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Groupon Nightmare: Baker Almost Goes Bankrupt Filling Discount Orders

It seemed like a good idea to drum up business for her small bakery -- offer a Groupon deal. Well, the deal almost left her bankrupt.

The Daily Mail reports on the tale of Rachel Brown, owner of "Need a Cake" in England. She recently went on Groupon and offered a dozen cupcakes for $10. That's a 75% savings off of the regular price of $40.

Brown was expecting just a few extra orders; instead 8,500 customers took her up on her offer. She had to up production from her usual 100 cakes a month to a staggering 102,000.

"Without doubt, it's the worst ever business decision I have made," Brown said. "It's been an absolute nightmare."

Brown had to hire an extra 25 people to go along with her full-time staff of eight. It all cost her nearly $20,000, wiping out an entire year's profit.

"I've been running this business for 25 years and I thought I knew what I was doing, but this offer wasn't everything it seemed to be," Brown claimed.

A Groupon spokeswoman said this was the first she heard that Baker was having problems, saying the company had been in "constant contact" with her. Brown denies this and said she has a history of correspondence to prove it.

Either way, don't look for any future deals from Need a Cake on Groupon.

"We are still working to make up the lost money and will not be doing this again," she said


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