Worse, it treats already loyal customers like shit. Oh great there's a Groupon for my gym. Wish I could take advantage somehow; look how cheap it is! Hmm, look at all these Groupon people overcrowding my machines and classes.
You realize that your Gym, not Groupon, decided to issue too many coupons that resulted in the hypothetical crowding situation? That is your Gym's fault.
I actually don't know if that's true or not - do businesses set the number of Groupons available by themselves? I doubt it.
My understanding is that Groupon allows them to set a limit.
Yes, I've read that businesses can set a limit. However, a low limit might discourage Groupon from running their deal.