I love a great deal. One of the best deals I ever found was on a sundress. Got it for $10 off the sale rack at Garage. I still pull it out a few times each summer. I love the way it makes me feel —beautiful and sexy. My husband loves it, too. My kids are embarrassed…Perfect!
When these new “daily deal” websites began cropping up, I signed up for a couple of them. Now every day my inbox is clogged with amazing deals. I haven’t actually tried any of them yet. Something about them makes me uneasy. It’s almost like they’re too good of a deal. It makes me wonder, what’s wrong here?
How can they charge so little and still stay in business? The short answer is, they can’t.
The number of cosmetic medical treatments that are being offered on these sites is particularly concerning. Laser hair removal, photofacials and microdermabrasion are being offered at cut-rate prices almost daily. I have to wonder, how can they charge so little and still stay in business? So I did the math, and the short answer is: They can’t.
According to my calculations based on an actual deal that I pulled off the Groupon website (see calculation at right), the business offering six sessions of laser hair removal on lower legs at $399 is earning $33 per hour. After paying their technician only minimum wage and paying the lease on their laser and their rent, they are already losing money. There is nothing left to pay for other expenses like cleaning supplies or maintenance for their laser. In other words, by offering such deep discounts on their services, and by selling them in large quantities, this business is losing money.
So if they’re losing so much money, how do they stay in business?
Consumer complaints websites are full of answers to this question. Basically, they do one of three things:
1. They get overwhelmed and go out of business.
2. They decide they cannot afford to honour the deal.
3. They start cutting corners, such as by hiring inexperienced, low-paid staff, drastically shortening treatment times, purchasing low-grade machines and not maintaining them properly, or not allowing adequate time to clean their rooms and equipment between clients.
After this medical spa went the daily deal route, it became a numbers game: How many clients can they see in an hour?
A couple of years ago, I interviewed a medical esthetician for a position at our Clinic. She had worked at a medical-spa in the Toronto area for the previous five years. She said at first, she liked working there. She was proud to be a part of a reputable company that was concerned about providing high-quality treatments. But when their competitors started enticing their customers away through daily deal websites, they felt the pressure to follow suit. After that, she said regretfully, the quality of their treatments visibly declined. It became a numbers game: How many clients can you get through the door in the space of an hour? How much less can we pay the technicians? She was glad when her husband was relocated to Ottawa and she had a good reason to quit.
The field of cosmetic medicine is unregulated in Ontario. There are no rules to protect the safety of the consumer. There is nothing illegal about purchasing used lasers, hiring unqualified staff to operate them, or providing inadequate treatments. It is truly a “buyer beware” environment.
In the end, it comes back to the old adage, “if something looks too good to be true, it probably is”. Or, as comedian Gabriel Iglesias once said wryly: “I don’t know about you, but I’m just not comfortable eating a taco that cost less than a can of cat food.”