A town in Aichi prefecture is piloting the scheme, which it hopes will see a decrease in the number of elderly drivers getting behind the wheel.
Drivers aged 75 or older were responsible for over 13 percent of fatal traffic accidents in Aichi in 2016, according to statistics released by the prefectural police and published by Japanese news agency Kyodo.
Shigenori Ariga, manager at the Heiankaku funeral home, told CNN that they've teamed up with Ichinomiya police department to raise awareness about road safety among elderly and their families.
The funeral home operator is offering a 15 percent discount on the cost of a funeral alter for elderly customers who surrender their drivers' license at police stations.
The discount applies to all of Heiankaku's 89 prefecture-wide locations and the police will issue certificates to license surrendees, which serve as proof for the company's discount.
Having a funeral Japan isn't cheap. Ariga says it costs an average of about 1.5 million yen ($13,300), the bulk of which -- 1.2 million yen -- goes towards the funeral alter.
"We have lots of tragic funerals relating to traffic accidents and there is an increasing trend (of) elderly driving," he told CNN.
"So we hope this campaign will help the elderly and (their) families to think that they can return their driver's licenses."
Japan has long faced a rapidly aging population, a demographic predicament which has long fostered economic concerns.
In other Japanese prefectures, license return schemes -- which offer incentives like discounted goods and services to elderly drivers who retire their licenses -- have seen a significant uptick in surrenders.
Japanese authorities are also making it harder for the elderly to get their licenses renewed, issuing cognitive screening tests
to help curb the spate of accidents.
Ichinomiya made headlines last year as the location of what was considered the first fatal accident involving popular smartphone game Pokemon Go. While that incident did not involve an elderly driver, local police are working hard to campaign for road safety.