Groupon has been getting a lot of viral attention lately, good and bad. First the news that they sold $11 million in $25 coupons (worth $50) on a promotion for The Gap, then a story of woe from a café that couldn’t handle the deal they made with Groupon (only $6 for a $13 value), neither on the front nor back end. No problems for the former that can handle the volume and probably (Groupon doesn’t advertise their split) made over $5 million in up-front cash on the deal. The latter, however, had problems paying the vig on what amounted to a high-interest, short-term loan. So is this online retail darling a godsend for struggling restaurants, or is it little more than high-tech loan sharking?

If you haven’t heard of it yet, Groupon is a wildly successful discount coupon company, offering a daily deal in your area by email, Facebook or Twitter. To take advantage of the offer, you purchase a coupon from Groupon at a discount of the face value (usually 40%-60%) and, if enough are sold, you can redeem it at the local retailer, often a restaurant, within the next few months.

Sounds great, right? As a consumer I definitely agree; my favorite cost is less or free. I recently bought a Groupon for $25 that is worth $50 at The Gap. And I wasn’t the only one – they sold more than 400,000 of them. I often purchase them for local restaurants. As a restaurant owner, however, I would seriously question the decision. Not only does Groupon take a hefty split, but they do not share the purchasers’ information, cutting of a vital lifeline to leads for future marketing efforts. I can see why they are said to be valued at over $1Billion – a recent study estimates that an email address alone is worth $948 in potential revenue, and they apparently have 18 million of ‘em.

But back to the loan-shark quip. A typical deal at a decent restaurant in my area is to pay $35 for $70 worth of food and drink (tax and tip not included). I had dinner a few nights ago at The Foundry on Melrose with that exact Groupon.

As you can see, 1565 of them were purchased. If the split was 50%, that means Groupon and The Foundry each made roughly $27,000 up front. This is probably nice for both parties, and many of these deals sell 2000-4000 units. One of the difficulties for the restaurant, though, is that they now must honor the Groupons that can be worth over $100,000. Even if their cost of goods and services is only 50% of the value, they are paying back a loan of $27K with $55K.

Now I know it’s not exactly a loan, and I’m sure most restaurants would welcome 1500 patrons over the next few months. I would like to know if any of the restaurants have data on the number of new clients, return clients, follow up visits, etc. One of the flaws that I see happening when the database is overlooked, is that there is rarely any follow up. Of the several restaurants where I have used a Groupon, only one had the systems in place to follow up with me, and I was happy to fill out a nice card with my email address and Twitter and Facebook handles. Looking at it from another perspective, in this example they are paying Groupon $27K for one-time access to a database instead of spending resources to grow long-term relationships.

I really enjoyed my time at The Foundry; great food, great service and I spent an additional $125 with tax and tip because I wanted the Chef’s Tasting Menu. I even had a nice, casual chat with the chef, Eric Greenspan, about the restaurant business in LA and NYC. I will take the time to follow up with him and his restaurant through social media and in-person, but if they would have ensured it there would be no danger of it slipping my mind.

Props to Groupon for making good use of social media resources. I don’t wish them any ill will, but restaurants could cut them out as middle men and manage a campaign through social media that would be more effective. One idea that comes to mind is to build a network of a few thousand fans or followers and regularly incentivize them. With location and time-sensitive deals, both sides would be engaged. Granted, this does not put $27,000 in their pocket today, but the $100,000 doesn’t leave their pocket as quickly either. More important, though, is the connection with the client. Building relationships with repeat diners. Oh, and database ownership.