It seems like companies on Groupon, for whatever reason, often offer way more of a discount than they're comfortable with. I wonder why that is.

The money being lost on the Groupon is a sunk cost, so you've got:

Option A: Lose money on the customer, treat them like second class citizens, probably lose the customer forever, possibly have the customer tell all of his or her friends how bad they think the business is.

Option B: Lose money on the customer, still treat them just as well as any other customer or even better and try to convert them into a repeat customer and/or organic spokesperson for your business, recoup the lost groupon money over time through repeat business.

I can't speak for everyone but I know that if I'm an option B customer, I'm going to be an enthusiastic spokesperson for the business. Getting a great deal and good service early on is a good way to convert me to be a customer of yours for life (early impressions really stick with you, sort of the reasoning behind buying the first round of drinks, you probably don't need to buy another drink all night because you're the cool guy who bought the first round).

So all-in-all, I don't think all the blame of having Groupon customers treated badly (if this even exists as a real thing and isn't a perceived occurrence that isn't statistically a real thing) can be placed with Groupon.

I suspect at least part of it is likely just the fact that a lot of businesses have terrible customer service these days (probably due to a number of factors including low wages, races to the bottom on margins, etc) and as a customer you would have been treated pretty poorly anyway but the groupon thing gives you something to latch onto as far as reasoning it out.

To increase your audience, you almost always have to pay.

In contrast to big business, America especially likes to celebrate and idealize the small business owner as the one who truly knows the value of treating the customer right. But if these stories are frequent, it probably just exposes the sad truth that it's not as common, even in small business, as we like to believe or hope.

Even at that age, I was like, "wha? But, isn't that the purpose of a promotion? So someone tries your stuff and might come back?" It wasn't like a coupon in the back of a magazine, but something the car wash guy actively promoted.

Plus the most active users of groupon are probably doing it to save as much money as possible with coupons. They're unlikely to willingly throw away those savings on massive tips... and from what you hear about frequent groupon users they really don't tip the price pre-coupon.

You still save money with a coupon, you're not paying full price for the meal. That's no reason to screw over the server who depends on tips for a living. If someone is seriously strapped for cash and needs to save money, they should be cooking at home, not going to restaurants.

Don't get me wrong, I'd happily do away with the whole tipping culture and just have the entire price printed on the menu. But, as long as we have tips, take the time to learn how to do it right.

I'm personally bothered by the entire tipping culture in the US. Once used to acknowledge that someone has gone above and beyond, now it is just used by businesses as a means to pay below minimum wage (which is too low already). The fact that it is also percentage based this means a person working at a restaurant with higher prices likely makes more money just because I'm charged more for the food. This doesn't seem fair to those workers who are wait staffing at a more affordable restaurant. I can tip above standard percentages at those restaurants, but this isn't going to translate to the whole.

It is also well known that other discriminatory issues factor in to tips (age, gender, race, attractiveness, etc...)

Bottom line, tipping should be thrown out as an expectation and should have zero impact on wait staff wages. Restaurants should be forced to pay at or above minimum wage and menu prices can be adjusted accordingly. As dependent as today's society is on the food service industry, maybe it is about time they unionize and start striking at the local and/or national levels until some laws are changed to treat them fairly.

I think there are a lot of people like me who before groupon, never used a coupon at a sit down restaurant in my adult life, and therefore it was never something I ever had to even think about.

This is really the main point. Similarly, you're free to decide that it's gross to shake hands with the people you meet, but you should be aware that you're acting outside of cultural norms.

The bottom line is that tipping is a custom and an etiquette. These things vary quite a lot from location to location. It's surprising to me that someone would assert that there's really only one proper way to do it in a country as big as this.

Emily Post, for example, says to tip only on the pre-tax amount of the meal plus 1-2$ per drink and nothing at all about coupons.

Edit:

Still doesn't change the fact that Groupon has a rather nasty habit of taking advantage of small businesses and generally screwing them over. But that's a mixed bag also. I use Groupon a lot and find them to be a great source of places with generally well-meaning owners who are a good alternative to large corporate chains and work hard to keep me coming back.

My ex-girlfriend used Groupon to find ways to go cheap and took advantage of it with absolutely no intention of ever going back to see anyone a second time. Her repeat business could not be bought with any exceptional level of service.

Ultimately, it's a business decision the owners have to make for themselves. The problem for Groupon as a company is that their largest appeal is for people who are going to be a bad business decision for the owners using their service. It's a bad model, and it's clearly failing, so that means things are working exactly as they should.

Basically, nothing about tipping makes sense, so you just have to learn the thoroughly arbitrary rules.

The opposite happens, once the event is done, the facilities/stadiums/everything goes unused -- novelty and interest lost.

Same thing happens to these business when they worked with Groupon: make some money (oftentimes they don't even break even) during their promotions/deals, but as soon as it was over hardly any bothered to return.

The vast majority of people don't/don't realize that's the case, though, which makes huge half-off type deals pretty miserable for wait staff.

Sounds like this tension hasn't been managed very well.