To be fair and provide a contrast, the other day I visited with a local restaurant marketer for 4 locations who said he was very happy with GroupOn, but only after they learned how to use it properly. In his first campaign, he ran a $40 offer at 1/2 off. Consumers who bought the deal came in, drank water and left without a tip - he knew he lost out on that one. The next time he lowered the dollar amount of the offer to $20 for 1/2 off (covers a bit more than one entree) and consumers readily spent more than the $20 coupon - he was VERY pleased with his result, so much so that he is planning more GroupOn's, which he credits with helping them maintain business during the slower summer months (for him)
Moral of the story - a discounting strategy is not bad, but not as the only tactic to build interest. Used with thought and an eye on what your really trying to accomplish (profitable business), sometimes less is more.