Groupon is known for its app that offers a daily deal with a steep discount based on your location. This week the coupon company expands its service with Groupon Now which offers immediate deals that are only good for a very limited time such as a few hours or for one day.

The idea is to give merchants better flexibility in offering deals. The core Groupon service offers a deal with a long expiration date. Many local businesses have discovered that many of those purchasing the deal show up on the last day, overwhelming their establishment.

With this new service, a small business can offer a deal to attract customers during slow hours and then pull the promotion when business picks up again. This is especially useful for restaurants, hotels and other establishments that see a large ebb and flow in customer during the day or week.

Merchants now have access to a new screen on their Groupon account that allows them to set up these new real-time deals if the service is available in their area. Consumers who accept an offer will get a bar code that the merchant can use to redeem the deal via their cell phone’s camera.

The Groupon Now function is only available in Chicago right now with plans to expand to other cities over the coming weeks and months.

[Disclaimer: Sprout Social has financial ties to Groupon.]