An Architecture for Secure Generation and Verification of Electronic Coupons

Coupons are very useful mechanism for carrying out different marketing management functions like sales promotion, brand promotion, and inventory management. With the advent of Internet shopping and online stores, there is an immediate need for an electronic equivalent of traditional paper coupons. Security issues such as coupon tampering, exchange, duplication and double spending become very important for electronic coupons. Although, the security issues in electronic coupons appear to be similar to those in electronic cash systems, there are significant differences that require the design of a different protocol to carry out secure coupon transactions.

In this paper we describe a system for secure generation and verification of electronic manufacturer and store coupons. The proposed solution is based on a third party centralized coupon mint which carries out the check for double spending, similar to online electronic cash systems. However, unlike electronic cash systems, the coupon mint remains completely unaware of the promotion details (the
amount of discount, product details etc.) and simply provides an infrastructure for online coupon verification. Thus, the coupon mint service can be provided by semi-trusted third parties different from
manufacturers. The proposed system is inherently distributed and scalable. It lets different manufacturers independently choose their own promotion and targeting policies (without involving the coupon mint) and the coupon mint service provider.

The system also offers several new types of coupons like aging coupons, growing coupons, random value coupons, and early bird coupons which were not practical by using traditional paper coupons (and not possible by using the electronic cash protocols).