How Foursquare improves on coupons

By Felix Salmon
March 10, 2011
Dan Frommer, is that it's completely invisible to your server and to your guests.

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There is nothing shameful or embarrassing about saving money, and restaurants wouldn’t pay Groupon lots of money for the privilege of using its service if they didn’t want lots of people to come in and claim a discount. But still, it’s undeniable: there’s a faint whiff of cheap associated with any coupon, to the point at which some restaurants are implementing built-in gratuities to try to stop people from tipping on the discounted amount. And I have friends who are adamant that they’ll never use a groupon or anything like it, for fear of the perceived stigma involved.

Enter Foursquare. The thing I like most about the Foursquare partnership with Amex, as explained by Dan Frommer, is that it’s completely invisible to your server and to your guests — in that respect it’s a bit like iDine, only even easier.

The obvious partner here, of course, is not Amex so much as Groupon itself. You buy your groupon online, and you don’t even need to print it out — the next time you check in to the merchant and pay the full amount for your meal or other service, you automagically find the amount of the refund on your credit card statement.

Technically, this whole system could probably work fine even without Foursquare’s cooperation: so long as you add Groupon as a friend on Foursquare, it’ll be able to see your checkin and take care of the rest of the process itself. But it’s always nice to see a little button come up on Foursquare saying you’ve activated a deal.

Between this and the other new features that Foursquare just announced in time for SXSW, I’m beginning to see how Foursquare could become the vital hyperlocal app. Now we just need them to change the search-results display, so that it shows results in order of distance rather than in order of popularity. That annoys me every time.

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Comments
5 comments so far

Have you ever used Groupon for a restaurant? I have. It isn’t the “embarrassment” associated with using a coupon that’s a problem. It’s that so many people buy them and use them in a short span of time (i.e. before they get shoved to the bottom of a pile, never to be seen again) that the restaurant and servers INEVITABLY give worse service than previously. “You have a Groupon?” is basically how you’re greeted, as though you wore it pinned to your jacket. I feel kind of sorry for patrons who are paying full price to be treated this way.

It’s a bad model for building your business, full stop. Better to reward regulars by giving THEM discounts and extras, then encouraging them to bring friends and neighbors, facebook acquaintances, etc.

I hate Groupon.

Posted by LadyGodiva | Report as abusive

Stigma at using coupons??? You and I move in very different circles, Felix. Still, while I’m not a Foursquare fan, I really like the idea of not having to remember to take a paper coupon with you. Perhaps a web property that is not so fixated on knowing my physical location can pick up on this concept.

Posted by Curmudgeon | Report as abusive

I think that you are on to something. There is a growing trend of location based value for consumers — Groupon is but one example. Having said that, Cardstar is a location-based customer loyalty application with 1.4 million users that integrated with Groupon last month and has been providing exactly the type of functionality you describe with many other couponing companies. Cardstar integrated with Foursquare months ago. You should check them out.

Posted by Jaberman | Report as abusive

I’m with Curmudgeon – perhaps I eat at such unforgivably low-rent places that using a coupon is pretty much par for the course. A guy’s gotta eat, after all.

Some banking institutions offer debit-loaded rewards that work like this. Fairly new, but it’ll be interesting to see how it gains traction.

Posted by strawman | Report as abusive

Do coupons result in sticky consumer behavior in a system where another coupon is always coming, and for a similar place nearby?
There already are specific discounts for specific consumer purchases. Chase, Bank of America, Visa, any of these might offer an increase to 5% rewards for drug store purchases, gas, etc. Or their online rewards portals might offer an additional 8% for barnes&noble, sears, etc. I like this form of coupon better because it gives me much greater freedom. $5 back on any $100 worth of goods at a supermarket is more valuable (to me) than $10 off a $40 meal at jimmy joe’s bbq shack.

Posted by thispaceforsale | Report as abusive
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