Another Groupon user bites the dust.
Back Alley Waffles, a new restaurant in downtown Washington, D.C., has shut its doors after just roughly three months in business, and it is blaming a Groupon deal gone bad. To recoup losses, Back Alley Waffles says it is now charging $450 each for waffles by appointment. (Hat tip: Washington City Paper.)
"Due to the shocking business practices of an obscenity known as 'Groupon' -- contemptible even by the nearly non-existent standards of the modern corporation -- I can no longer afford to sell waffles for $8.00 and still pay, for example, my employees something north of a subsistence wage," Back Alley Waffles said on its website.
Back Alley Waffles complained that Groupon did not pay them the money that was owed to them right away. Instead, the website said, after more than a month, Groupon sent them the first of three payments by check, even as "the big surge in customers" forced Big Alley Waffles to pay for the food and labor right away.
"This spot is about to blow up. They make AMAZING waffles," one Yelp reviewer wrote in early June. The main problem mentioned in the reviews: The restaurant sometimes ran out of waffles.
The owners of Back Alley Waffles are not alone in regretting their use of Groupon. Jessie Burke, the owner of Posies Cafe in Oregon, wrote in September 2010 that using Groupon was "the single worst decision I have ever made as a business owner thus far." She said that the Groupon deal cost her nearly $10,000, caused huge lines, and did not result in new regular customers.
Groupon maintained that its daily deals were not the cause of Back Alley's closure. "According to our records, only 132 Groupons, or 18% have been redeemed since Back Alley ran [its deal] two months ago, and Mr. Nelson has received 2/3 of his share of the revenue to date," wrote Julie Mossler, a Groupon spokeswoman, in an email to The Huffington Post. "We always hate to hear that a local business has decided to close," Mossler added, "but the math does not point to Groupon as the cause."
Only 44 percent of daily deals for restaurants and bars are profitable for the businesses, according to a study by Rice University released earlier this month.
Groupon itself is having trouble. Its stock price hit a record low on July 11. At the end of Monday, Groupon's stock was worth $7.38 per share: 63 percent below its IPO price. That's partly because Groupon used to use questionable accounting: Until last September, Groupon's reported revenue included money owed to merchants as if it were its own. Nowadays, Groupon's profit outlook is less rosy.
This article was updated to include comment from a spokesperson for Groupon.
Check out the weirdest Groupon deals below:
I Want To Draw A Cat For You
Illustrator Steve Gadlin <em>really</em> wants to draw a cat for you. His Groupon deal, which has since expired, offered drawings of cats doing whatever you want for $3. That included everything from cats meowing to <a href="http://www.facebook.com/photo.php?fbid=129908403692041&set=a.119876058028609.20884.118277658188449" target="_hplink">nerdy cats riding pirate ships</a>. Gadlin has drawn over 6,700 cats -- and counting -- for his customers. You can still buy cat drawings from Gadlin on his <a href="http://iwanttodrawacatforyou.com/" target="_hplink">I Want To Draw A Cat For You website</a> for $9.95 <a href="https://blog.groupon.com/cities/cat-drawing-guy-on-abcs-shark-tank/" target="_hplink">Gadlin was featured on season 3 of ABC's "Shark Tank"</a>, where he released the song "<a href="http://www.youtube.com/watch?v=uH6KhNoh-Cc&feature=player_embedded" target="_hplink">I Want To Draw A Cat For You</a>." This past May, Castlespring Enterprises -- product manufacturer for Disney, Hasbro and Toys R Us -- announced it would make a <a href="http://www.avclub.com/chicago/articles/steve-gadlins-i-want-to-draw-a-cat-for-you-picked,73919/" target="_hplink">line of products based on Gadlin's brand</a>.
Sea Expedition With Signed DVD From Leonardo DiCaprio Impersonator
A 13-day ocean voyage with a tour of the Titanic wreckage by Deep Ocean Expeditions sounds like a truly unique and enthralling experience. But throw in a copy of "Titanic" on DVD signed by Leonardo DiCaprio <strong>impersonator</strong> Frank Lloyd Roberts and you've got quite the deal sweetener. The $59,680 value is <a href="http://www.groupon.com/pages/titanic" target="_hplink">still available for $12,500</a>, fake DiCaprio turning into Jack Dawson and taking you to the lower decks of the Titanic for drunken dancing not included.
$100 For A Bedtime Tuck-In
Ever wanted to be tucked into bed by a stranger? Probably not, but if you did, there's a Groupon for you. The Chicago-based offer describes, in detail, how Groupon employee Ben Kobold will tuck you in. "Ben's sinewy, well-groomed fingers delicately raise each sheet and blanket over your body until you're comfortably bundled," <a href="http://www.groupon.com/deals/ben-kobold-tuck-in" target="_hplink">the offer reads</a>. "Careful not to disturb any children who may be in the adjacent room, Ben leans in and uses his summer-breeze-like voice to gently sing you one of the five lullabies he has authored." Four people bought the <a href="http://articles.chicagotribune.com/2012-06-04/business/sns-rt-us-groupon-tuckinbre85315v-20120604_1_groupon-stock-ceo-andrew-mason-ipo" target="_hplink">actually serious deal</a>, which is <a href="http://www.groupon.com/deals/ben-kobold-tuck-in" target="_hplink">no longer available</a>.
54% Off Breast Implants in Paris
If there's anything you wouldn't want to have done on the cheap, it might be plastic surgery. But last July, a Paris Groupon offered breast implants for 54 percent off. "New! Finally treat yourself to the chest of your dreams for 2,499 euros instead of 5,430 in a private plastic surgery clinic; pay in two installments," the offer read. At least <a href="http://www.hauteliving.com/2011/07/groupon-breast-implants/" target="_hplink">three people bought the deal</a>. A <a href="http://www.guardian.co.uk/media/2011/nov/23/groupon-cosmetic-surgery-ad-banned" target="_hplink">similar deal</a> was offered in the U.K.
76% Off Circumcision
Much like breast augmentation, circumcision is another procedure for which you probably shouldn't be bargain hunting. But Groupon in the Philippines is offering just that, with <a href="http://www.beeconomic.com.ph/deals/metro_manila/Cosmedics-Treatment-Center/716084137" target="_hplink">76 percent off on a circumcision procedure</a>. The only thing creepier than paying a steep discount on your child's circumcision is the playfulness of the deal's description: "Just like a triple backflip, performing a circumcision on oneself requires a lot of mental preparation, is very risky, and cannot easily be repeated. Have a trained professional snip the tip with today's Groupon."
$1,000 To Name Your Baby Clembough
Having trouble thinking of a baby name but have $1,000 to spare? Groupon thinks they have you covered: "A rose by any other name would smell as sweet, but a baby that isn't named by Groupon smells like missed opportunity." For that $1,000, the site will name your baby "Clembough." <a href="http://www.huffingtonpost.com/2012/06/11/groupon-will-name-your-baby-clembough_n_1586223.html?utm_hp_ref=mostpopular#slide=1008896" target="_hplink">Half-publicity gimmick, half serious deal</a>, a Groupon representative insists in the deal's Q&A that "this is the most serious deal that Groupon has ever seriously run in its serious history." <a href="http://www.groupon.com/deals/groupon-babyc" target="_hplink">The deal is still available</a>.
$25 Jeffery Dahmer Tour For Two
<a href="http://crime.about.com/od/serial/a/dahmer.htm" target="_hplink">Jeffery Dahmer's crimes</a> -- murder, cannibalism and necrophilia of 17 young men between 1988 and 1991 -- are the kind of horror reserved for serial killer infamy. For anyone curious to see the streets and watering holes of Milwaukee where Dahmer stalked and picked up his victims, Groupon offered a $25 tour for two. However, after <a href="http://www.cbsnews.com/8301-504083_162-57389622-504083/walking-tour-of-jeffrey-dahmers-neighborhood-spurs-controversy/?tag=mncol;txt" target="_hplink">families of Dahmer's victims called</a> the deal insensitive, the <a href="http://news.cnet.com/8301-17852_3-57390038-71/groupon-advertises-jeffrey-dahmer-deal-then-kills-it/" target="_hplink">deal was shut down, after 15 purchases</a>.
The Luxury Las Vegas Bus That Never Showed
Sometimes a deal on Groupon is too good to be true, as was the case for Southern Californian residents who bought round-trip "Luxury" tickets to Las Vegas. The deal was offered for $55, down from $149, and promised a "luxury bus" with free WiFi, premium movies, snacks and an unlimited drinks option. <a href="http://overheadbin.msnbc.msn.com/_news/2011/09/23/7922458-groupon-gone-bad-daily-deal-strands-passengers?lite" target="_hplink">MSNBC reported</a> that some luxury buses came up to five hours late, while some never came at all. A month later, Groupon severed ties with LUX over the fact that the company wasn't providing satisfactory service. Groupon <a href="http://www.10news.com/news/29779701/detail.html" target="_hplink">canceled the deal and refunded the passengers' money</a>.
Kink.com Adult Film Studio Tour
Earlier this year, Groupon found itself in the crosshairs of an anti-pornography group's war on smut after <a href="http://www.huffingtonpost.com/2012/04/24/groupon-kinkcom_n_1450015.html" target="_hplink">offering a tour of Kink.com's headquarters in the historic San Francisco Armory Building</a>. Kink is the world's largest producer of fetish pornography, producing films that frequently feature BDSM. The tour included <a href="http://www.huffingtonpost.com/vanessa-pinto/touring-the-armory_b_1454704.html" target="_hplink">a look at the building's historical features</a>, as well as a look into Kink's film sets, prop rooms and production facilities. Some <a href="http://maybemaimed.com/2011/05/02/my-unreal-experience-on-the-kink-inc-armory-tour/" target="_hplink">champion Kink as an advocate of alternative sexuality</a>, while <a href="http://www.youtube.com/watch?v=33iKp_dK2IA" target="_hplink">others see Kink as providing a degrading form of "torture porn."</a> Groupon defended Kink and the deal, which is no longer available after selling over 1,000 coupons.