SAN FRANCISCO - Facing increased competition, daily deal coupon sites like Groupon and LivingSocial are extending far better terms to retailers, who have begun to cool to the marketing strategy, the Financial Times reports.

Bi-Rite Creamer in San Francisco, a popular ice cream store, has been a "prime target" for the daily deal companies, "which have descended on Bi-Rite in droves" in the hope of securing an online coupon campaign, thus keeping a share of sales for themselves. Only Bi-Rite isn??t biting.

"We haven??t done any of [the deals]," said Kirsten Bourne, Bi-Rite??s marketing director. "We typically don??t discount our products."

And as Bi-Rite continues to play hard to get, the daily deal companies strengthen their offers.

"Some have offered to fund the whole deal where we wouldn??t lose any money on it," Bourne said, with "more than one company [offering] to do it for zero percent".

When daily deal coupon site Groupon launched three years ago, it typically offered to share sales 50-50 with retailers. LivingSocial, its closest competitor, launched with the promise of keeping 35 to 40 percent, but a slew of additional players ?" Google, Facebook, AT&T, Yelp ?" is further eroding those margins. Indeed, many analysts believe the industry will settle at an average 20 percent share for the deals over the next 12 to 18 months.

Reduced revenue shares for the daily deal sites are more common, especially among local businesses that have become cultural institutions in their communities, like Bi-Rite. The deal companies have increasingly haggled with them in an effort to differentiate their own business among their competitors.

Google is expected to drive down the typical industry share, as it takes only a 20 percent cut with its new Offers service. And as it has the resources to drive and innovate in daily deals, David Strebinger, founder of deal exchange platform Wantsa, expects it become a dominant player in the future, leaving Groupon behind.