The daily deal dilemma: is it right for you?

I had to laugh when I read Luke Hopewell's story about the snooty Sydney hotel boss, who was upset at the peasants paying bargain rates to stay in her hotel and taking off with the soaps and shampoo.

But seriously? What do you expect when you choose to offload stock on such bargain websites?

If a hotel has a certain cache, and is aimed at a certain well-heeled elite, you are bound to devalue your brand if you make it accessible to the hoi polloi!

Likewise, I used to enjoy a certain brand of surf-wear clothing, but I haven't bought any since it started appearing at The Warehouse.

When everyone can get it at a bargain, well then that brand just doesn't have the same exclusive appeal any more!

Furthermore, with the Observatory Hotel, I can also imagine full-paying guests might be somewhat annoyed there were cheapskate peasants paying considerably less for their rooms than they were.

Stories like this highlight the pitfalls of using such websites and their use is something businesses need to think about.

Retailers in New Zealand have been reporting other troubles with such discount websites, which is why Hamilton-based 1-day.co.nz announced it would close one of its websites last week.

Race Louden, 1-day sales and marketing manager, said there were too many negatives to discount coupon offering.

The service did not build brand loyalty for businesses because customers were always after the next bargain, it had a detrimental effect on industry-wide buying and it harmed companies that were not prepared for the influx of customers, he said.

"We didn't want to be associated with running a site that can also harm businesses," he said.

The company had also started to question whether consumers were getting the same quality as if they paid full price.

Now, being a typical cheapskate Kiwi, I have been using such websites pretty regularly.

I can concur with virtually all the comments from 1-day's Louden.

After enjoying 60 per cent off fine dining at one establishment, I probably will return because the food was particularly delicious.

For most of the other eateries I have taken my coupons to, unless there's another coupon, I won't be back, so his brand loyalty argument is true.

Retailers really do need to fully think through about whether such online offers suit their business. Certainly, the consumer seems to be gaining more from these sites than many of the businesses.

As for me, I've just bought a sushi lunch at 55 per cent off!