How Blockchain Can Be Use In Loyalty Points System

Blockchain can be used across different sectors it doesn't have a specific sector that is applied. It is a blockchain that can be employed in the finance sector, health, education, marketing, and so on here in this post, we are going to look at how blockchain can be used in loyalty points systems.

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Loyalty Points System

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This is a kind of market strategy that is adapted by the company to encourage their customers to continue making repeat purchases and keep returning the payments. You know when it comes to business there must be an issue of credit sales where a customer would collect goods on credit, but wouldn't be able to pay at the actual time.

For a company not to discourage their customers and to keep their relationship intact, they employ"loyalty program" to encourage their customers to keep paying whatever amount they can pay before making another purchase.

The use of blockchain in the loyalty points system, can enhance the system, and bring about transparency, security in managing and exchanging loyalty points, and efficiency as well. You know in a loyalty points exchange, users are allowed to store and keep track record of all the loyalty points they have so far collected which with blockchain would become more transparent.

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The Key Features Of Blockchain in Loyalty Points System

• Decentralization Ledger: Transparency and temper proof or records of transactions which everyone in the system can see is what blockchain ensures. We all know what the word decentralization means, which in simple words means having no central control. Also, there would be no reliance on third parties to manage the loyalty system.

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• Interoperability: With blockchain customers (users) can consolidate their points from multiple exchanges they prefer. Also, it helps to enable a seamless exchange of loyalty points across various businesses.

• Smart Contracts: Blockchain can be used to automate redemption of loyalty, transfers, and conversation rates of loyalty which can also well enforce efficiency and compliance.

• Security and Privacy: Blockchain users, can have control of their data through the use of private keys since blockchain users have cryptographic security to prevent fraudulent activities.

• Real-Time Transactions: With blockchain there would be an instant update of users' balances and transactions due to the real processing capabilities of blockchain real-time processing.

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How it would work.

Enrollment will be the first stage in which users will be allowed to register in the system and receive a blockchain wallet for royalty points stored. Point accumulation would then be the second stage which customers (businesses) would then be awarded royalty points as blockchain tokens to users based on actions or purchases.

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Exchange/conversation would be the third stage in which users (customers) would be able to transfer or exchange their points using smart contracts. Redemption will then be the fourth stage which in this stage, users can be able to redeem their points for rewards directly through the blockchain system without the need for intermediaries.

The final stages would then be monitoring and reporting which in this stage businesses and customers can view transparent transaction history.