Customers who showed up for a deeply discounted meal never came back to pay full price, presumably having moved on to the next bargain. Deal-seekers were regularly bad tippers.
One cafe owner in Portland said she lost $8,000 on a Groupon deal. At the time, businesses couldn't cap the number of Groupons the site could sell and she got clobbered by tons of people taking her up on an offer for $13 worth of service for $6.
(Mason, to his credit, heard her story and offered to "make things right.")
As we noted, that wasn't the majority of businesses. But a spate of stories like that made some merchants think twice about signing up.
4. Deal fatigue
The Internet is a "been there, done that" sort of place.
While 2010 and 2011 brought us stories of daily-deal addiction, 2012 and 2013 have brought more about daily-deal burnout.
From "Draw Something" to location-based games to those funny Facebook quizzes, what's hot today on the Web can be virtually gone tomorrow.
We're looking at you, "Harlem Shake."
5. Hope for the future?
Adapt or die. It's the law of the jungle, and the digital marketplace.
Kabani notes that Groupon actually had pretty good results last quarter. One thing they've done is become more of a buffet and less of a blue-plate special. Users can now go to the Groupon site and search for something they're actually interested in, rather than just waiting to see what pops into their inbox.
"Instead of just one daily deal, they're creating this open-ended marketplace that's done really well," he said. "Say you're looking for a massage deal or to get a haircut. You can go to Groupon now and find something like what you're looking for."
As noted above, Scoutmob scored a few million dollars in investments last year by positioning itself as a more well-rounded mobile company than some deals sites.
"The industry matured really, really quickly; that's kind of when you saw that hpyer growth period," Kabani said. "It's obviously not in that space any more. They're in the optimization mode ... trying to understand how to best optimize their subscribers."