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by Richard C. Ross

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Have any thoughts or comments on the subject of couponing?  We welcome your comments on our Facebook page!

 

With the possible exception of the "fat cats" on Wall Street -- and even they have had some fat trimmed -- one would be hard-put in an attempt to locate someone who hasn't been hit pretty hard as a result of the Great Recession to which we have been subjected.  It may have been "officially" declared as over, but take a good look around the Fox Valley (at least for starters) and you may be convinced otherwise.

Home values are still depressed, foreclosures and short sales are everywhere and way too may stores have been pasted with a "For Lease" sign.  Even some long-term stalwarts of the local communities have closed their doors because dwindling business forced their hands.    I'd like to zero in on the too-many eating establishments that have come and gone in the last several years...  With rapidly-rising food and energy costs, it's no wonder restaurants -- especially our local ones -- are having a difficult time.  But there is another demon out there about which restaurant owners, managers and even staff are concerned: coupons.

In and of themselves, coupons are really not such a bad thing.  After all, coupons have been used by manufacturers for many years as a way to get consumers to try new products or even to continue to use established ones.  Grocery stores use them to attract folks to buy a product at a reduced price, knowing that consumers are very likely to buy other products once they are in the store; stores routinely jack the prices on some products to offset the reduced prices on others for which the coupons are used.  Just take a look at any weekend newspaper (the Chicago Tribune is a great example) and you will see the plethora of price reductions on advertised products.  It's a game.  And if shoppers learn how to play it -- and many have, especially in these continued tough times -- costs to feed and cloth a family can be drastically reduced.  However...

Whereas coupons have, in the past, been limited to grocery stores and clothing, there has been a fairly recent explosion in the range of items on which coupons can be used; coupon use is reaching epic proportions.  Difficult economic times or no, there are arguments both pro and con regarding coupon use that can be easily defended.  While I shan't take sides on the issue, there are a number of aspects that need to be considered.  And likely because I spent a significant portion of my life involved with restaurants in some capacity or another, I am more aware of their plight than I am of other businesses.

If one were to look for scapegoats in this phenomenon -- at least as far as restaurants are concerned -- one might suggest Restaurant.com and Groupon as a starting point.  They are certainly not the only entities offering coupons, but they are two of the most prolific promoters.  As someone who is now on a fixed income (read: "retired") but who also likes to take a break from the kitchen and dine out occasionally, I have availed myself of the opportunity to use coupons from both the above-mentioned "deal-of-the-day websites, and not just at restaurants.  I have to say that having those coupons available helps immensely in reducing the cost of dining; ask anyone who has purchased and used coupons from either one of those companies and you will likely not get an argument on that point.

But let's take a closer look at what's happening on the other side of the fence... the side where restaurants reside.  And let's look specifically at the small and local establishment rather than the corporate and fast food places who they have their own marketing companies and immense budgets to which they have access.  There are a number of issues related to the use of coupons that can -- and usually do -- cause great consternation on the part of the three groups I listed above: owners, managers and staff. 

Let's start with what happens on a fairly regular basis to the wait staff or bartender who is presented with a coupon.  Aside from having to know if it is indeed valid (you mean, people try to use bogus coupons?!), they also have to know how to politely, correctly and gently deal with that issue, how to process the coupon and what rules -- if any (is alcohol counted toward the total or not) -- apply.  The gratuity, by the way, is sometimes automatically added and sometimes not, causing angst among patrons and staff alike.  Much of the time, patrons leave a gratuity based on what the total is after a coupon is applied, often leaving the server with a woefully small tip and a bad taste relating to coupon use...

Without downplaying the role of a good and competent manager, suffice it to say that he/she has all the attendant problems provided by the wait staff and bartenders in their struggle to deal with coupon-wielding customers.  Decisions have to be timely, prudent, intelligent and are often not to the advantage of the restaurant.  After all, what competent and benignant manager wants to make a scene over a $20 coupon?  A customer who leaves a restaurant unhappy, displeased or even angry over something is generally considered to eventually cost the place ten more diners -- just by word of mouth alone.

That brings us to the ultimate end of the line in terms of where the buck stops: the owner.  He/she has myriad problems when it comes to anticipating the potential impact of coupon use and how to appropriately staff the restaurant on a given night.  One horror story I experienced involved a restaurant where a Groupon was scheduled to expire at the end of a month... that coincidentally ended on a Saturday.  The slow-starting evening quickly became a nightmare as a much-larger-than-normal covey of customers clamored in, all wanting to use their Groupon prior to its expiration.  Unfortunately, the place was sorely understaffed and ill-prepared for the unforeseen onslaught.  Very difficult to predict when something like that might take place... stuff happens!

More important though, is the numbers part of that coupon game.  Even if poor economics and lack of discretionary dollars makes dining out difficult, restaurant owners still have payroll to be concerned about, rent and other bills to pay, and soaring food costs to consider.  If Restaurant.com, Groupon or someone else  comes knocking with an offer that promises to bring more guests through the door, an owner must answer some tough questions, starting with "What's it gonna cost me to do this?" and "If everyone else is doing this, don't I have to do it too?".  The dilemma results in part from the fact that coupons definitely have a hand in helping destroy food costs.  Think about it: if you pay only $20 for a $50 Groupon, you get $50 worth of dinner; how much of that $20 does the restaurant actually get?  And if food costs are already running at 35-40%, what happens to an already tight margin?  And what if a customer uses the coupon to visit but once... and doesn't come back, even if the food and service were exceptional? 

I'm not asking you to stop using coupons; they are now kinda like a cell phone.  Could you do without yours?   I am suggesting though, that you also consider the plight of your local restaurateur and how he is different from "The Big Guys".  Think about how things have changed, for both of you.  If it's difficult for you to make ends meet, remember that it's no different for the guy who owns that restaurant... or the guy or gal who works there.  By all means, use the coupon.  But lend support to the restaurant by your continued patronage.  And, if the service is what it's supposed to be, leave a gratuity based on what the total would have been without the coupon.  After all, you still got the full price printed on the coupon. 

Have any thoughts or comments on this subject?  We welcome your comments on our Facebook page!

 

 

 

 

 

 

 

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