US NEWS - July 24 - Craig Nelsen says that Groupon's payment structure led to the failure of his waffle shop. "I can no longer afford to sell waffles for $8.00 and still pay my employees." he wrote. The company sends businesses their share of sales in three installments, and Nelsen says the wait for those checks was so long that he couldn't keep up on other basic business costs. He joins a chorus of companies that feel they were burned by doing business with Groupon. In 2011, a UK bakery lost a year's worth of profits on a Groupon deal offering 75% off of a dozen cupcakes. When 8,500 people purchased the deal, the shop was forced to make and sell 102,000 cupcakes at a loss. "Groupon is one of the most effective marketing tools available to small businesses—it will yield an influx of traffic," Groupon spokeswoman Julie Mossler writes in an email. She notes that only 18% of the Back Alley Waffles deals sold have been redeemed, and Groupon has paid the restaurant two installments totalling $2,126, though Nelsen says that the checks came too late.
by Danielle Kurtzleben
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