In a bid to improve customer retention, and get a greater hold on serial cheapskates, group buying giant Groupon is testing a loyalty program in the US called Groupon VIP.

Last Wednesday the company sent an email to select members of its database to invite them to trial the VIP service for a three month period, the Chicago Tribune reports.

The program, which will cost $30 per year after the trial period expires, gives members early access to deals, the ability to buy previously sold out or closed deals and the luxury of anytime refunds, allowing members to swap unwanted or expired deals for Groupon dollars.

LivingSocial, who ranked second in terms of market share in Australia last year (see our group buying infographic for a 2011 market wrap), has been testing a similar service in the US since November.

Dubbed LivingSocial Plus, the loyalty program costs $20 per month and comes with similar features to Groupon VIP, but with the added benefits of VIP events and $5 LivingSocial dollars awarded per month.

Senior research manager at Telsyte, Sam Yip, says the loyalty program is a smart move from Groupon.

“Last year was all about acquisition for the large companies who spent a lot of money trying to get people to their site,” Yip says.

“This year will be all about loyalty, recognition and providing targeted deals to give consumers more control.

“Groupon VIP addresses all these points and is a compelling reason to stay with Groupon.”

Yip also comments that offering customers returns for unused or expired deals is generous on the part of the company, which is dependent on its merchants to supply the services it sells.

Yesterday, competitor site Scoopon who ran a deal for Air Australia in July, forked out $1 million to reimburse stranded customers after the airline collapsed.

Groupon also announced more social features and personalisation options, the Tribune reports, including allowing members to save multiple locations, such as home or workplace, and thumbs up and thumbs down buttons so the service can start collecting information on the types of deals users like.

Groupon’s chief executive, Andrew Mason, reportedly told investors at a conference in California last week, that personalised deals will roll out to non-US subscribers later this quarter.

According to Mason, the tweaks will “help to remove some of the worst infractions in our deal selection for users that don’t want to receive certain types of deals”.

Mason also hinted at more features to share deals via social media, “We have not done nearly as much as we can or will to leverage social. There’s sharing that happens naturally, but there’s not a lot of functionality that you would look at built into Groupon and say, ‘That feels like a very social feature.’ So you can expect more of that from us.”