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Through sites like Savings.com, traditional coupons still have a draw online

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If you manage to clip through all the hype surrounding discount offerings from GroupOn and Foursquare, you’ll find that websites that offer online coupons are still hot spots for budget-conscious shoppers.

Savings.com is one of the Web’s go-to sources for coupons. Its database contains some 30,000 deals from 5,000 merchants, Loren Bendele, Savings.com’s co-founder and general manager, said over coffee last week. (We paid full price because his site didn’t have a coupon for the cafe where we met.)

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Through Savings.com, for example, Verizon Communications offers a coupon to get $50 off a Droid X smart phone, and Orbitz has one for 10% off hotel bills.

The L.A. company earns 98% of its revenue from visitors clicking on coupon codes, Bendele said, and has been profitable since late 2007, just months after it was formed. The private corporation raised $4 million in funding in September 2008.

‘We haven’t touched it yet,’ Bendele said of the cash.

Savings.com has 80 employees, and about 30 of them spend their time scouring the Internet for coupon codes not already on file. The company also enlists volunteers, called ‘DealPros,’ to search in their free time. Then their findings are verified before the codes make it on the site.

That’s a different approach from RetailMeNot, a more popular site for finding coupons. Anyone can submit a discount code and then users try them out, reporting back on whether each coupon works.

RetailMeNot won a lot of fans early on. It’s made by Oregon’s Stateless Systems, which had a prior hit with BugMeNot, a service that would access websites that require registration.

Because of its crowd-sourcing model and greater popularity, RetailMeNot has some coupons that Savings.com doesn’t. For example, some retailers provide discounts exclusively to members of an organization or to a podcast’s listeners, and those can make their way onto RetailMeNot whether the store wanted them to or not.

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But that open nature equates to a lot of bogus or expired codes. Bendele of Savings.com believes consumers will eventually get fed up with the trial-and-error.

‘We don’t have any deals on our site that don’t work,’ he said.

Because Savings.com deals directly with many retailers to ensure coupons are accurate, Apple, Dell, Gap and Travelocity count the site among a small group of their exclusive discount listers, Bendele said.

Other sites have recognized the success of Savings.com’s database. Search engines Yahoo, Citysearch and Mahalo are partners, and pay to access and redistribute data from Savings.com’s system.

The company is preparing to announce that, since its debut in March 2007, the service has saved consumers $120 million. Just in time for National Coupon Month, the decidedly unofficial holiday established by the Promotion Marketing Assn. Educational Foundation.

GroupOn may have all the excitement and a great success story. But Savings.com has a bigger archive of coupons and is adding a lot more than one new deal a day -- including GroupOn’s daily offers.

‘People aren’t loyal to GroupOn,’ Bendele said. ‘Wherever they can get the best deals, they’ll go.’

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-- Mark Milian
twitter.com/markmilian

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