E-coupon: the LOVE, the HATE, … and Ethereum

Digital coupons!

Many people really love them… They love the discount!

Wait — many others actually hate them… Why? Shouldn’t a potential customer always find sweet a 50% discount on his next flight to WhateverCity? And shouldn’t the AirLineNextDoor be also kind of happy to reboot their sales during the low season to an under-performing destination?

Where could any hate be coming from?

Well, of course they are many reasons why people might dislike coupons. Some may be cultural — e.g. “I don’t like advertisements, specially spammy one” — count me in for this one. But I do think many other reasons are linked to the defective way coupons work today and the legitimate suspicion that a paperless coupon is fundamentally not trustable.

In today’s world, most of the time a digital coupon is a dumb code like “JUNESALE” you enter in a text-field during checkout: marketing is still often so low tech… That could explain some hate on the customer side. Who didn’t find an e-coupon that refuses to work at the checkout (the damn coupon-is-not-valid-anymore message)? A bit of trust in the system is lost for every broken promise.

Actually, there is a whole ecosystem of websites that live as parasite on this low-tech, low-expectation and zero-trust dynamic. They harvest digital coupons, fake, expired or real — it doesn’t really matter — to attract lot’s of web traffic and everyone is losing, except them. Merchants are losing opportunity, control and money. Customers are losing their time, patience and money.

Listen to the brands and merchants, they will pile on other complaints. Current digital coupons are not secure at all! They can be copied and sent ad-infinitum: so it becomes impossible to manage who will effectively receive them. More precisely, their mere nature doesn’t allow the concept of “one time” usage e-coupon, which could be a very efficient tool. The personal of modern marketing is lost.

After reading all these critics, you might be dumbfounded to learn that 16 billions digital coupons have been redeemed worldwide in 2015 and that the forecast for 2019 is 31 billions. So here we have a market with a phenomenal growth — digital coupon — a very inefficient and insecure product, and a general lack of trust between its actors : people consuming coupons and the merchants or brands issuing them.

And this is precisely why smart-contracts and Ethereum could fix the failures of the coupon industry and disrupt it. They can bring general security and trust in the system without the need to trust anyone. A coupon — like a Bitcoin — can become a digital object owned by only one person at a time. Merchants will be able to exactly control the supply of e-coupons and their terms. They will have a cryptographic guarantee that a coupon is used only once and is non-falsifiable. Last, users will be protected against early repudiation.

That’s finally a practical and concrete real world use for Ethereum, and it has even the potential to become one of the biggest! I have founded the Rouge Project to build an ecosystem and a platform on top of the Ethereum blockchain so that any merchant could join and issue these new kind of revolutionary smart-contract coupons. Check out our white paper if you want to know more about the project, and contact us if you want to participate.