Model a 3-month 20% promo discount and apply it at billing

What's really being asked

This question evaluates whether you understand how to decouple a reusable business rule from its per-customer application in a billing system. The interviewer wants to see that you can model time-bounded discounts without hard-coding logic into a user record, and that you think about auditability, idempotency, and edge cases like proration or mid-cycle redemptions.

The full answer

A good answer hits four things in order. First, a coupons table that defines the discount parameters, such as a 20% percentage off, a duration of three months, and optional constraints like max redemptions or an expiration date. Second, a promotion_codes or redemptions table that maps a customer to a specific code, tracks when it was applied, and stores metadata like the remaining duration or the original coupon ID. Third, an invoice generation or billing pipeline that looks up active redemptions for the customer, decrements the remaining duration, and applies the discount only to line items eligible for that coupon. Fourth, handling edge cases such as prorated first invoices, pausing or upgrading a subscription mid-discount, and ensuring the discount does not apply after the third invoice.

The mistakes people make

The biggest red flag is adding a discount_percent column directly to the users table with no expiration mechanism, which makes the logic brittle and impossible to audit. Another weak pattern is storing the promo code as a plain string on the user record without referencing a central coupon definition, because changing the terms later requires migrating user rows. A third mistake is applying the discount at the payment processor level only without recording it in your own ledger, which creates reconciliation headaches.

What usually comes next

Interviewers often ask how you would handle stacking multiple coupons, what happens if a user upgrades their plan during the promotional period, or how you would support amount-off versus percentage-off coupons. They may also dig into race conditions when two invoices generate simultaneously, or ask how you would backfill redemptions if you migrate from an old system.

A concrete example

Imagine a coupons row with id promo_20_3mo, type percentage, value 20, duration_in_months 3, and applies_to_all_products true. When Alice signs up with code FALL20, you create a redemptions row with coupon_id promo_20_3mo, customer_id alice, remaining_months 3, and redeemed_at timestamp. During the monthly invoice job, the system selects active redemptions where remaining_months is greater than zero, applies a 20% discount to the subscription line item, creates an invoice_discount record for audit, and decrements remaining_months by one. After three invoices, the redemption is exhausted and the pipeline ignores it.