A major headache for e‑commerce retail­ers and online shop­pers alike looks set to be con­signed to his­to­ry, thanks to the launch of eCoupon-ver­i­fy­ing start­up, ZenDeals.

A solu­tion for the eCoupon headache

There’s a big prob­lem with eCoupons.  While 88 mil­lion Amer­i­cans used them in 2011 alone, as many as 76 per­cent of them don’t work because they’ve become invalid.  It was a frus­tra­tion like this that led Zen­Deals co-founder Christo­pher Couhault and a group of his bud­dies to hatch their new idea.

He’d been asked by his wife to buy baby dia­pers online, but when he went look­ing for coupons to low­er the price, he could find none that were cur­rent­ly valid.  He and a bunch of friends (all of whom are fel­low co-founders) set about test­ing 30 dif­fer­ent coupons before they final­ly found one that was actu­al­ly redeemable.

The rea­sons why there are so many invalid eCoupons are legion.  Pro­mo­tions linked to spe­cif­ic coupons may expire, they may have been issued by retail­ers as sin­gle or lim­it­ed-use codes that go dor­mant after use, or they might have con­di­tions attached, like only being valid on a cer­tain day of the week.  All of which add up to throb­bing veins in the tem­ples of e‑commerce man­agers, e‑commerce ana­lysts and shop­pers alike.

A giant mar­ket awaits

The firm has spent the last eigh­teen months using the rumored $1 mil­lion+ it raised in seed fund­ing to devel­op tech­nol­o­gy capa­ble of aggre­gat­ing, algo­rith­mi­cal­ly ver­i­fy­ing and deliv­er­ing qual­i­ty, redeemable coupons from dozens of eCom­merce giants to online shop­pers.  Sites include leviathans like Ama­zon, Macy’s, Gap and Tar­get, while investors include (unnamed) exec­u­tives from Face­book and Zyn­ga, as well as Inno­va­tion Endeavors.

How­ev­er, devel­op­ing that tech­nol­o­gy hasn’t been an easy process – hence the 18 month run-in to mar­ket.  But now the Sil­i­con Val­ley based startup’s com­bi­na­tion of cloud com­put­ing and machine learn­ing algo­rithms means that it has been able to val­i­date five mil­lion coupons and codes since beta test­ing began ear­li­er this year.  It cur­rent­ly tests thou­sands every day.  Each coupon is test­ed sev­er­al times a day to make sure the data is still fresh and usable.

Zen­Deals takes a small com­mis­sion from retail­ers and pub­lish­ers for each coupon it ver­i­fies.  But with 88 mil­lion coupon users out there, this lit­tle ven­ture looks set become big busi­ness very soon.