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The Downside of Social Coupons

Social coupons can appealing--but make sure you're prepared to handle the rush of new customers they can bring.

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This story appears in the April 2011 issue of Entrepreneur. Subscribe »

Make sure you put realistic caps on the number of coupons sold and apply expiration dates or blackouts that won't work against your best interests.

Social coupons--those offers from Groupon, LivingSocial and the rest that hold out big discounts if a set number of web users opt in to purchase them--make me think of efforts to split the atom: If handled improperly they can melt down, leaving nothing but a big hole in the ground where a lead-gen campaign used to be.

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