NFT (Non-Fungible Token) coupons offer compelling advantages over traditional paper or digital coupons. Before you jump into implementing an NFT coupon system, here are some questions you should be asking.
Why should I use NFTs as coupons rather than digital coupons?
Setting up a traditional digital coupon or voucher system often comes with capital expenditure, such as the cost of purchasing hardware and software. You need to acquire hardware to scan the digital coupons and software to process them. Some retail owners are lucky where their existing POS (point of sale) systems come built-in with a couponing feature but that usually comes with a premium price or for large retail outlets.
Some coupon aggregators require users to download their specific mobile apps to use the Web2 coupons. This can be a hassle for your customers.
With NFT coupons or vouchers, small business owners may use existing blockchain infrastructure and existing blockchain wallet which is free to use by you and your customers. The only cost is gas fees used to mint and burn the coupons on blockchain. But with multiple blockchains offering gas fees way below one cent, your return on investment (ROI) would be quick and sweet.
Your NFT coupon holders can use their existing blockchain wallets to redeem their coupons. This makes it super convenient for them.
Are NFT coupons prone to hacks or scams?
No. In fact, traditional paper or digital coupon systems themselves are more prone to hacks. These hacks can be performed by hackers or employees – someone who’s in charge of issuing the coupons or someone with access to the system – since coupon codes are stored in a centralized database.
Sometimes due to the carelessness of staff, coupon codes get leaked.
At least where I work, after it’s successfully tested in quality assurance it’s tested in production before going live,” one commenter wrote. “Could just forget to deactivate test. – Daily Dot
With NFT coupons, each coupon is stored in a blockchain wallet. There’s no centralized system that keeps a copy of the coupon.
Regarding scams, it’s absolutely easier to conduct a coupon scamming operation using paper or online coupons than blockchain coupons. Because Web3 coupons are stored in wallets connected to a blockchain network, and each smart contract that issues the coupons can be quickly verified.
How could I delete a used coupon or voucher from a blockchain if its data is immutable?
Even though data in a blockchain is immutable, tokens such as NFTs can still be deleted. This is a normal process called burning tokens.
Could I delete an NFT coupon in a person’s wallet?
Yes, absolutely. Below is a video showing how it is done. Since each NFT coupon is issued by a smart contract and a contract is a piece of software written in programming code, a smart contract developer could program the coupon contract to delete the tokens upon given the right instruction.
If NFT coupons are stored on a public blockchain, how could I hide my coupon codes?
It is not necessary to hide the data because you only need to ensure the person redeeming the coupon is the legitimate owner of the wallet containing the Web3 coupon.
Even though a fraudster could download your original coupons from the blockchain and replicate your smart contract to issue the counterfeit coupons, the contract address used will be different than your original contract address. During redemption, your store or restaurant employee only needs to ascertain that the customer is using an actual wallet mobile app (such as MetaMask) instead of flashing a screenshot and that the coupon was issued from your smart contract address.
How to conduct NFT coupon redemption online?
Online NFT coupon redemption would prove to be more convenient and secure to perform. All the customer needs to do on your website is connect their wallet containing their blockchain coupon. Your website should be able to detect if the wallet contains the necessary coupon and then redeem the coupon accordingly. Your customer doesn’t even need to remember the coupon code!
Can I prevent coupon transfers with blockchain coupons?
Certainly. In fact, there’s a type of NFT called SBT which stands for soulbound tokens. This unique format prevents any transferring of NFT from a user’s wallet. Essentially, it makes the NFT bound to the soul of the wallet user.
Once you have distributed your SBT vouchers or coupons to the wallet addresses of your customers, they will not be able to transfer these soulbound coupons to their friends or loved ones. They can’t even resell it.
Could they transfer the coupons by giving away their wallet private keys?
Yes, they could. But that would mean they are giving away all their other assets in the wallets. This is akin to giving away your physical wallet containing your cash, credit cards and IDs to someone else.
But one could argue that a highly motivated reseller could transfer out all their other assets while keeping the SBT coupon in the wallet if their aim is to resell these coupons. It’s possible, but then again, each transfer of an asset would require gas fees so this is an additional cost that they must bear.
To further prevent the transferring of NFT coupons, you could issue an SBT identity to each wallet. This ID is non-transferable and will stay permanent in the wallet, hence discouraging the reselling of the entire wallet.
Do my customers need to own cryptocurrency to use NFT coupons?
No. They do not need to own any cryptocurrency nor do they need to use their crypto tokens to receive or use the Web3 coupons or vouchers issued by you.
What is the expected cost to implement an NFT coupon system?
Here’s what you need.
- Smart contract – Free, because it’s open source. You can easily generate your own NFT smart contract (ERC721). Or you could use smart contract tools like Mintnite to create your smart contract and issue your NFT coupons without coding.
- User Interface (UI) for smart contract – Low cost. You could hire a freelancer developer to build a plugin for your website. Or use free tools like Mintnite to issue, transfer and delete coupons.
- Blockchain wallet – Free. Virtually every wallet available in the market is free of charge. The most popular wallet is MetaMask.