Within the community currency world, the term bonus refers to a premium paid to those who exchange legal tender for a community currency. Typically, bonuses take the form of a gift, issued in the community currency, added on top of the amount exchanged.
Bonuses act as incentives to attract new users or to retain existing ones. Malus is the opposite of bonus – typically a charge on the conversion back into legal tender – and is a straightforward way of financing the bonus system.
# Pros of a bonus and malus - Bonuses can encourage users to sign up to the currency - Incentivises the purchase of more community currency - Incentivises businesses to find spending options for the currency they receive instead of changing back to national currency - Can generate income for the currency project or charitable causes
# Cons of a bonus and malus - Businesses are discouraged from joining by the cost of conversion - Adds a layer of complexity to understanding the operation - Bonus can make the currency look like a commercial scheme - Public sector partners might not be able to accept the malus and not participate in the currency