My mother owns a coffeeshop - Her loyal visitors come in about once a day, spend on average $6, of which 50% is margin - That is, they bring in around $1000 gross profit/year. She has about 30-40 of those customers, upon which her entire business depends upon for it's "cover the nut" revenue.

She goes out of her _way_ to make those customers feel loved, and would never, ever, do something so insane as to jeopardize that $1K in annual profit over something as stupid as a $13 comp.

> She goes out of her _way_ to make those customers feel loved, and would never, ever, do something so insane as to jeopardize that $1K in annual profit over something as stupid as a $13 comp.

I used to live in Brighton, Massachusetts in a place with no internet and I'd go work at a cafe. The nearest place was called CafeNation, and it was pretty good. I'd go in there 5-6 days a week when I wasn't traveling, and usually got a crepe and then a coffee or tea. I was a regular, most people knew me.

One day I was in and out real fast to confirm something on email, I set my computer up, jammed away for 30 minutes in a hurry, didn't buy anything that time. Very, very unlike me, I was just absorbed in work. Whatever it was, it was semi-urgent.

The girl at the counter was new and didn't recognize me, and as I was packing up, she said, "Excuse me, are you going to buy something or what?" I was kind of shaken by this. I bought a juice to go, but then I started going to CafeNation a lot less.

Thing is, in retrospect it was totally silly. It shouldn't have made a difference - one employee who didn't know who wasn't even that rude from her perspective. I didn't even reply to her that I was a regular, I just gave her $2 and grabbed the orange juice and left, and then I started going to CafeNation a whole lot less. Kind of irrational of me, actually, since I see how her actions make sense from her perspective, but I just had a bad vibe about the place after that.

I think your reaction is reasonable.

In exchange for loyalty to a venue, customers expect and deserve a little "extra", be that in the form of benefits over-and-above, or simply taking extra care to not be rude!

If it's a new employee it's obviously a grey area - it's no one's fault explicitly, but management could have prepped the new employee better. The employee thought they were doing the right thing, which is unfortunate.

You're right, but, a nit: coffee shops aren't selling a cup of flavored caffeine water. They're selling a service that produces flavored caffeine water, to order, in a coffee shop (read: high rent) environment. When you factor payroll and rent into it, the cost to serve a cup of coffee isn't actually a great deal for the shop. Most of them fail.

That's neither here nor there for the one case of a loyal customer asking for a discount; of course this business owner is sorely mistaken (and also doesn't appear to understand the concept of a marketing budget, or figuring out what that marketing budget can buy).

Indeed, there was a great (anecdotal) Slate article about the economics of opening a coffee shop: http://www.slate.com/id/2132576/

I think she's making unwise business decisions, especially in her treatment of her best customers. If she's a good, loyal customer, I would honor the coupon even if it's expired. She's trying to alienate exactly the wrong people. Loyal customers, you're special--we don't this for everyone because we like you.

She could even still invalidate the coupon, but say, because I value your business (and return customers are the lifelines of restaurants), I'll take $12 off the bill, just for you. The Groupon is still expired, customer receives discount and is happy, and business enjoys continued business from loyal customer, and perhaps even a customer's obligation to bring more business to the coffee shop.

To outright deny the coupon or some other good-will gesture just seems bizarre. If someone is spending on average $8 and shows up 10 times a month, why risk a $1000 in business for a $12 coupon?

Not only this, but this seems like it might be against the Groupon terms of service to deny the coupon outright.

According to the fine print on one of the Groupons I have, after the expiration date the coupon is still good as a voucher worth what the customer originally paid.

You're not entitled to the advertised deal, but that coupon is worth money toward goods and services. For example, your $25 coupon is no longer good for a $75 spa treatment, but you still have $25 credit at the spa.

It's not clear from the post that she didn't take it as a $6 credit. It seems that way, but the author never says that and it's not the point she's trying to get across.

They do that because it is a specific law in many states.

I'm sure Groupon will make a similar exception for Posie's Cafe.

What Groupon wants doesn't particularly matter to the situation. Unless Groupon has somehow convinced you to sign a contract promising that you'll never give anyone a better discount than the Groupon, you can handle regular customers however you want - including customers who aren't doing business under Groupon terms, because their Groupon is expired and doesn't apply. So: "Sure, Lucy. Here you go."

Now, there is a real barrier to just giving Lucy the deal. The entire point of the blog post is that the discount was ruinously unaffordable and didn't attract customers. When you can't make payroll, maybe you genuinely can't afford to comp six dollars of flavored water! Or maybe you don't want to set the public precedent of honoring expired coupons when the coupons were bad business even during their active dates and an entire line of customers is listening to this exchange while waiting behind Lucy. Maybe you get a flood of people digging out their expired coupons, or just demanding to be treated as well as Lucy - exactly what you can't afford. If something is unsustainable then you need to stop sustaining it, and that means there has to be a first person you tell "No."

I suspect that was the sense in which the original poster said she "can't" give Lucy the deal: The deal can't be continued - it's been a disaster - it can't go on. Strictly speaking, you have the power to treat customers however you want, but at the end of a bad business decision related to customer discounts, it's only human to frame everything in terms of "we need to get out of this bad deal."

But taking the Groupon deal at a bad price, such that she painted herself into a corner with her best customer, was still the original poster's own mistake.

I feel it would be unambiguously better, in a social and moral sense, if Groupon provided more advice and guidance to discount providers so that they don't risk going out of business. The mistakes may have been the responsibility of Posie's Cafe, but problems are problems, and Groupon wasn't exactly an uninterested bystander in the issue. I think it would probably be better for Groupon's long-term economic interests as well; if you burn your business partners, you earn a bad reputation, and eventually you run out of people who haven't heard the nasty rumors.