Note: Descriptions are shown in the official language in which they were submitted.
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TRANSACTION BASED AWARD PROGRAM
CROSS REFERENCE TO RELATED APPLICATIONS
This application claims priority from a co-pending U.S. Provisional Patent
Application, filed August 13, 1999 Application No. 60/148,861 in the name of
Frank
Scognamillo for, "TRANSACTION BASED AWARD PROGRAM", the contents of
which are incorporated herein in their entirety for all purposes.
FIELD OF THE INVENTION
The present invention relates generally to consumer award programs, and
more particularly, to an award program based on consumer transactions
utilizing an
electronic payment record (i.e. credit cards, debit cards, smart cards, check
truncation
transactions, and other electronic payment records).
BACKGROUND OF THE INVENTION
There are numerous loyalty and frequent purchase programs in place
today. Virtually every merchant or entity who offers goods or services to
consumers
spends considerable money offering special reward programs or incentives
intended to
encourage consumers to shop more frequently. For example, restaurants, retail
stores,
and travel and entertainment providers offer programs that entitle the
consumer to a
tangible award after making a set number of purchases. The award is based on a
merchant derived formula relating to the merchant's business model and profit
margins.
Some programs are electronically based, many others are manual and require the
consumer to carry merchant specific cards that need to be presented, swiped,
punched or
otherwise used to obtain the award. Unfortunately, many consumers do not carry
these
cards and are therefore unable to participate in the associated reward
program.
Each of these frequent usage programs is a stand alone program relating
only to a single or related group of merchants. Thus, a typical consumer will
have a
number of separate reward cards or accounts for each merchant. The consumer
must
remember to use the cards or related identification numbers when making a
purchase or a
payment to a particular merchant in order to accumulate points related to, for
example,
the amount of each purchase or miles flown with a particular merchant or
company.
One disadvantage of this type of frequent purchase program is that the
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accumulated points or miles may only be redeemed with the particular merchant
or
airline. Thus, while the award redemption at a particular merchant may be of
value to a
consumer, it may take a considerable amount of time and a considerable number
of
separate purchases in order to qualify for an award at each merchant.
An example of one award program is a registered credit card program
involving a group of participating restaurants, in which consumers enroll to
participate.
Each transaction or payment by the consumer using the registered credit card
at any of the
participating restaurants is handled by an organization which is part of the
credit card
bank transaction process. This organization matches the consumer payment to
the
consumer transaction with a participating restaurant and automatically credits
the
consumer with a refund of the transaction value, such as 10%, 20%, etc.
However, tlus
award program is limited only to the group of participating restaurants and to
the use of
registered credit cards.
A major issue in today's consumer market is the conflict between
consumers concerns about privacy with respect to the use of their personal
data, including
their purchasing habits, versus the increasing need for merchants to obtain
current and
detailed consumer purchase information for competitive marketing purposes. As
a result,
merchants have attempted to use a number of information management techniques
to
retrieve and organize this data. However, as sophisticated as these
information
management methods are, such methods do not accurately predict the future
buying
behavior of consumers. Additionally, the sources of consumer information
currently
being used are disjointed. For example, one typical source is a questionnaire
voluntarily
filed out by a consumer when buying a product. The questionnaire provides
broad
categories in an attempt to determine past purchases, income level, hobbies
and interests
of consumers. Unfortunately, only a percentage of consumers actually complete
the
questionnaire, thereby limiting the effectiveness of the data.
Consumers on the other hand typically wish to limit information about
themselves, their lifestyle, leisure activities, and their product
preferences. More
importantly, consumers are becoming increasingly concerned with a common
practice,
used by credit card companies and other entities, of selling consumer
information without
the approval or knowledge of the consumers.
Thus, it would be desirable to provide an award program which addresses
the issue of consumer privacy while still providing a broad, accurate database
for use by
merchants in obtaining information concerning consumers' activities, actual
purchases,
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etc. It would also be desirable to provide an award program that minimizes the
qualifying
activities required from participants (i.e. presenting special merchant
cards), while still
allowing consumers to participate in award programs offered by a wide range of
merchants doing business in diverse industries.
SUMMARY OF THE INVENTION
The present invention includes a method and apparatus for providing a
transaction based award system that brings together a large "pool" of
consumers who
wish to transact business with a large pool of merchants in order to earn
common
currency awards. One embodiment included in the present invention is an award
system
that receives transaction records that include potentially qualifying
transactions between
participating consumers and participating merchants. The merchants may be in
diverse
industries offering different types of goods and services. The award system
processes the
potentially qualifying transactions to determine actually qualifying
transactions that result
in an awards to the participating consumers. The determination is done based
on certain
conditions, for example, whether or not the merchants and consumers are
enrolled in the
program. The award system operates automatically and independent of any
electronic
transaction processing for credit cards, checks, electronic funds transfer,
etc. For every
actual qualified transaction, enrolled consumers automatically receive
benefits from
enrolled merchants in a common currency. As a result, enrolled consumers need
only
have a single enrollment to qualify for awards from all types of merchants
instead of
having individual memberships in each merchant's specific award program.
The included method and apparatus enable participating consumers to
redeem their accumulated currency for a variety of values (i.e. merchandise,
gift
certificates, airline miles or cash awards). For example, a consumer who may
have
acquired award currency based on shopping at gas stations, supermarkets or dry
cleaners,
can redeem that award currency for goods or services at a participating
clothing retailer.
In one embodiment of the invention, a method is provided for operating a
transaction based award program wherein participating members earn awards from
participating merchants based on transactions recorded in electronic
transaction records.
The awards being provided in a common currency and wherein the participating
merchants are not limited to conducting business in the same or substantially
similar
industries. The method includes the steps of maintaining a member database and
a
merchant database that include identification information about the
participating members
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and the participating merchants, respectively, obtaining at least one
electronic transaction
record that describes a transaction between at least one participating member
and at least
one participating merchant, determining that the transaction is a qualified
transaction,
calculating an award value for the qualified transaction, wherein the award
value is based
on a common currency that is common to all the participating merchants, and
accumulating the award value into an award account that is associated with the
at least
one participating member.
In another embodiment of the present invention, a transaction apparatus is
provided that is operable to provide a transaction based award program wherein
participating members earn awards from participating merchants based on
transactions
recorded in electronic transaction records. The awards being provided in a
common
currency and wherein the participating merchants are not limited to conducting
business
in the same or substantially similar industries. The apparatus includes a
member database
that includes identification information about the participating members. The
apparatus
also includes a merchant database that includes identification information
about the
participating merchants. The apparatus also includes a receiver having logic
to obtain a
plurality of electronic transaction records, wherein the electronic
transaction records
include at least one electronic transaction record that provides transaction
information
about at least one transaction between at least one participating member and
at least one
participating merchant. Additionally, the apparatus includes a processor that
includes:
logic to determine if the at least one transaction is a qualified transaction;
logic to
calculate an award value for the qualified transaction, wherein the award
value is based
on a common currency that is common to all the participating merchants; and
logic to
accumulate the award value into an award account that is associated with the
at least one
participating member.
The various features, advantages and other uses of the present invention
will become more apparent by referring to the following detailed description
and
accompanying drawings.
BRIEF DESCRIPTION OF THE DRAWINGS
FIG. 1 shows a prior art credit card transaction system for processing a
credit card transaction between a consumer and a merchant;
FIG. 2 shows the credit card transaction system of FIG. l and includes a
transaction based award system constructed in accordance with the present
invention;
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FIG. 3 shows a basic method of operating a transaction based-award
system in accordance with the present invention;
FIG. 4 shows a detailed block diagram of the transaction based award
system shown in FIG. 2;
FIG. 5 shows a functional diagram of a merchant maintenance module
included in the transaction based award system;
FIG. 6 shows a detailed block diagram of the merchant maintenance
module;
FIG. 7 shows a functional diagram of a member maintenance module
included in the transaction based award system;
FIG. 8 shows a detailed block diagram of the member maintenance
module;
FIG. 9 shows a detailed block diagram of an administration module
included in the transaction based award system;
FIG. 10 shows a detailed block diagram of a transaction processor
included in the transaction based award system; and
FIG. 11 shows a method of operating a transaction based award system to
provide awards to consumers based on electronic transaction information in
accordance
with the present invention.
DESCRIPTION OF THE SPECIFIC EMBODIMENTS
The present invention includes a transaction based award system. The
following definitions are provided to clarify terminology used in the detailed
description
herein.
Definitions
"Members" refers to consumers, both individually or as part of an interest
group that have
agreed to participate in the program.
"Merchants" refers to business enterprises that sell goods or services to
consumers and
that have agreed to participate in the program. Merchants also refers to
businesses
or organizations that conduct non-monetary transactions with consumers but
still
agree to participate in the program to award Members for such transactions.
'_'Network" refers to the combined pool of Members and Merchants interacting
with one
another.
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"PQT" refers to potentially qualifying transactions that are Member
transactions with
participating Merchants without regard to whether the transaction qualifies
for a
discount or reward.
"AQT" refers to actually qualified transactions that comprise PQT's that are
determined
to quality for a discount or reward.
"Currency" refers to the reward value offered to Members. It may be points,
miles,
dollars or any other medium that the Member may exchange for value.
"Registered Card" means a consumer identification number (i.e. credit card,
debit card or
other type of consumer identification record) registered by a Member for
reward
recognition within the program.
"Electronic Transaction Record" refers to an electronic record that includes
information
about the Registered Card and an associated exchange of currency with a
participating Merchant.
"Sponsor" refers to entities that enter into agreement with the program to
facilitate the
acquisition of new Merchants and/or Members.
"Electronic Card Transaction" includes any transaction which generates an
electronic
transaction record of the transaction, including transactions involving credit
cards,
debit cards, check truncation, supermarket saver cards, or direct electronic
payments by Members to Merchants.
"Network Redemption Options" refer to a variety of values (i.e. merchandise,
gift
certificates, airline miles or cash awards) that are available in exchange for
award
currency earn by Members. Each Network may provide a different set of
redemption options that are offered to Members in exchange for Currency.
Credit Card Transactions
Before describing the operation of the transaction based award system
included in the present invention, a brief description of a typical credit
card transaction
including the transfer of the credit card information between various banking
institutions
will be provided.
FIG. 1 shows a diagram of a typical credit card transaction between a
consumer 102 and a merchant 104 and includes participating banks and the
interaction of
data and payment flow.
The merchant 104 is typically associated with a merchant bank 106, with
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whom the merchant 104 maintains various accounts. An acquiring bank 10&
acquires and
processes payment card transaction data on behalf of the merchant 104. The
acquiring
bank 108 sends or receives funds electronically with the merchant bank 106 as
well as
with card associations 118, such as Visa, MasterCard, American Express,
Discover,
Diners, JCB, and/or companies processing private label cards. The card
associations 118
interact with an issuing bank 110 that issued the credit card, debit card or
the like to the
consumer 102.
A Point of Sale (POS) processing institution 112 (clearinghouse) initially
receives all of the electronic card transactions for merchants that are part
of a particular
system or who have signed onto a particular system, with the POS coordinating
and
controlling records of payments between consumers and the merchants. The
acquiring
bank 108 has available to it, as part of its accumulated data records, each
electronic card
transaction, including the account of a particular consumer, the account of a
particular
merchant, and the amount of the transaction in the currency denomination of
the
merchant's choosing. The acquiring bank receives a consolidated file from the
POS
clearinghouse 112 on a daily basis that includes all transactions performed at
POS
terminals (for example POS terminal 116) located at associated merchants.
Simultaneously, transaction reporting system 114 receives a duplicate file of
transaction
information from the POS clearinghouse 112 and provides specialized reporting
of
various information to the acquiring bank and/or merchants. For example, the
transaction
reporting system supplies risk management reporting to help the bank and the
merchant
avoid fraudulent transactions. Also, the merchants receive other reports to
help reconcile
their daily cash receipts. In another section herein, it will be shown how
transaction
information output from the transaction reporting system is usable by the
transaction
based award system included in the present invention.
During a typical credit card purchase the following transactions take place.
The dollar amounts shown are for illustrative purposes only.
1. The consumer 102 makes a purchase (for example, a $100 purchase) at the
merchant's 104 location by entering credit card information at the POS
terminal
116.
2. A request for a $100 authorization is sent to the POS 112.
3. A request for a $100 authorization is sent from the POS 112 to the issuing
bank
110.
4. An approval is provided by the issuing bank 110 to the POS 112.
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5. An approval is provided by the POS 112 to the merchant 104.
6. The POS 112 transfers a $100 payment record to the acquiring bank 108.
7. The acquiring bank 108 deducts its processing fees and transfers a $97
credit to
the merchant's designated account at the merchant bank 106.
8. The acquiring bank 108 advises the card association about the $100
transaction.
9. The acquiring bank receives reimbursement of $98 for the money already
deposited to the merchant's bank account.
10. The card association sends an advice to the issuing bank for $100 that the
consumer has incurred a debt against their credit card account as well as $2
from
the acquiring bank.
11. The issuing bank sends $100 to the card association to reimburse it for
the funds
transferred to the acquiring bank.
12. The issuing bank bills the consumer.
13. The consumer sends a personal check to the issuing bank 110 for $100 to
cover
the cost of the purchase.
14. The transaction reporting system 114 is ancillary to the above process and
is
subscribed to by acquiring banks for risk management reporting and/or merchant
reporting services. These services are an adjunct to the acquiring bank's
business
management practices.
Introduction
The following description. describes a transaction based award system
included in the present invention. For the purposes of clarity, the
transaction based award
system is described with reference to credit card transactions, however, it
will be
understood by those with skill in the art that the herein described award
system is suitable
for use with any of the aforementioned payment mechanisms (i.e. debit cards,
check
truncations, etc.), or any other payment mechanism that utilizes an electronic
transaction
record. Thus, various methods of payment that trigger, becomes part of, or can
be
quantified in an electronic transaction record are suitable for use with the
transaction
based award system. For example, the award system can provide awards to
Members that
make payments using credit cards, personal checks, electronic funds transfer,
debit cards
and even digital cash.
The award system is also suitable for use with other types of consumer
transactions that utilize an electronic transaction record. For example,
businesses,
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consumer groups or other organizations may wish to provide awards to members
for non-
monetary transactions. For example, electronic transaction records can be used
to record
when a member completes specific earning activity, such as visiting a store
ten times in
one year, or refernng customers to a particular merchant. Such electronic
transaction
records are also suitable for use with the award system included in the
present invention,
thereby allowing members to be awarded for non-monetary transactions.
The transaction based award system also allows business (such as
supermarkets or department stores) to register their entire customer base with
the award
system. Thus, customers who shop at such businesses are eligible to receive
award
currency offered by the Network that can be exchanged for available redemption
options
selected by the Network.
Therefore, the award system included in the present invention uses
electronic transaction records to provide a way for registered members to earn
awards for
all types of transaction activity (both monetary and non-monetary) associated
with all
types of merchants, consumer associations, or businesses.
Transaction Based Award System
FIG. 2 shows the diagram of the typical credit card transaction of FIG. 1
and includes a transaction based award system 200 ("award system") constructed
in
accordance with the present invention. The award system 200 couples to the
transaction
reporting system 114 as shown at path 202. Assuming that the merchant 104 is a
participating Merchant, electronic transaction records relating to the
Merchant that are
processed by the POS 112 are transmitted to the transaction reporting system
114,
whereinafter, the transaction reporting system transmits the Merchant's
electronic
transaction records to the award system 200 via path 202. In another
embodiment, the
Merchant sends electronic transaction records directly to the award system 200
via path
204. For example, the Merchant may be a high volume Merchant or may want to
process
electronic transaction records not associated with a monetary transaction.
The award system 200 operates to process the received electronic
transaction information to determine awards for registered Members. Awards
that are
accumulated by each registered Member may be redeemed by the Members via a
connection to the award system, for example, as shown by path 206. The Member
may
also use the connection path 206 to check award balances or perform other
administrative
functions. The connections to the award system may be direct connections or
connections
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via a data network, such as an Internet connection or private data network
connection.
Basic Operation
FIG. 3 shows a flow diagram 300 of the basic operation of a transaction
based award system included in the present invention. One function of the
award system
is to provide awards to Members based on electronic transaction information.
The award
system operates to register Members as shown at block 302 and to register
participating
Merchants as shown at block 304. Next, the award system receives electronic
transaction
information regarding transactions involving participating Merchants. as shown
at block
306. For example, a participating Merchant may sell goods or services to
consumers,
where the consumers use a payment card to make the purchase. A Merchant
identifier,
purchase information and the payment card information form part of an
electronic
transaction record that is transmitted to the award system. At block 308, the
award
system determines, based on the received transaction records whether any
registered
Member will receive an award for any particular transaction. For example, the
award
system analyzes the transaction records to determine if any transactions
involve both
registered Merchants and Members. If so, based on certain conditions
stipulated by the
Merchant, an award for the transaction is computed. At block 310 a database
containing
Member awards is updated to reflect the new award earned by the Member for the
transaction.
Additionally, the award system provides a redemption process, as shown at
block 312, to allow Members to redeem awards or to perform administrative
functions,
such as to check account status. The awards may be redeemed for merchandise,
gift
certificates, airline miles or in some cases, cash. There is no requirement
that the
awarding and redeeming Merchant be the same or that they provide goods or
services in
the same business or industry.
Description of One Embodiment
FIG. 4 shows a detailed diagram of one embodiment of the award system
200. The award system 200 includes a transaction processor 402, an transaction
database
404, a member maintenance module 406, a merchant maintenance module 408, an
administration module 410 and a redemption module 412. The member maintenance
module includes a member database 414 and the merchant maintenance module
includes
a merchant database 416. Although not shown in FIG. 4, other elements of the
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system 200 may have internal memory or have access to external memory to-
store
parameters or other data to facilitate operation of the award system.
The transaction processor 402 includes a transaction reporting interface
418 that has logic to receive transaction records, via path 424, from a
transaction
reporting system, such as the transaction reporting system 114. The
transaction reporting
interface 418 may also receive transaction information directly from Merchants
via path
424. For example, Merchants or other businesses may report transaction records
directly
to the transaction reporting interface 414 via path 424.
The transaction processor 402 couples to the merchant module 408, via
bus 430, to retrieve information pertaining to merchants and merchant
offerings from the
merchant database 416. The transaction processor 402 also couples to the
member
module 406, via bus 430, to retrieve information pertaining to Members from
the member
database 414, for example, to determine if a Member's enrollment date is
before a
particular transaction date.
To perform the award determination, the transaction processor 402
receives the electronic transaction data from the interface 418. The
electronic transaction
data includes a valid Merchant identification number, a valid consumer
identification
number (i.e. "Registered Card"), a dollar amount, and a transaction date, all
associated
with a particular transaction. The transaction processor uses this information
to access
the merchant database 416 to determine if the merchant is currently a
participating
Merchant and to determine what award offers are available from the Merchant.
The
transaction processor also accesses the Member database 414 to determine if
the
consumer identification number is registered with the system. The transaction
processor
then determines if the transaction qualifies for an award based on other
parameters
associated with the merchant account. For example, the other parameters may be
used to
determine if an award is currently being offered for the particular good or
service
purchased, or to determine if a bonus award is being offered. If the
transaction qualifies
for an award, the transaction processor performs all mathematical computations
necessary
to compute the award value. The transaction information is stored in the
transaction
database 404 and the newly computed award is accumulated into the Members
currency
account at the Member database 414.
The Member maintenance module 406 and the Merchant maintenance
module 408 can be accessed, via paths 420 and 422 respectively, to allow newly
enrolled
Members or new participating Merchants to be added to their respective
databases. The
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paths 420 also provides access to Members to obtain account status
information. The
path 422 also provides access to Merchants to allow updating of reward program
parameters. For example, a Merchant may change the expiration date of a
particular
reward program. Members and Merchants may register with the award system by
interacting with the Member and Merchant maintenance modules, respectively, or
by
registering with a third party service that provides the registration
information to the
Member and Merchant maintenance modules via paths 420 and 422.
The administration module 410 couples to the merchant database 408 and
the member database 406 via bus 434, and couples to the transaction database
404 and the
redemption module 412 via bus 432. The administration module is the control
center and
includes logic to allow all the databases to be maintained.
The redemption module 412 is activated only when Members contact the
award system to totally or partially redeem their accumulated currency for the
many
options that are available. For example, Members can contact the redemption
module
412 via path 424 to redeem accumulated currency for the Network redemption
options
that are available. During redemption, the redemption module 412 accesses the
Members currency account located at the Member database 414 and provides an
award
based on a Member selection. For example, the Member may select that the award
be
provided as a gift certificate valid at a selected Merchant. The redemption
module 412
uses various account security measures to protect Member accounts from losses
due to
fraud or other illegal means.
The redemption module includes a redemption processor which can be
programmed to automatically sweep miles to selected airlines (if the Member
has selected
that redemption option). In another Member selection, detailed codes to
identify
merchandise or gift certificates selected by the Member are added to a file
that is sent to
an outside fulfillment house that actually sends the selected item to the
Member. The
redemption processor then deducts the amount of currency used for the
redemption from
the Member's available currency balance.
Merchant Enrollment
FIG. 5 shows a functional diagram of the merchant maintenance module
408 included in the present invention. The merchant module 408 is used to
register new
merchants and update and maintain the records of previously registered
merchants. After
obtaining written permission to obtain access to electronic transaction data
from the
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merchant and any applicable acquiring institutions, the merchant module
obtains a
merchant identifier to associate payment transactions to a particular
merchant. The
merchant module 408 also obtains merchant bank account information pertaining
to
accounts at the merchant bank. In addition, the merchant module 408 can store
various
"demographic information (i.e. address, contact name, contact phone number) to
facilitate
and support merchant relationship management.
During merchant registration, the merchant provides all the information
necessary to mathematically describe award programs the merchant has selected
for
consumers. For example, a standard award program as shown at 502, or a special
award
program as shown at 504. Typically, the merchant's standard award program 502
is
based on a industry segment in which the merchant is involved (gas. catalogue,
restaurant,
retail). For example, a gas station merchant may select a standard program
award of one
mile or point per two dollars of gas or service purchased, whereas a retailing
merchant
could select a standard award of three miles or points per dollar spent and a
restaurant
merchant could choose a standard award of ten miles per dollar spent.
It will be understood that the award referenced in this document is referred
to as Currency as described in the Definition Section of this document. In
fact, the award
system can define any common currency or value indicator for use by all
participating
merchants in a given Network. It is also possible that multiple Nerivorks
could exist, and
therefore, different Networks could choose to use a different common currency
value.
Merchants may also select from different types of "special" award
programs or participation options to apply to member purchases in addition to
the
"standard" program in effect for that merchant. Applicable date ranges may be
specified
on any of the special programs. Merchant administrative databases contained in
the
Merchant database 416 warehouse all information relating to a merchant's
selected
"standard" and "special" award programs. For example, special award programs
may be
established to:
1. Provide an additional award for the Member's purchase;
2 Provide an additional award for the Member's purchase if the total exceeds a
specified minimum amount;
3. Provide an additional award for the Member's purchase on specified days of
the
week; or
4. Provide an additional award for the Member's purchase on specified days of
the
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week if the total exceeds a specified minimum amount.
Eligible Merchants can, on a periodic basic, assign Members to a
"blackout" list that is stored in blackout database 506. Assignment to the
blackout list
will exclude a particular Member from that Merchant's award benefits. For
example, a
Member may be placed on the blackout list and excluded from the Merchant's
award
programs for a set period of time, generally a one year period, or until the
Member is
removed from the blackout list by the Merchant.
A merchant sponsor database 508 keeps track of sponsors that have
referred Merchants to the system. For example, a sponsor that refers a
Merchant to the
system may be eligible to receive a referral service fee or additional fees
for transactions
involving that particular Merchant.
FIG. 6 shows a detailed diagram of the merchant module 408. The
merchant module 408 includes a merchant processor 602 coupled to a variety
individual
databases comprises the merchant database 416. As described earlier, the
database 416
supports merchant services as well as storing the mathematical parameters to
compute
award amounts and to bill the Merchant accordingly. The merchant processor 602
communicates with the transaction processor 402 via the bus 430 and
communicates with
merchants or merchant sponsors via bus 422.
Member Enrollment
FIG. 7 shows a functional diagram of the member maintenance module
406 included in the present invention. During enrollment of a new member,
various
member data is stored in a member database 414. Such data contains a number of
separate inputs that allow several different member identity numbers to be
captured, as
well as demographic information about the Member (i.e. title, full name, full
address, start
date, start anniversary, account status, age group, number or children, sex).
The
demographic information is voluntarily supplied by the Member and such
information is
not required for proper operation of the award system. If there is no
demographic
information, however, the member may not be a candidate to receive special
mailings
from particular participating Merchants.
A member sponsor database 704 keeps track of sponsors that have referred
Members to the system. For example, a sponsor that refers a Member to the
system may
be eligible to receive a referral service fee, or an additional fee for
transactions involving
that Member.
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FIG. 8 shows a detailed diagram of the member module 406, and provides
the individual components involved in supporting member customer service and
award
redemption. The member module includes a member processor 802 and various
member
databases 804. The member processor 802 communicates with the transaction
processor
402 via the bus 430 and communicates with Members via bus 420.
As noted earlier, the transaction database 404 stores all AQTs. Each
record contains the Member/consumer identification number and the Merchant
identification number. Thus, by searching on either or both numbers various
shopping
parameters at a selected Merchant can be tracked. For example, it is possible
to track
how frequently a Member shops at a particular Merchant.
FIG. 9 shows a detailed diagram of the administration module 410. The
administration module includes an administration processor 902 and various
administrative databases 904. The administration module controls how and who
can
make changes to the member database (as part of customer service) and
individual
customer service access levels. The administration processor 902 also
generates reports,
as shown at 906, that can be used to provide transaction summaries or track
system
performance. The administration processor 902 communicates with the
transaction
database 404 and the redemption module via bus 432, and communicates with the
member module 406 and the merchant module 408 via bus 434.
FIG. 10 shows a detailed diagram of the transaction processor 402. The
transaction processor 402 operates to automatically process awards based on a
received
electronic transaction records. In one embodiment, a stream of electronic
transaction
records is received that is a duplicate or shadow file of the transaction
records sent to a
Merchant's acquiring bank. In another embodiment, electronic transaction
records are
received directly from participating Merchants.
Each electronic transaction between a Member and a Merchant is
processed by the transaction processor to determine a match between
information in the
electronic payment record and the account or identification numbers registered
by the
Members and the Merchants in-the program. It is assumed that prior permission
has been
obtained to receive such transaction data, and that the transaction processor
obtains data
only from Merchants who are participating in the program.
As shown in FIG. 1 l, a list of PQTs transmitted to the transaction
processor is received by transaction receiver 1004 via path 420. The PQTs may
be
received from a transaction reporting system, such as system 114, or directly
from a
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Merchant, such as a high volume Merchant like a supermarket that
transmits.records of
transactions by its customers. The PQTs are then stored in database 1006. The
PQTs are
prepared on a daily basis and transmitted to the transaction processor without
regard as to
whether a particular transaction results in an award or benefit to an enrolled
Member. It
'is also possible to transmit and receive the PQTs at other time intervals,
such as twice
daily, weekly or bi-weekly, or any other interval selected by the Merchant.
The PQTs are processed by a validity processor 1008 to determine a list of
PQTs that can be further processed by the transaction processor. The validity
processor
performs operations that check for valid promotion codes, duplicate
transactions and date
checks that verify that the Member enrollment date is prior to the transaction
date. The
PQTs that pass the validity checks performed by the validity processor 1108
are also
checked against a "blackout list" stored in a blackout database 1010 that
contains
information pertaining to the most recent blackout information received from
the
Merchant maintenance module 408. This eliminates PQTs which have information
that
matches an entry in the blackout list, and thereby prevents any benefit
accruing from
those PQTs. For example, the blackout list may identify a Member as a previous
customer and therefore not eligible for a duplicate award, or the blackout
list may identify
a Merchant that is not currently participating in a particular Network.
A qualifying transaction that passes both the validity and blackout tests
will be identified as an actual qualified transaction, or AQT. All processing
of the
received transactions is performed under the control of a processor 1014,
which is also
coupled to the transaction database via bus 1012, and couples to the Member
and
Merchant modules via bus 430.
The processor 1014 stores the AQTs in the transaction database 404.
AQTs between a Merchant and a Member which qualify for an award based on the
Merchant's program's rules and applicable blackout rules are stored with
various
transaction data. For example, such data may include the Merchant and Member's
identity numbers) and credit card, respectively, the Merchant's banking
number, the
amount of transaction, a currency code that specifies the currency, a
transaction
authorization number, a debit card indicator, debit card identity number and
expiration
date, method of transaction entry, bank card transaction reference number,
merchant's
terminal identification number, transaction date and time, transaction type,
transaction
amount applied to member's, merchant's and sponsor's accounts, whether a
standard or
special program identification number was employed, etc.
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A separate merchant activity database, that is located in the Merchant
module 408, is provided for each merchant and used to generate a report to
each merchant
once for a predetermined period, such as monthly. The various data can be
stored in the
merchant database 416 including the merchant's identity number, sponsor ID,
period
ending date, type of period, whether day, week, month or year, the various
payment. card,
debit card, credit card, account, the number of transactions within and
outside of the
program, the number of AQT transactions and the total dollar amount of the AQT
transactions. Also, the number and total amount of blacked out transactions
may be
stored.
The transaction history database 404 that contains information pertaining
to transactions which have been used for redemptions, will be maintained for
immediate
access for a minimum period of time. Summary data at the merchant/month level,
for
example, can be stored for an additional period of time. All AQT data is
stored in long-
term storage to support any research regarding questions from Members and/or
Merchants about missing transactions or Merchant billing issues.
FIG. 11 shows a method 1100 of providing a transaction based award
system in accordance with the present invention. It will be assumed that the
information
describing registered Members and Merchants is stored in member and merchant
databases, respectively, and that such information can be retrieved in
accordance «kith the
present invention as described in other sections of this document.
At block 1102, electronic transactions records are received. The electronic
transaction records represent PQTs that may or may not result in awards to
registered
Members. The electronic transaction records are received periodically from
participating
Merchants. For example, electronic transaction records are received at the
transaction
receiver 1004. At block 1104, the PQTs are stored in a memory for further
processing.
For example, the PQTs can be stored in the PQT database 1006.
At block 1106, a validity check is performed on the PQTs. The validity
check determines whether the information in the PQTs represent valid
transactions and
access the Member and Merchant databases (414 and 416) as shown at block 1108.
may
be needed to complete the check. For example, Member identification and a
transaction
date included the PQTs are compared to a Member database to verify that the
Member's
enrollment date is before the transaction date. For example, the validity
processor 1008
accesses the Member database 414 via the processor 1014 to obtain the Member
enrollment dates for comparison against the transaction dates in the PQTs.
Other ~-alidity
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checks may be performed as necessary to verify that the transaction
information is current
and accurate. In another example, PQTs that do not contain valid Member
identifiers fail
the validity check. PQTs that do not pass the validity checks are not used for
the
purposes of providing an award.
At block 1110, the PQTs that pass the validity checks are tested against a
blackout database. The blackout database contains entries that may match
information in
the transaction records, and as a result, prevent any such transaction records
from being
used to provide an award. For example, the blackout database may contain a
Member
identifier that is associated with a particular Merchant, and may further be
associated with
a particular Merchants offerings. This information may also appear in the
transaction
records, and if so, that transaction record would not be used to provide an
award to the
Member. Information may be placed in the blackout database for a variety of
reasons.
For example, a Member may have already received an award for a particular
purchase.
For example, the processor 1014 receives PQTs from the validity processor 1008
and
information from the blackout database 1010 and determines if any matches
exist. If so,
the Member associated with the particular transaction will not receive an
award for the
transaction.
At block 1112, the PQTs that pass the validity and the blackout checks are
considered to be AQTs and stored in the transaction database 404. For example,
the
processor 1014 stored the information in the transaction database via path
1012.
At block 1114, the AQTs are processed to determine Member awards.
Participating Members in the AQTs are identified and information about
Merchant
offerings is used to compute award values to provide to the Members. For
example, the
Merchant may specify that transactions may be awarded 1 point for every dollar
spent.
Thus, if the Member has purchased a $100 item from the Merchant, the award
would be
calculated to be 100 points. To perform the award calculation it may be
necessary to
access Member and/or Merchant information as shown at block 1116. In one
embodiment, the processor 1014 obtains information about Merchant offerings
from the
Merchant database 416 via bus430. This information is used to calculate an
award value
to be provided to the Member involved in the AQT.
At block 1118, the Member account is updated to reflect the newly
received award. For example, the processor 1014 accesses the Member account at
the
Member Module 406 to update the account with the award. Thus, the Member
automatically receives the award without having to do more than becoming a
registered
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Member.
At the close of business of each day, for example, member awards will be
calculated based on AQT activity in the established programs, i.e., "standard"
or
"special", of the merchants involved in each AQT. Awards will be issued
periodically,
such as each month or each quarter, along with a statement, as cash rewards
via check, as
travel miles to a designated airline program or as gift certificates for use
with one or all of
the participating merchants. The gift certificates are redeemed at a specified
conversion
rate based on the number of miles or points accumulated by a particular
member, such as
a $25 gift certificate for each 2,500 miles or points. Each gift certificate
is redeemable by
the member as payment for products in a merchant's special program redemption
catalog
or, alternately, for any product or service at a participating merchant.
The award provided to Member is based on a common currency that is
common to all participating Merchants. Thus, currency that is being redeemed
by a
particular Member can be redeemed for any of the Network redemption options
offered,
and not just at Merchant which handled all or a majority of the transactions
for a
particular member, such as airplane tickets, etc. For example, points acquired
by
transactions by a Member at various Merchants within the program and exceeding
a
predetermined amount equivalent to a $25 gift certificate, may be redeemable
by the
member for frequent flyer miles, etc.
The above description is illustrative and not restrictive. Many variations
of the invention will become apparent to those of skill in the art upon review
of this
disclosure. The scope of the invention should, therefore, be determined not
with
reference to the above description, but instead should be determined with
reference to the
appended claims along with their full scope of equivalents.
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