Fitzroyalty

Hyperlocal news about Melbourne's first suburb: Fitzroy 3065

who’s cheating who in the Melbourne restaurant voucher economy

| 7 Comments

Once I started looking at the restaurant voucher issue in detail I realised that it is much bigger than I first thought. In this post I am going to focus on the behaviour of restaurants offering discount vouchers to customers via third party voucher publishers.

Restaurant vouchers are a scam. Their offer of a supposedly quality experience at a discount price targets customers driven by greed and price, not those driven by quality. The result is that you get what you pay for because restaurants change what they offer for voucher customers to reduce the loss they make from voucher prices.

Here are some of the strategies employed by unscrupulous Melbourne restaurants to cheat naive customers expecting a bargain from their vouchers.

Scam 1 – charge higher prices for the same food

This restaurant has a separate menu with higher prices than the normal menu for the same dishes. You pay more with a discount voucher, which effectively undermines the bargain customers expect to receive. When you make a booking you have to tell them it is with a voucher, and they try to keep the different prices a secret from customers.

Scam 2 – charge the same price for food of lesser quality

This restaurant lesser quality dishes than on the normal menu for the same price. They must be very naive if they think that customers won’t notice. The power of social recommendations mean that customers can quickly and easily share their experiences and warn others of the experience they are likely to have.

 Scam 3 – make it difficult to get a refund

Voucher providers make it difficult to get refunds, apparently in breach of the legal rights of consumers. While restaurants can’t be responsible for the actions of voucher companies, they should be aware of their broader business behaviour and evaluate whether they are appropriate business partners. Restaurants are partially complicit in ripping off consumers who buy vouchers, cannot use them through no fault of their own then find it difficult to get refunds.

Scam 4 – close during the voucher offer period

This is the situation that L’Angolo onNicholson St was an example of. It closed while vouchers for it were still valid, meaning that customers had to pursue refunds. There seems to be a repeated scenario where a business on the verge of collapsing tries to revive itself by buying lots of new customers via discounted voucher offers. But the cost of this hastens their financial collapse and they shut down immediately during the voucher period.

Scam 5 - limiting the value of the offer by going slow

If the offer is all you can eat then you expect to leave full and satisfied. But if the restaurant provides slow inefficient service, perhaps deliberately, then you can’t get what you thought you paid for.

Scam 6 – making it difficult to get a booking

If a restaurant offers vouchers, that signals to customers that the restaurant wants customers. So why then do some of them make it difficult or impossible to make a booking with a voucher? Perhaps because they’re hopeless at managing their business and become overwhelmed by the sudden demand, which leads to some of the problems listed above. In one instance, a pizza restaurant supposedly ran out of cheese.

Scam 7 – treat voucher customers badly so they won’t return

Vouchers ars supposedly a marketing tool designed to increase patronage. So why are so many voucher customers being treated so badly? Because many clueless restaurant managers or owners are only realising the economic disaster that vouchers represent once they experience the flood of demand and can’t cope. They have to reject the customers they’ve just tried so hard to acquire.

If you’ve been cheated by restaurants offering vouchers please make your comments public and make a complaint to Consumer Affairs Victoria.

7 Comments

  1. Not sure if this is against your linking policy, but you can read about complaints and other issues at OzBargain Forums, http://www.ozbargain.com.au/forum/23834.

    I expect this kind of one sided coverage from the Hun. These restaurants are dodgy, no doubt. Consumer law should (but doesn’t) allow you to get a refund. But to say this is what the majority of people’s experiences is just inflammatory and unresearched.

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    • I never said the majority of consumers’ experiences are consistent with these examples, just that the circumstances make it likely. I’m arguing that the economics of greedy consumers seeking a bargain and desperate small business owners trying to survive in a competitive, low profit margin environment, leads to irrational desperation and a desire to seek quick fixes to entrenched problems. This leads to the proliferation of Ponzi style marketing schemes like these vouchers and coupons. My summary of these conditions is that business owners and their customers get what they pay for – the greater their greed and stupidity the more likely they will be disappointed. Unresearched? Evidence provided by hundreds of consumers has been referenced.

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  2. Haha, I know the pizza place that “ran out of cheese” well. It’s at the bottom of our apartment when we lived in the city. Thankfully we walked by there this morning and I can report that it’s closed down.

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  3. I find your link of people buying a bargain being greed driven is a bit on the nose, if I can’t afford the “normal” price I don’t deserve the experiences??? Even if I will go out during the week or be flexible for seating availability??

    I have been exposed to just as broad a spectrum of quality and service while using coupons as I have when paying full price, I guess when I get bad service the taste is not so sour at the bargain prices.

    No really bad experiences and many great ones including an overseas holiday resort, the very positive word of mouth that I spread has value for them.

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    • As these examples demonstrate, you’re hopelessly deluded if you think you’re getting the full price experience without paying for it. Of course the quality is discounted along with the price.

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  4. My experience is all in the timing, quiet evenings or busy nights.
    The car washes I bought as a bargain are just the same as full price.
    I’ve just had a very ordinary “full price” meal “experience” at a much lauded country restaurant, felt like they don’t need to try.
    Coupons can be the wake up or quick exit for some businesses.

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  5. I’ve already said most of this but it’s most enjoyable to read about the impending demise of Groupon http://www.watoday.com.au/technology/technology-news/the-thrilling-demise-of-groupon-20120817-24dlq.html

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