Blockchain technology is often promoted as a solution for applications that could be handled just as effectively with conventional databases. However, coupon management presents a use case where blockchain can provide distinct advantages. By creating a shared, tamper-resistant record of coupon issuance and redemption across manufacturers, retailers, clearinghouses, and other participants, blockchain for coupon management could improve visibility, simplify reconciliation, and help prevent duplicate redemptions. The Coupon Bureau’s use of Hedera Hashgraph demonstrates how distributed ledger technology can address challenges within a complex ecosystem while also highlighting that blockchain alone cannot eliminate every form of coupon fraud.
Most blockchain announcements describe solutions that should use a cloud-based database because they fail to leverage the attributes that make blockchains unique. One perfect fit was the IBM Hyperledger solution that tracks food from farm to store shelves. Now comes another, tracking the issuance and redemption of coupons across multiple manufacturers, stores and points of redemption.
This resembles the Amex pilot that used blockchain to track the earning and burning of Amex points. However we hope The Coupon Bureau recognizes that while the ledger is immutable and prevents double spend, it won’t stop every type of fraud; in fact it could spread counterfeit coupons far and wide should they find their way into the system:
“The Coupon Bureau (TCB), a non-profit, industry managed coupon data exchange technology platform that works with many of the largest consumer product goods (CPG) manufacturers and others in the retail ecosystem, announced today that it is using the Hedera Consensus Service (HCS) from Hedera Hashgraph to provide a real-time, tamper-proof log for all coupon events on its platform. This will allow coupon providers, manufacturers, clearinghouses, and retailers the ability to validate in real-time when coupons are registered and redeemed on the platform, without having to trust any single party.
“The Coupon Bureau is doing important work to provide the industry with connectivity to a shared database that will house all distributed, serialized coupons available for redemption,” said Brandi Johnson, CEO of The Coupon Bureau. “TCB’s platform will enable real time validated, retailer agnostic manufacturer coupons to support smarter and more strategic campaigns, mitigate fraud, and simplify the redemption and reconciliation processes. TCB’s offering will support all stakeholders in the coupon ecosystem while maintaining their current business models and enabling growth. We are thrilled to integrate the capabilities of the Hedera platform.””
The Coupon Bureau’s initiative illustrates a practical application of blockchain technology where multiple independent parties need access to a trusted record of transactions. A real-time, immutable ledger could make coupon validation and redemption more efficient while reducing opportunities for double spending and simplifying reconciliation among manufacturers and retailers. However, blockchain for coupon management is only as reliable as the information entered into the system. Counterfeit or fraudulent coupons that successfully enter the ecosystem could still create problems, underscoring the need to pair distributed ledger technology with strong validation and fraud prevention controls.
Overview provided by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group.
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