great way to score huge savings, but before you dive in, here are some words to the wise.

1. Beware of price inflation. Because daily deal sites typically take 50% of the money you spend and give the other half to the merchant, many businesses have been caught inflating prices on their daily deal promotions in order to claim they are offering 50-90% off, when in fact they are not. It feels great scoring a deal, but make sure that you are actually getting a deal.

2. Use caution when buying online. Although deal sites often work out incredible deals for you, if a deal looks too good to be true, it probably is. There have been many horror stories about deal sites offering discounts on bogus products and services. Search Google and Yelp for reviews on a business before buying a coupon or placing an order. Make sure you see the company’s “https” in the browser when you enter your credit card details online. Never email your card details to anyone.

The countdown timers that these websites use are very powerful psychological triggers that will often compel you to make an impulse purchase. In fact, there is a really good chance that a similar deal will run soon again and you will surely get an email notification about it.

3. Businesses count on people to not redeem deals. A business that runs a daily deal promotion receives most of its profits from people who never redeem the coupon they ordered. If you do buy a daily deal, or if you are addicted to buying daily deals, don’t let it get lost in your email.You paid good money for the daily deal, so use and enjoy it. If you “gift” the daily deal to someone else, encourage them to use your gift.

4. Understand the expiration dates and local laws. The two major players in the deal space have been experiencing some major troubles regarding expiration dates and coupon laws. LivingSocial is in the midst of a class-action lawsuit that alleges that LivingSocial and a merchant partner offered vouchers with illegal expiration dates in violation of state and federal gift-card laws. Anyone marketing daily deals promotions must comply with these laws and include clear and conspicuous disclosures regarding expiration dates. Living Social is currently offering to settle for $4.5 Million. This comes less than three months after a U.S. District Court judge rejected a proposed $8.5 million settlement in a class action lawsuit against Groupon for similar coupon expiration date issues.

Just because you may have ordered a coupon a while back and the expiration date on your voucher has come and gone, doesn’t mean all is lost. Although there may be an expiration date on your coupon, your local laws most likely state that you can always redeem it for the amount you initially paid at regular price. For example, if you paid $10 for a $20 restaurant deal and your coupon expires, you can still use your voucher to get $10 off of your meal.

5. You can always unsubscribe. Your time is valuable and if you find yourself subscribed to many daily deal websites, you can always scroll to the bottom of the emails they send you and unsubscribe yourself from the list. It is illegal to not have an unsubscribe link, but unfortunately many people don’t realize this and are unsure of how to get off the list.

6. There are many daily deal sites. You may have only heard of Groupon and LivingSocial, but there are thousands of daily deal sites that offer a similar service in a wide range of geographic and niche-specific markets. My company alone, Daily Deal Builder, powers hundreds of deal websites.

If you are looking for a specific item, don’t hesitate to search for other deal sites and use search engines to find the best deals. Some websites, likeYipit.com, aggregate all of the deals from the major daily deal sites; you can use their service to skip through much of the clutter.

Do you have other tips for using daily deals? Please share your comments in the space below.