A warranty solution based on blockchain: groundbreaking and tamper-proof


A warranty solution based on blockchain: groundbreaking and tamper-proof

How we put product warranty and insurance on blockchain, using a Facebook Messenger chatbot

Blockchain seems to be the biggest thing since the invention of sliced bread. Expectations are high and many believe blockchain has the potential to disrupt entire industries, starting with the financial sector. However, what is the added value that blockchain brings to our daily life? How can it contribute to existing product and service experiences, or even better: improve them? The amount of fully developed blockchain solutions is scarce, leaving its impact ambiguous thus far. But how can we capitalize on this new technology in order to take away a pain that exists in an everyday service people use? With this question fresh in mind, we entered an internal three-day hackathon at Deloitte.

Frank van de Ven - 28 April 2016

How we put product warranty and insurance on blockchain

The pain: handling product warranty

After finishing the first day of our 3-day hackathon, we agreed upon a ‘painful experience’ that each of us had experienced at least once: handling product warranty. Ever lost the receipt of a TV that decided to stop working overnight, without a prior notice? Ever found back a receipt you had been searching for hours, only to discover it was unreadable thanks to the ink that spontaneously decided to dissolve? Ever questioned the legitimacy or origins of a second-hand tablet, some fancy speakers or a smartphone that you found on online marketplaces, such as eBay, Amazon or Marktplaats, or Craiglist?

These real-life problems led to the overall design problem:

“How can we design a service that makes activating, using and changing product warranty easier, while being more secure and tamper-proof?”

Three design principles in creating the Minimal Viable Product (MVP)

We defined three design principles, which our to-be service should adhere to:

1.  On-boarding a new user should be extremely easy

Product warranty (and insurance, for that matter) is a rather ‘boring’ matter, like saving for your pension or buying a safety helmet before you go cycling. It’s nothing more than a necessity and only really becomes important when a product is malfunctioning. Therefore, we want to ensure users not to be obliged to any hurdles and make it naturally easy to onboard: ideally in just a single step. 

2.  It should be feasible: ready to implement today, not tomorrow

We’re designing a service that can be implemented and used today. If we truly want to show the potential of blockchain now, we need to solve an immediate problem and be ruthlessly pragmatic and realistic in doing so.

3.  Integrating our service at retailers should not require them to change their existing sales process, nor infrastructure

The ‘core’ MVP: putting warranty on blockchain with minimal onboarding

Our MVP is a very lightweight solution to a heavy problem. It allows users to add information regarding their purchases and associated warranty information on the blockchain, by using a Facebook Messenger bot.

The Facebook Messenger Chatbot functionality was released on April 12th, 2016. It allows companies to program an ‘automated service robot’ that is able to help customers without human intervention, allowing them to receive service instantly.

We’re using a Facebook Messenger for our service because of another important reason: people are becoming ‘app tired’. From the 60+ apps people have installed, they only use a select set of five on average. By offering our service through an existing channel, we are taking away a huge hurdle in engaging new users. Design for existing channels, don’t make force people to come to yours. Now this finally becomes feasible.


This is how it works

The image below shows a little process overview that explains the concept’s components on a very high level. To better understand the context, consider the following scenario (image opens in a new window).

So what’s going on here, exactly?

  1. The user receives a receipt, like always.
  2. Yet this time, it includes a uniquely generated QR-code* that holds all information of the purchased product (item, serial number, date- & timestamp, etc.).
  3. With it, he receives instructions to find the ‘warranty bot’ on Facebook Messenger.
  4. Via an instant message, he can send a picture of the receipt to the warranty bot.
  5. After doing this, our engine unwraps the QR-code and stores all product information on the blockchain.

Easy as that! Your receipt is now safely stored in the blockchain ledger. It cannot be tampered with; nobody can delete or alter its contents, without having the private key. The user can now safely throw away his paper receipt and still be assured of an honest warranty claim handling when necessary.

*We’re using a QR-code so that the retailer doesn’t have to change anything to its Point of Sale infrastructure, other than generating a unique code after payment, printed on the receipt. He’s also not required to fill out any contact details (name, email address or telephone): Facebook is used as the unique identifier.

Viewing stored warranties, directly buying insurance and sell it through integrated marketplace solutions

To view your stored warranties, you go to the unique ‘warranty-profile’. You’ll get a direct link in FB Messenger that sends you to a web based profile, right after the bot confirms your first successful warranty entry.

This profile opens up a whole new world of possibilities:

  • For starters, you can find the newly added product, as well as any previously stored products, giving you a nice overview of your household equipment and their warranty expirations
  • Then, if you haven’t bought insurance at the point of sale, you can still do so now — with just one click. Just browse the insurance options for your specific product and make a choice.
  • When, after a year or so, you decide to sell your product, the blockchain-stored warranty can be seamlessly transferred by connecting to online marketplaces (e.g. eBay, Marktplaats, Craigslist or Amazon), through a plugin or api. This ensures optimum safety for both you and the buyer. No more disputes about receipts.
  • Finally, you could even go one step further and view your products’ history. This shows the asset’s mutations on blockchain, giving an honest, transparent view of previous changes made to your product, such as warranty extensions and ownership changes.

A brand new day for customers, retailers, insurers

Will blockchain indeed disrupt entire industries? Yes, we believe so. Its possibilities are virtually endless: the ability to store assets in a safe and secure, tamper-proof way, opens up a whole new world for financial institutes, retailers, governments and other industries. What we’ve learned from our hackathon only underlines this belief: we were able to create a functioning blockchain MVP that could potentially make a great impact in its industry. If we had been exploring a different theme, its impact would have been just as big – it’s all about finding added value and translating it to customer and business value.

Our particular MVP could disrupt the way we track and handle warranty and insurance claims, sell products secondhand and buy additional insurance for our brand new products (this product can be anything, from an electronic device to a car). The business potential for new use cases and revenue models is high. Consider the following possibilities:

  • Buying extended warranty and/or product insurance after receiving a notification about the expiration date of your warranty
  • The user gets complete overview of purchased consumer goods with warranty. As such, it resembles his or her complete household, making it easier for insurers to estimate the total value and monthly fees. As such, it acts as a ‘digital vault’
  • This digital vault would be of immense value to the retailers, banks and insurers: it would allow them to recommend product deals, product combinations and various kinds of insurances
  • When users buy a new camera, the system detects the ‘old one’ being still present in the list and sends a push notification/recommendation to sell it on an online marketplace
  • The insurer (or even a bank) could offer this service in its current app as a plugin (perhaps by means of a widget), thus offering all of its services under one roof for the end user.
  • Viewing product history is really a recording of everything that happened to the product. This creates an enhanced product-buyer relationship and increases business transparency (e.g. for retailers and suppliers)
  • Retailers can extend the chatbot by developing automated services for it (e.g. product offerings, tips & tricks, product updates, etc.), without having them to download a dedicated app

Currently, our MVP is a white-labeled solution (which means that it’s not branded). This service could be provided by an insurer, a bank or a large retail chain (e.g. Amazon) or even by a combination of these parties. Most notably it will be very interesting to see how this space unfolds for insurers, over the next years. On a similar note, the Facebook Messenger interface is interchangeable for any other (existing) channel, such as WhatsApp, a banking or insurance app or even a dedicated website.

To go short, we think that the combination of blockchain and an instant messaging bot creates a solid, safe and transparent solution on one hand, all while keeping a friendly, low barrier user experience on the other.

If you want to know more about how to run a hackathon, if you would like to see a demo of our MVP or are interested in co-creating and improving this with us, please let us know. We’d be very interested in making this solution tailored for you.

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