Is Groupon still worth it for local businesses in 2026?

Usually not, because of the double hit: you cut your normal price first, then pay a commission on what's left. On a deal with 50% off and 30% commission, you keep roughly a third of your normal price. That only pays off if you're filling empty capacity at close to zero extra cost, and you have a plan to bring deal customers back at full price.

Why almost everything you read about Groupon is outdated

Search "Groupon business experience" and you'll mostly find articles leaning on research from 2010 to 2012. The most-cited numbers come from marketing professor Utpal Dholakia at Rice University, who found in 2010, studying 150 US businesses, that 66% turned a profit on their Groupon promotion and 32% lost money. That study is now more than fifteen years old, American, and done back when daily deals were still a craze.

The market has shrunk since then. Wharton described in 2017 how the daily-deal model had passed its peak: LivingSocial, once valued at $6 billion, had just been acquired by Groupon for $0. The takeaway: almost any percentage you find online describes a different market at a different time. The math below, though, you can run yourself, with your own prices.

What Groupon charges today

Groupon works with no upfront cost. You pay no listing fee and no ad budget; the commission comes out of the revenue the deal generates. That commission rate isn't published as a fixed number. Groupon's own merchant page states that the percentage is negotiated per campaign and depends on industry, discount, and deal structure. That same page runs sample math at 20%, 30%, and 40% commission.

One thing that is handled cleanly: you're only charged on vouchers that actually get redeemed. If a voucher expires unused, Groupon refunds the customer and you pay nothing on it. When you talk to Groupon, always get the exact commission percentage in writing before you sign anything, because that one number decides the whole calculation.

The math to run before you sign

Take a massage practice with a $60 treatment. A typical deal gives 50% off, so the customer pays $30. Say you agree to 30% commission: another $9 comes off. You're left with $21 from a treatment that normally brings in $60. That's 35% of your normal price, for the same hour of work, the same oil, the same laundry.

At 40% commission, it drops to $18. And that's the gross side; your own per-treatment costs aren't even in there yet. For how to run this same math on any platform that takes a cut of your revenue, from delivery apps to booking sites, see our guide on calculating platform fees.

  • Normal price: $60
  • Deal price after 50% off: $30
  • 30% commission on the deal price: $9 off
  • Your revenue per deal customer: $21
  • At 40% commission: $18

The hidden assumption: do they come back?

The whole deal only makes sense if some share of deal customers later come back at your full price. That's exactly where it gets shaky. The 2010 Rice study already found that Groupon mostly benefited consumers, and that many deal buyers were chasing the discount itself. Bargain hunters tend to compare against the next deal, not book a return visit.

So hope is a bad line item in this budget. Turn the return visit into a system: collect an email address at redemption, book the follow-up visit on the spot, offer a concrete deal for that second appointment at a price you actually profit from. Without a rebooking system, you're buying one-time foot traffic at 35% of your rate.

When a Groupon deal can work

There are situations where the math does pay off. The common thread: you're filling capacity that would otherwise sit empty, your extra cost per customer is low, and you've set up the follow-up contact before the deal goes live.

  • You have structurally empty slots during off-peak hours, and the deal only applies then
  • Your marginal cost per extra customer is small, like a yoga class that's running anyway
  • You have a set routine for getting deal customers to book a second appointment
  • You can handle the volume; a calendar flooded with deal customers shouldn't crowd out full-price customers
  • You have the commission percentage in writing and have run the math with your own numbers

When you're better off skipping it

If your calendar is already fairly full, a deal just sells hours you could have filled at full price anyway. If you sell products with real cost of goods, the double hit of discount plus commission eats your margin entirely. And if you're hoping the deal builds brand awareness: your name sits small under a discount percentage, next to ten other deals.

For a local business, there's a cheaper route to new customers: getting found by people in your own neighborhood who are already looking for what you do, without a platform taking a cut. For how that works without an ad budget, see our guide on getting customers without advertising.

How to decide in one evening

Take your own price and rerun the massage math above with your numbers. Write down what a deal customer earns you and what an hour of work costs you. Then figure out how many of ten deal customers would need to return just to break even, and be honest with yourself about whether you'll hit that number without a tight rebooking system. Ask Groupon for the commission percentage in writing, and only run the numbers after that. If the result on paper is $21 for an hour you normally bill at $60, you have your answer.