NFT tech is nothing short of a revolution poised to enhance various existing business structures. This is something that to some, is news, not largely known and to others, sounds simply too good to be true but the reality is that this technology can truly set a lot of things in better places.
At least $148 million is stolen from consumers through gift card frauds yearly. Not a lot of money when compared to investments scams which lead by over $3.8 billion but it's still a significant sum which could potentially increase over time.
The consumer segment of the world continues to suffer a lot from scams in the business world, quite comical enough - all due to structures set up by businesses they patronize. This unending circle of vulnerabilities discovered by bad actors to rob consumers begs the need for protective technology that solves the flaws of existing systems without affecting accessibility and flexibility.
Popularly known for its role in uplifting the Art and Creatives industry, NFTs are positioned to transcend traditional boundaries and deliver innovative use-case for various sectors within.
Enhancing the security of giftcard ownership and trading is one such use-case of NFTs in the traditional business landscape.
Gift cards are a weird invention I must say, the business world sure knows how to get the consumer segment to keep spending money. Creating what we call “gift cards” was pure genius, just as the numerous celebrations that keep getting spotlighted year after year - gotta keep those purses spitting cash right?.
When a person buys a gift card, they essentially pay forward for a good or service. Unlike regular pre-payments, gift cards cater for a diverse market and such a system creates room for long term unredeemed card benefits to the issuing companies.
The business world succeeded in creating a system that lets you pay for a good or service ahead, knowing that some of you will lose those pre-payments proof and end up giving the issuing companies unmerited profits.
Of a surety, this is only one way these companies gain overhead benefits for issuing these cards and that's honestly a story for another day.
Solving Gift Card Frauds and Enhance Trading with NFTs
The problem with gift cards is that they are just soft placeholders of “tokens” that enable the redemption of the purchase value of those cards.
This essentially makes it easy for scammers to create traps for consumers that are difficult to avoid.
Adopting NFTs for Gift Cards adds a crucial layer of security to cards and it can be categorized into two segments: regular cards and soulbound cards.
Regular cards are minted as NFTs, having all off-chain tracking ID assigned to them and redeemable when said NFT gift cards interact with certain smart contracts set up to deliver purchase value of those cards(e.g in-app/platform store credits) and release them from the public markets.
Soulbound cards would function essentially the way with one exception - not being publicly tradable as they can only be redeemed by the addresses that minted them.
The nature of soulbound cards would make it difficult for scammers to attain the cards or their value as that would mean having full access to the wallets that mints them.
For regular cards, the use of NFTs enables these cards to be publicly traded for its cash or purchase value in NFT marketplaces.
This ensures that consumers or card receivers don't fall for fraudulent buyers off-chain and can simply sell on-chain and receive instant payments for cards.
Other incentives or benefits of NFT-powered gift cards would be their effective value in the credit markets. Gift cards can become in-demand collateral for loans or gateways for earning yields depending on the system of finance we would develop in times as such.
Non-fungible tokens are reshaping the way we think about digital assets and real world assets and structures, offering unparalleled security, transparency, and flexibility. By extending their application beyond the realm of art and into areas such as gift cards, NFTs have the potential to revolutionize the retail industry and enhance the overall consumer experience.
NFT-powered gift cards are tech innovations that businesses should explore for the improvement of consumer security.