Scoupon, Groupon, DailyDeals – we have all bought one, and as business owners we may have offered one – or at least considered one. However, have you considered that offering a daily deal might just be one of THE most expensive forms of finance out there.

In theory – daily deals can be a great way to build loyalty to your business – but a recent survey by Constant Contact in the US showed that 60% of consumers purchasing daily deals feel no loyalty to the business they are purchasing from. This is bad news for your business – as soon as you return your prices to normal – these customers will disappear.

When you are offering a daily deal – you are really obtaining one of the most expensive forms of finance out there. Think of a restaurant that offers a 40% off deal to customers who purchase a deal – in most agreements with sites such as scoupon – scoupon will keep 50% of the revenue for themselves. So the customer pays 60c on the dollar, the daily deals site keeps half of this – 30c and the restaurant is only left with 30c on the dollar. So the 40% discount to the customer becomes a 70% discount from the restaurant.

With a cash advance the customers do not see a discount – and as long as you provide an excellent service you will keep the customers loyalty.