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How does Groupon "claim deal" works from technical point of view?
Hey Guys,
Any idea how Groupon "Claim Deal" works from a technical point of view?
Basically, a user will enter their Credit Card in groupon's website, and they will go to the merchant and pay with that same credit card, and they will automatically get a specific percentage back to their card.
Question is, how to do that, I'm guessing there must be a service provided by Master Card or Visa, or maybe a trusted 3rd party service.
Example:
https://www.groupon.com/deals/dunkin-donuts-grouponplus
Anyone have any idea?
Comments
Groupon appears as merchant and handles the payment.
This in a nutshell.
Yea exactly, but how is it done?
I mean If I claim a restaurant deal on Groupon, then I go to the restaurant and I pay normally without telling them anything, I instantly get the cashback.
How is the restaurant checking that I actually claimed something from groupon. I'm guessing there's some kind of a system that is comparing my card that I'm using in the restaurant with the cards that were used to claim a specific deal on groupon. If my card is found then Groupon handles the payment, if not, then the restaurant handles the payment. My question is what is the name of that service or how is it technically done?
I couldn't find any such service on mastercard/visa websites, so I'm guessing it's either Groupon is handling all the payments of that restaurant whether they claim it or not, or I'm missing something.
I would guess that this is a direct agreement with Groupon supported cards (don't use it, so cannot confirm). According to the review steps on the Dunkin Donuts, a statement credit appears directly on your credit card statement. I would guess that there is a system setup through Visa/MC that allows them to poll your card details for X number (X being any number of deal merchants that you signed up for) and cross verify your card number with the merchant selected. Then they can intermediary and process refunds to your CC for the statement credit.
I would venture to say that these type of agreements are tightly integrated services that is extremely custom in nature and required an extensive vetting process to be able to pull this off at scale.
My two cents.
I have done a Groupon as the receiving business for a driving school.
Groupon provides details of everyone that purchased the deal and apply a unique voucher reference to it (which you can use or not), the consumer either then called in or were contacted, validated and that's that.
For a restaurant then you may find after purchase you get a digital downloadable voucher for you to print, have on your phone or the restaurant may want to see evidence of your purchase.
The thing is, a lot of people try it on and call you directly looking for an even better deal, it is up to you what you do with them.
Groupon takes all payments and disperses them to you minus 10 to 50% commission (pre-agreed), you get 50% of what you are due minus commission after 30 days, 25% after 45 days and the remainder after 60 days, they do this as they have a no questions asked refund policy.
What you find with Groupon type offers though is that they bring the VERY WORST of people out of the woodwork, absolute bottom feeders with ZERO shame, not everyone obviously, but a good percentage.
My advice to anyone is, only use Groupon if you are using it to get rid of a load of crap you cant sell and don't care what you get for it, or if you offer a service and want some bend recognition and introducing new customers to your service.
In the case of any 'service' and I include food in that, make it near impossible for them not to spend more money, you must have a STRONG upsell, for example, if you are offering a meal, don't include drinks, when people know up front they will have to spend a little more, it weeds out the worst of them.
So the TL;DR is, use Groupon to get rid of old shit that won't sell or as a brand introduction tool, expect to make a loss, it is not a viable long-term business marketing strategy
@Hybrid your question about cashback, I have never seen anything like that offered on Groupon but as they hold all the money paid initially for a long time they will just refund you from that and ultimately take it off the final payment to the business.
They could work with a company similar to http://www.rewardinsight.com/
T&Cs from a similar service using Reward Insight:
"By registering a payment card in connection with transaction monitoring, you authorise the Publisher (via Sports Loyalty Card Limited (Reward)) to share your payment card information with Visa, MasterCard, Amex and other necessary payment service providers (Payment Service Providers) to confirm your enrolment. You authorise the Payment Service Providers to monitor transactions on your registered card(s) to identify purchases in order to determine whether you have qualified for an offer linked to your payment card, and for the Payment Service Providers to share such transaction details with Sports Loyalty Card Limited (Reward) and where applicable, the Publisher to enable your card-linked offer(s) and target offers that may be of interest to you."
@AnthonySmith, some deals are beyond coupons/vouchers now. The concept is called Groupon+ (Groupon Plus)
Check this for example: https://www.groupon.com/deals/dunkin-donuts-grouponplus
You click claim, you don't get a voucher, you just enter the credit card details on Groupon and your card don't get charged. Then you go to Dunkin, buy whatever you want, pay with your credit card at Dunkin, and you get the discount automatically. That's the process I'm trying to figure out. How are Groupon and Dunkin for example connected together?
Well I assume they just load up dunkin's POS with your credit card hash, then "Cash back is awarded in form of statement credits" its a retrospective cash back, its not a point of sale discount, its a cashback.
This - or Visa/MC want to join in loyalty program market.
I thought of that, but assuming Groupon are hashing the credit cards and sending them to Dunkin, then when Dunkin employee inserts the card in the machine to charge it, there's some kind of software or middleware that is hashing the card before sending the payment to the bank, if the hash is found in Dunkin's system they apply a discount, if not they charge the normal price.
However, isn't that illegal? I highly doubt they are allowed to hash the card from within their system or even store Groupons hashes without the card holder's consent. It's what puzzling me, they are either doing that, or it's some service provided by Visa/Mastercard
It is not applying a discount at the time/point of sale, its a cashback refund on your card.
LEB groupons coming...this could be fun. In a train wreck sort of way.
Groupon is not the merchant, it's called CLO and generally requires bank partnership.
http://www.edointeractive.com/card-linked-offers/
https://www.quotient.com/card-linked-offers/
It doesn't..
... like I'd even put a temporary credit card into any fly-by-night processor offering $0.01/transactions and a 2% fee.
This is very helpful, put me in the right direction. Thanks
And I'll further that with https://developer.visa.com/legacy/products/vop