Are you losing money on the Groupon customers that are not coming back? If so, then I think you are right and Groupon is not for you. It seems your margins are not wide enough or your material costs and labor are too high to support this kind of marketing. In either case you have assessed your experience and decided that this is not the right fit for your style of business. I completely respect that. When you were running Groupons, did you get contact information from the customers and follow up with emails or newsletters?(weird... for some reason when I hit "reply with quote" I don't see the quote in the edit box... bug?)
Anyhow: I don't consider a Groupon buyer to be a "customer" unless they come back and pay full price. A majority of my Groupon customers are one-and-done; I see them for the deal, then never see them again. I have a couple that show up consistently when I do a deal, but never darken my door at any other time. I can probably count the number of good, repeat customers that we've gotten via Goupon and the like without taking my shoes off. I'd say maybe 1 in 50. Viewed this way, the customer-acquisition cost goes from $80 to $4000.
That's why I don't do these deals anymore.
Once again, from what you are saying I am guessing that you have not run Groupon in at least a year, because the deals are no longer structured the way you describe. A Groupon customer will not get a second email for the same business. It is also more of a long term subscription type of format now so that the orders come in slowly over time.
Like I keep saying Groupon is not for all businesses, but it does not destroy all businesses either. My business has been thriving with this type of marketing for three years now. If it was going to put me out of business it would have happened by now.