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There are literally thousands of group buying sites that have sprung up over the past year. South Africa alone has seen the launch of Twangoo, security-lax competitor Wicount, Cape Town based UbuntuDeal, and very busy new kid on the block Dealio. That is not to mention any number of smaller sites all trying to play in the same space. Most recently Twangoo made headlines by being bought out by Groupon and have since been operating as Twangoo/Groupon/MyCityDeal – althought Twangoo is supposed to cease to exist shortly. And this is where it gets interesting.

For those that need a primer: a group buying site strikes a bargain with a merchant, say 50% off a product or service, spreads word of the deal on the Internet, and because a certain minimum number of buyers have purchased the deal it becomes financially or economically viable to a merchant, or is a loss leader that makes good marketing sense. A good group buying site sells coupons to their consumers, and the consumers trust the site to always give them a quality deal.

But what happens when that trust breaks down? Every day there are hundreds of people browsing Twangoo’s site, and they believe what they see. If Twangoo says a product costs R500 and they have it for R200, consumers trust that. Until now.

Enter Spray Tan Cape Town. On a deal that ran until February the 4th on Twangoo (which can be seen here: http://www.twangoo.co.za/cape-town/pay-r160-ageless-tan-treatment-spray-tan-cape-town [1]) Spray Tan Cape Town offered an “ageless tan” for 53% off. According to Twangoo, the original price was R340, but you could get it for R160. A quick hop over to Spray Tan Cape Town’s website confirms here that the anti-aging tan costs R340 (check here: http://spraytancapetown.co.za/tan-product/ [2] as well as here: http://spraytancapetown.co.za/pay/ [3]).

Dig a little deeper, though, and everything is not as it seems. You see, on the 8th of February, and many times prior to this, Spray Tan Cape Town ran a Gumtree advert marketing her spray tans. You can see an example here: http://capetown.gumtree.co.za/c-Business-Services-health-beauty-well-being-NEW-Anti-ageing-spray-tan-only-R230-W0QQAdIdZ259295353 [4]. In this advert the price of the anti-aging/ageless spray tan is SUDDENLY R230?! Even better – she offers the spray tan at a group rate of R200 for 5 girls, plus the 6th girl is free…so a group of 6 girls would pay R166.66 each. That makes her group rate around the same as the rate she had it on Twangoo, certainly not a mystical special. In fact, Spray Tan Cape Town’s website lists the ageless tan at R230, or R200 per session if you buy a set of 4, just a bit further down the page: http://spraytancapetown.co.za/tan-product/ [5]. What gives?

One of two things has clearly happened, and neither scenario sits well with us. The first scenario is that Twangoo instructed Spray Tan Cape Town to change her website to reflect a heavier price so that the discount could look proportionally large. Spray Tan Cape Town made the change, but slipped up and forgot to fix the bottom of her Tan Product page. Apart from being grossly unethical, the new Consumer Protection Act has specific legislation regarding price discrepancies – and this is certainly a major discrepancy. It goes against the group buying model, and it is an attempt to con consumers into buying a deal that simply isn’t accurate or even vaguely true. The second possibility is that Spray Tan Cape Town lied to Twangoo. She told them the ageless tan cost R340, and adjusted (most of) her website to reflect the changed price. This makes her an unethical business woman, and a liar, but it doesn’t absolve Twangoo of responsibility. Since they have been bought out by Groupon, they should be emulating Groupon’s model. Groupon hire fact checkers, whose job is to check all the facts of a deal before it goes live. The first fact that they check is the price point and percentage. Why did Twangoo do no checking on a deal that is clearly false? Were they complicit in this deception? Or was it their intent to deceive consumers from the word go?

I suppose we have to look at Twangoo’s history to see if they’ve ever over-inflated a deal. So let’s take a look at Spray Tan Cape Town’s previous deal with Twangoo: http://www.twangoo.co.za/cape-town/pay-r125-spray-tan-session-spray-tan-cape-town [6]. Here she’s offering a different spray tan, the “Caribbean Tan” for R125, marked down by 50% from R250. Except didn’t we already see that Spray Tan Cape Town’s website has it listed as R200 for a Caribbean tan? Oh that’s right, we did. Clearly this is not the first collusion in deception between Spray Tan Cape Town and Twangoo, nor has Groupons purchase of a known spam house suddenly made them act ethically (for Twangoo’s admission that they knowingly subscribe people who are “referred” to them without that person’s consent, see http://www.hellopeter.com/twangoo-south-africa-complaint-%5B505189%5D).

It’s sad to see a company that so many trust openly lie to the public. Spray Tan Cape Town’s deception is bad, but naïve entrepreneurs often make mistakes in their desperate attempt to get ahead of the game. Twangoo’s outright lie just to make a deal look good is not only cruel, but quite possibly illegal under the CPA act that will soon come into play. Couple that with Wicount’s recent security breach – and the observation some made that Wicount purchased a lot of coupons themselves to inflate their own sales (if you are purchasing on behalf of a consumer paying by EFT, surely you just create a user account on the site and put the voucher on that account? I know Dealio do that for bulk purchases or for people who are struggling with the payment system) – one is left wondering how many other group buying sites set out to deceive. It seems that, at least to Twangoo/Groupon South Africa and Wicount, honesty and good business ethics are dead.

Please note: This is not a personal attack on any of the above mentioned parties, but merely a deeper look into what could be going on with some of these group buying websites. It is only fair that information like this be published for the benefit of the consumers, as I feel some answers should be provided, because this does sound somewhat fishy.

~ Published by a guest writer