How to apply customized discounts with a loyalty app?

[ZainSohail]

Hello,

So we are developing an App for a external Loyalty Platform. I'm not sure what is the correct way to apply a customized discount to a cart against loyalty points. 

UX Behavior:

1. A popup appears when a customer clicks on checkout button
2. Customer Inputs their loyalty email and PIN.
3. We check loyalty points through the platform API and apply discount if its applicable.

Now, as I understand that I have to create a custom discount coupon for the customer and apply to the checkout but is there a better way of doing this? Because as I see with this approach we could end up with many unused discount codes on backend.