Note: Descriptions are shown in the official language in which they were submitted.
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ELECTRONIC QUANTITY PURCHASING SYSTEM
This application is related-in-part to Canadian Application Serial No.
2,340,966 filed on
March 15, 2001.
FIELD OF THE INVENTION
[0002] This
invention relates to purchasing systems for retail or business goods or
services, and in particular to an electronic purchasing system that allows a
user to purchase a
quality of a commodity at a current price, lock in that price, and then take
delivery, in whole or
in part, at a later time.
BACKGROUND OF THE INVENTION
[0003]
There are certain goods and services that consumers frequently purchase that
fluctuate in price on a regular basis. These include fuel products; such as,
gasoline, diesel,
heating oil; food products; and a variety of services. Often the price
fluctuations are most noted
in commodity items of widespread consumption such as gasoline.
[0004]
Traditionally, the oil and food industries have provided consumers with a
variety
of advanced cash deposit schemes to facilitate future purchases of
commodities. Some examples
are:
[0005] a) A
prepaid gasoline card (e.g. Mobil, BP, Exxon, Citgo) where consumers
pre-certain pay for a certain value of gasoline e.g. $25.00. This card usually
acts as a gift
certificate and is usually issued to family members, students or employees in
the knowledge that
it can be spent only on gasoline.
[0006] b) A
fuel account at a service station where no credit terms have been agreed. An
advanced cash deposit bond is usually required as security.
[0007] c) A supermarket Christmas savings club.
[0008]
d) A pre-paid in-store deposit account providing supermarket customers with a
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means of controlling their shopping budget and avoid running up a credit bill.
[0009] In the above scenarios, when consumers spend their cash deposits
on goods, they
do so at a price in effect at the time of redemption. There is currently no
method available that
allows consumers to redeem at the price in effect at the time the cash payment
was made. This
is an important distinction because the price of the goods or services may
have moved against
the consumer in the meantime and the worth of the pre-paid monetary value
deposit will have
eroded.
[0010] Some purchasing systems have been introduced in certain industry
segments in an
effort to address some of these issues. Consumers are able to pre-purchase
cellular air time in
quantity terms not dollar terms. Many plans allow a user to buy a phone card
with a certain
number of minutes for a set price. Often this pre-purchased air time is in
lieu of a monthly plan
whereby the user commits to a set monthly fee with a fixed number of minutes
being included
in the fee. These plans are directed at occasional users or users with very
low incomes who are
not willing or able to purchase larger quantities or who require the lowest
cost entry point. As
a result, these plans are typically offered at higher per unit cost than
traditional plans.
Furthermore, as there is little price fluctuation in the price of these
services (cellular air time) the
plans are not designed to protect a consumer against price fluctuations by
banking or storing the
quantity for protection against price volatility.
[0011] Thus there is a need for a system which protects consumers'
deposits against
market price fluctuations and which makes it easy for consumers to pre-
purchase fixed quantities
of goods or services in advance. This need has heretofore not been met.
[0012] In addition to the area of consumer goods and services, there are
many goods or
services that businesses may wish to pre-purchase for later delivery, in whole
or in part. An
example of this is:
[0013] A fleet manager pre-purchases 5000 gallons of diesel for pick up
by his individual
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,ck drivers in 100 gallon quantities at truck stop locations over time. Once
ordered, this 5000
gallon full tanker-load of diesel is physically deposited into any tank, with
available tank
capacity, within the designated truck stop network.
[0014] These will call types of future pick-ups are usually accounted for
in monetary
value on agreed credit terms or against an advanced monetary down-payment. The
physical
product itself (diesel) has to be ordered and deposited into the underground
tanks, which have
a limited capacity. It is administratively cumbersome to pre-arrange for such
types of purchases
and requires a detailed audit trail, real time tank capacity, readings, and
complex billing to handle
this type of pre-purchase.
[0015] In the above example, there is a need for a system that allows the
fleet manager
to pre-purchase a 'full tanker-load' of diesel at the lowest 'full tanker-
load' price, lock-in that
price, and credit an account. At this point, no physical diesel has actually
been delivered but a
quantity is held on reserve that can be redeemed in part or in whole. This
type of system would
allow truck drivers to conveniently draw from a pre-paid reserve account in
smaller fill-ups from
any truck stop in a large network.
[0016] A feature of the system could include seamless integration to
proprietary business
accounting packages which do not readily provide the facility to hold accounts
in quantity units
where the pre-purchased units of goods or services are held on reserve.
[0017] In general, there is a need for a convenient system which allows
both business and
consumer purchasers to pre-purchase commodities in larger bulk quantities at
discount prices,
hold those quantities in a reserve account and redeem, in smaller quantity
increments, at
convenient points of distribution. In this way, businesses will save money by
purchasing large
quantities of goods or services at bulk prices whilst operating under the
usual practical constraints
of redeeming in smaller quantities over time.
[0018] There is also a need for businesses supplying many types of goods
and services
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to offer additional means to establish or increase customer loyalty. Without
systems to do so,
purchasers faced with rapidly changing pricing with respect to standardized
goods or services
will often purchase from the vendor having the lowest price and will not tend
to remain loyal
to one brand vendor over another. This is particularly so when dealing with
commodities such
as gasoline.
SUMMARY OF THE INVENTION
[0019] In particular, the invention seeks to create an electronic
quantity purchasing
system with which users may interface in order to purchase a quantity of a
commodity at a
locked-in current time unit purchase price, establish a bulk refillable
account balance in quantity
units, and redeem at least in part for real product at a future date, at
designated locations, in the
knowledge that the quantity of commodity so purchased is guaranteed against
future market price
fluctuations, and transfer at least a part of the account balance to credit an
account held by
another entity to be redeemed by the another entity.
[0020] An example of this aspect is:
[0021] A consumer pre-purchase 100 gallons of gasoline when pump prices
are
considered low. The same consumer can redeem the 100 gallons in whole or in
part at any one
of a network of retail service stations, at a future time, when pump prices
are higher. The
consumer may also transfer the benefit of the 100 gallons in whole or in part
to another user e.g.
as a gift or as an expense control measure.
[0022] It is a further aspect of the invention to provide an interface
design and interactive
database software to allow consumers and businesses to create an online
reserve account,
purchase or redeem or transfer quantities of a commodity into and from that
account via the
electronic quantity purchasing system.
[0023] Another aspect of the invention is to allow users to pre-purchase
bulk quantities
of commodities at a discounted price and to redeem said quantities in smaller
increments at retail
locations over time or in the future.
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t0024] It is a further aspect of the invention to provide businesses with
the benefit of
significant cost savings made by pre-purchasing in bulk whilst operating under
the practical
constraints of picking up real product in smaller increments at retail
locations. Such constraints
could include the size, shape and nature of the commodity or the capacity of
the pick-up vehicle.
[0025] As an example:
[0026] A fleet manager pre-purchases 5000 gallons of diesel at a favorable
or discounted
'road tank wagon-full load' price and deposits the 5000 gallons into his
corporate gallon reserve
account. The individual truck drivers fill up their vehicles in smaller 100
gallon increments at
any convenient site within a national truck stop network that has access to
the information stored
in the electronic quantity purchasing system. The user's gallon reserve
account is accessed and
the gallon balance is debited online as the truck driver pumps diesel. The
fleet manager benefits
in three ways:
[0027] Purchases diesel at the lowest 'full road tanker' rate.
[0028] Protects the business against future price fluctuations in diesel.
[0029] Substitutes an otherwise convoluted fleet budgeting and accounting
system with
a simple electronic quantity purchasing system with integrated accounting
functionality.
[0030] A further aspect of the invention is to provide an electronic
quantity purchasing
system to provide a mechanism for third party resellers to act as middlemen in
the distribution
of certain types of goods and services typically subject to price
fluctuations. The middlemen
could in effect act as bulk purchasers, in turn reselling to end users. This
would provide
advantages to both the user and the vendor.
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[0031] The present invention relates to an electronic system and methods
for purchasing
quantities of goods or services in advance at current posted prices for later
redemption for actual
products or services at a distribution location.
[0032] An electronic quantity purchasing system is provided that allows
users to carry out
the pre-purchasing of small or large quantities of a specific good or
services, such as gasoline,
at a locked-in price, to credit their reserve account.
[0033] The present invention also describes a method of allowing users to
transfer all or
a portion of their electronic quantity purchasing system account, or reserve
account, to another
user's account.
[0034] The present invention also describes a system that allows users to
redeem from
their reserve account in the future for actual products or services at an
available point of
distribution in order to hedge against future price fluctuations.
[0035] The present invention further describes a system that allows
purchasers to take
advantage of purchasing at bulk prices while preserving the practicality of
picking product up at
various locations in smaller increments over time.
[0036] In one embodiment, the present invention is directed to a method
of transacting
quantities of a commodity such as gasoline where users access an electronic
quantity purchasing
system. The method may include a number of features, such as maintaining a
computer database
system of commodity product information, identifying commodities transacted,
identifying the
posted value or unit price for each product for sale and displaying this value
in the system
catalog, providing each user with a unique secure access code to transact
online commodities,
branding each commodity for sale with corporate ID to promote the identity of
the commodity
seller, providing the user with designated actuation controls for instructing
the system to instantly
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purchase the commodity at the posted price of the product, providing the user
with designated
actuation controls for instructing the system to instantly transfer online
commodity to another
user, carrying out the transaction by verifying all transaction details,
obtaining and recording
financial data for automated payment for the online commodity, updating the
system database,
and instantly reflecting the transaction in the user's account history, and
providing the user with
a redemption means via a unique identifier, e.g. a bar-coded keytag or
magnetic striped & bar
coded card, and/or special point-of-sale communications system in order for
users to redeem their
pre-purchased quantities of commodity at retail locations or other physical
locations in the future.
[0037] According to a further aspect of the invention, the method
includes creating an
account for the user or potential user that can take place as part of a pre-
registration process. In
this way, the registration process can occur on-line or off-line.
[0038] According to a further aspect of the invention, the method
includes the option of
connecting the electronic quantity purchasing system directly to separate and
distinct financial
institutions for real-time credit approval before a purchase can take place.
In this way, instant
automated payment confirmation is carried out, as and when required.
[0039] According to one embodiment of the present invention, a system for
transacting
quantities of a commodity online is provided by a vendor for access by a user
(purchaser), which
system comprises at least one web server computer designed for serving a host
of computer web
browsers simultaneously and providing said browsers with the capability to
interface with the
system, where each browser can carry out a specified transaction of a
specified commodity. The
web server co-operates with a separate database computer, separated from the
web server
computer by a firewall. The database computer is accessible to the web
computer to allow
selective retrieval of commodity information which can include:
[0040] Product description
[0041] Quantity of product to be transacted
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[0042] Current market and/or posted unit price of the commodity to be
purchased (as the
posted price on the electronic system may or may not be the same as what is
considered the
market trading price).
[0043] The web server computer can include custom written interface
software for
transacting commodities in the system database computer by displaying, during
a transaction or
at any other time, the current price of the commodity, providing a designated
user actuation
control for instructing the system to instantly purchase a commodity at the
posted purchase price,
continually updating the price, and continually updating all aspects of the
system display as the
user uses the interface to interact with the database.
[0044] The present invention resolves a complex administrative scheme
that would
otherwise arise in offering consumers and businesses a means of protecting
against future price
fluctuations of frequently purchased commodities. It also provides a simple
and effective means
of allowing purchasers to buy commodities at low or with discounted bulk
prices and then
redeem, in whole or in part, at designated physical locations, at a later
time.
[0044A] A broad aspect of the invention to which this application is
directed pertains to
a database including information about at least one commodity including
quantity units and a
current time unit purchase price; and a web server computer for interacting
with the database
and also for interacting with at least one client computer configured to be
used by a purchaser.
The web server computer is designed to allow the purchaser to: establish a
bulk refillable
account capable of having a balance in quantity units for the commodity;
perform an electronic
purchase transaction that results in the system recording financial data for
payment for the
commodity and obtaining payment approval from a financial institution, the
purchase transaction
comprising the purchase of a quantity of the commodity at a posted and locked-
in current time
unit purchase price particular to a certain purchase zone, the purchase
transaction resulting in
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the purchased quantity being summed with the quantity account balance and thus
an increase in
the balance of quantity units of the commodity in the account; and identify a
redemption zone
different than the purchase zone, the redemption zone identification resulting
in an automatic
conversion of at least a portion of the balance of quantity units in the
account into a different
amount of quantity units available for redemption in the redemption zone, the
system subtracting
from the balance for any quantity units of the commodity that are redeemed.
10044B1
Another broad aspect of the invention provides a system comprising: a database
including information about at least one commodity including quantity units
and a current time
unit purchase price; and a web server computer for interacting with the
database and also for
interacting with at least one client computer configured to be used by a
purchaser. The web
server computer is designed to allow the purchaser to; establish a bulk
refillable account capable
of having a balance in quantity units for the commodity; perform an electronic
purchase
transaction that results in the system recording financial data for payment
for the commodity and
obtaining payment approval from a financial institution, the purchase
transaction comprising the
purchase of a quantity of the commodity at a posted and locked-in current time
unit purchase
price particular to a certain purchase zone, the purchase transaction
resulting in the purchasede
quantity being summed with the quantity account balance and thus an increase
in the balance of
quantity units of the commodity in the account; and redeem at least a portion
of the quantity
account balance in the purchase zone for a quantity of a physical commodity in
a redemption
zone different than the purchase zone, the system automatically converting the
quantity of
commodity redeemed and substracting from the balance for any converted
quantity units of the
commodity that are redeemed.
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BRIEF DESCRIPTION OF THE DRAWINGS
[0045] FIG. 1 is an overview of the system architecture using the
Internet as a preferred
means of connecting information and system components. Depicted are the major
data flow
routes, as begun from one of two points, the point of sale terminal or an
Internet browser.
Electronic Data Transfer VPN's or dial-up computer networks can be used as an
alternative in
areas without web capabilities. In this embodiment a mirrored system is housed
at a location
discrete from both the electronic quantity purchasing system, and daily
offsite data backup is
utilized. Remote access to any part of whole of the system must first be
granted authorization
via the security measures in place at the firewall.
[0046] FIG. 2 is a conceptual map of the possible functions routing from
the first data
flow point, the point of sale terminal. A user will initiate communication
using their personal
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access device (keytag/card). Again in this embodiment all communications
between the point of
sale terminal and the machines that make up the complement of the electronic
quantity
purchasing system are completed via the Internet. A receipt detailing the
transaction executed is
obtained from the point of sale terminal upon completion.
[0047] FIG. 3 is a conceptual map of the possible functions routing from
the second,
alternative or additional data flow point, an Internet browser. This method of
access is location
non-specific. The user will initiate communication using standard web browser
software on a
computer or other Internet-enabled device. Interfacing with the system follows
a linear path in
a drill-down model, where a system navigation bar contains the designated
actuation controls for
each functionality path.
[0048] FIG. 4 is a graphic example of the personal access device
(keytag/card) exercised
by the user to activate communications with the system.
[0049] FIG. 5 is the display shown after actuating the control to
purchase a commodity.
[0050] FIG. 6 is the display shown after actuating the control to
transfer a commodity to
another user.
[0051] FIG. 7 is the display shown after actuating the control to view a
detailed
breakdown of the user's holdings in the system.
[0052] FIG. 8 is the display shown after actuating a control to view all
of the
commodities and products available in the system catalogue.
[0053] FIG. 9 is the display shown after actuating the control to view,
in the most detail,
the description, image, price and code numbers of a particular commodity or
product.
[0054] FIG. 10 is the display shown after actuating the control to modify
contact info,
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mailing addresses or access codes on a user's account.
[0055] FIG. 11 is the display shown after actuating the control to view
the user's entire
account history, including all purchases, transfers and redemptions of the
commodity or
commodities, and details of each transaction. It is displayed in a similar
fashion to a bank
statement.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
[0056] The present invention relates to an electronic system and methods
for purchasing
quantities of commodities in advance at current prices for later redemption
for physical products
at a distribution or redemption location(s).
[0057] The purchasing system provides the user with a convenient method
of making an
advanced purchase of a small or large quantity of one or more commodities via
the system at
the price posted at the time of the purchase. Purchases are credited to the
user's reserve account
and stored electronically on a host computer. The quantity has been pre-
purchased at a locked-in
price, thus allowing the user to circumvent the market price in effect on the
day or at the time
of redemption. The system thus provides a convenient way for the user to hedge
against future
market price fluctuation of a commodity.
[0058] The system includes providing the user with a unique physical
identifier e.g.
bar-coded keytag or bar-coded and/or magnetic striped card. This identifier,
combined with the
Point of Sale and related internet-based system architecture and
infrastructure, allows the user
to redeem all or part of said quantity for real product at a retail location
over time. Such a
redemption will instantly draw down the user's reserve account balance.
[0059] The quantity purchasing system allows a user to transfer to
another user some or
all of the quantity of commodity purchased. The transferee now assumes
ownership of the
commodity and can redeem it in the future at retail locations for the quantity
of commodity so
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transferred.
[0060] The electronic purchasing system allows users to pre-purchase bulk
quantity
reserves of commodities at a discounted bulk price and offers pre-purchasing
of discrete
quantities of specific branded products at the price posted on the system. The
system then
allows users to redeem real pre-purchased product at retail locations that are
connected to the
electronically stored information regarding the user. Their online account
balance is then
instantly debited.
[0061] The preferred communication means for the electronic quantity
purchasing system
is via the Internet thereby providing users with the ability to access their
account at home, at
work, at the point of purchase, or at any other Internet access location,
including wireless access
via handheld devices such as PDA's and cellphones.
[0062] Referring to FIG. 1 an overview of the system architecture using
the Internet as
a preferred means of connecting information and system components in one
embodiment is
shown. Depicted are the major data flow routes, as begun from one of two
points, the point of
sale terminal or an Internet browser. It should be noted from FIGS. 2 and 3
and para [0042]
that the system database is accessible from a point of sale terminal or an
Internet browser for
the purposes of purchasing, redeeming or transferring units of a commodity, or
checking
available account balance. The system database provides information that is
displayed to the
user at the point of sale or Internet browser that includes commodity type,
current posted price,
current market price, and account balance. A detailed receipt is issued the
user upon completion
of the transaction. Electronic Data Transfer, VPN's, or dial-up computer
networks can be used
as an alternative in areas without web capabilities. In this embodiment a
mirrored system is
housed at a location discrete from both the electronic purchasing system, and
daily offsite data
backup is utilized. Remote access to any part or whole of the system must
first be granted
authorization via the security measures in place at the firewall.
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[0063] The method may comprise maintaining a computer database system of
commodity
product information, identifying the quantity units in which quantities of
commodity are
transacted, identifying the unit price or value for each product for sale and
displaying this value
in the system catalog. It should be noted that, as used herein, the
expressions "units" and
"quantity units" do not necessarily refer to specific whole values, and may
refer to any physical
measure such as weight or volume including tonnage, gallons, liters, barrels,
or bushels, or refer
to another measure such as a monetary measure including dollars or euros, or
may refer to any
other desirable system for quantifying the account value for one or more
commodities, and may
be a mix of measurements.
[0064] Accounts are created for the user or potential user that can take
place as part of
a pre-registration process. In this way, the registration process can occur on-
line or off-line.
Each user is assigned a unique secure access code to transact online.
[0065] Designated actuation controls are used for instructing the system
to instantly
purchase the commodity at the posted price of the product. Designated
actuation controls are
also provided for instructing the system to instantly transfer online
commodity to another user.
[0066] Optionally the system can brand each commodity for sale with
corporate ID to
promote the identity of the commodity seller. After a user decides to complete
a transaction,
transaction details are verified, financial data for automated payment for the
online commodity
are obtained and recorded, and system database is updated, instantly
reflecting the transaction
in the user's account history. The method includes the option of connecting
the electronic
quantity purchasing system directly to separate and distinct financial
institutions for real-time
credit approval before a purchase can take place. In this way, instant
automated payment
confirmation is carried out, as and when required.
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[0067] Users are provided with a redemption means via a unique
identifier, e.g. a bar-
coded keytag or magnetic striped & bar coded card, and/or special point-of-
sale communications
system in order for users to redeem their pre-purchased quantities of
commodity at retail
locations in the future.
[0068] The system comprises at least one web server computer designed for
serving a
host of computer web browsers simultaneously and providing said browsers with
the capability
to interface with the system, where each browser can carry out a specified
transaction of a
specified commodity. The web server co-operates with a separate database
computer, separated
from the web server computer by a firewall. The database computer is
accessible to the web
computer to allow selective retrieval of commodity information which can
include:
[0069] Product description.
[0070] Quantity of product to be transacted.
[0071] Current posted purchase price of the goods or service (commodity)
to be
purchased.
[0072] The web server computer can include custom written interface
software for
transacting commodities in the system database computer by displaying, during
a transaction or
at any other time, the current price of the commodity, providing a designated
user actuation
control for instructing the system to instantly purchase a commodity at the
posted price,
continually updating the price, and continually updating all aspects of the
system display as the
user uses the interface to interact with the database.
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[0073] The present invention resolves a complex administrative scheme
that would
otherwise arise in offering consumers and businesses a means of protecting
against future price
fluctuations of frequently purchased commodities. It also provides a simple
and effective means
of allowing purchasers to buy commodities at low or with discounted bulk
prices and then
redeem, in whole or in part, at designated locations, at a later time. (see
FIGS. 2 and 3 and
para [00421)
[0074] Referring to FIG. 2, communication with the system may be made by
a user's
personal access device (keytag/card) as depicted in FIG. 4. Again in this
embodiment all
communications between the point of sale terminal and the machines that make
up the
complement of the electronic quantity purchasing system are completed via the
Internet. The
system database provides information that is displayed (see FIG. 2 and 3) at
the point of sale
terminal. The information includes available account balance, commodity type,
locked-in price,
current market price, and current posted purchase price. A receipt detailing
the executed
transaction is obtained from the point of sale terminal upon completion.
[0075] Access can also be obtained by routing from an Internet browser as
shown in FIG.
3. This method of access is location non-specific. The user will initiate
communication using
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standard web browser software on a computer or other Internet-enabled device.
Interfacing with
the system follows a linear path in a drill-down model, where a system
navigation bar contains
the designated actuation controls for each functionality path.
[0076] On accessing the system, users will be able to perform some or all
of the following
functions as shown in FIGS. 5 to 11:
[0077] Go through a step by step demonstration of how the electronic
quantity purchasing
system works.
[0078] Create their own account with secure User ID and password
protection.
[0079] Purchase discrete quantity units of commodity products using an
approved payment
method.
[0080] Redeem discrete quantities of the commodity within the balance
available.
[0081] View the on-line catalog of commodities, products and prices.
[0082] Create an account for another user.
[0083] Transfer amounts of commodity to another user.
[0084] View the balance of the amounts of commodity in their account and
review their
transaction history.
[0085] View the weighted average unit purchase value of the commodity
remaining in
their account so that it may be compared at any time with the current market
price. (e.g.
motorists will want to know if the weighted average purchase price of the pre-
paid gasoline
gallons remaining in their account is higher or lower than current street pump
price so that they
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may make an informed decision whether or not to redeem).
[0086] Modify all account contact information and access codes.
[0087] View and customize the system interface to reflect corporate
identity
[0088] View and customize the system to intelligently reflect commodities
or products
available within the range of each user.
[0089] In addition to the above activities, the user will be provided with
general
information about the electronic quantity purchasing system, system security
and privacy, and a
customer help line.
[0090] In various forms of the present system, price zones features can be
utilized. The
price of a commodity often varies from region or territory in the country or
within a state, for
example. The reasons for this variance often are due to taxing or regulatory
bodies such as states
or municipalities, or a national government, as well as transportation or
production costs. For
instance, the cost or price of fuel can vary from one zone to another, the
zones delineated by
taxing bodies such as states or municipalities, and/or by governmental
regulations on fuel
composition based on region and season. As another example, one grain or
lumber mill may have
higher production costs than another so that the price of its output is higher
than that of another
mill.
[0091] Components of the price for fuel may vary from zone to zone due to
a number of
factors. Depending on the point of origin for the fuel or its base crude (as
well as for ethanol
component products), the refinery or the harbor factors into the price.
Transportation costs, such
as those due to pipelines, barges, tankers, truck or rail car transport, and
other charges from
source, to refinery or production plant, and to point of purchase, and
shipping charges between
these points, influence the price. Taxes and governmental fees, including
state excise taxes, state
inspection fees of both grade and service pumps, pollution or so-called gas
guzzler taxes, coastal
CA 02634266 2008-06-06
protection tax, and local/county excise taxes variably influence the price.
The price is also based
on point of purchase (retailer or service station) costs, often determined by
supply and demand
conditions but also factoring local business costs such as labor supply (wages
and salaries and
benefits), equipment, lease/rent, insurance, overhead, and state and local
fees.
[0092] The system, accordingly, may be provided with a database or table
that accounts
for the various price components so that a price cost presented to a user of
the system considers
each of these components for a specific zone. The table is periodically
updated, as necessary
and/or convenient.
[0093] The system may utilize the price zone information in two manners.
In a first form,
the system allows the user to purchase fuel for use in a specific zone to
which redemption from
their account is restricted. In a second form, the system allows the user to
purchase fuel based
on a price in a specific zone, while allowing the user to redeem from their
account in a different
zone. In short, to enable the redemption to take place in a different zone,
the system
automatically converts the original purchase quantity into a quantity
available for redemption in
a different zone, using a conversion factor based on the unit price
differential between the
purchase zone and redeeming zone(s).
[0094] As shown in FIG. 5, a user may be prompted to select a zone
(Choose Zone).
Alternatively, the zone may be defaulted so that a user need not be concerned
with this. For
instance, the zone may use information derived from the user's IP address and
ISP that indicates
where the user is located, or the user may have previously input this
information such as by
providing a mailing address and/or zip code. Each price zone has a different
unit price that can
be locked-in at the time of purchase, that price including all the above-
discussed components.
[0095] In the first form, the quantity purchased can be redeemed, at the
locked-in price,
only in the Price Zone chosen. In the second form, the user may convert all or
part of their
pre-paid purchases in the account to a different price zone. This may be done
manually, via the
system, or automatically by a user simply redeeming all or a portion of their
balance in another
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zone, and the system automatically converts the purchase quantities to update
their balance. A
user may prefer the certainty of identifying and controlling any conversion
which would be
permitted by using the system such as in an online environment, or may prefer
the ease of simply
checking their balance at a subsequent point. In a form utilized by a user
purchasing fuel for a
nationwide fleet for instance, the system would first debit the account for
fuel purchases for a
specific zone in which a driver redeems and receives fuel, and the user
provides rules for
selecting which purchases, based on zone or grade or another basis, are then
converted to
compensate for further redemptions in a zone where there is an insufficient
account balance.
[0096] As can be seen on the navigation in FIG. 5, a Convert Zone
function is provided.
The user may use the Convert Zone feature to convert part or all of the
quantity in their pre-paid
account to another price zone. Because each price zone has a different locked-
in price, the user's
account is adjusted up or down depending on the price differential between the
price zones and
the quantity converted.
[0097] FIG. 7 illustrates an example of a user's account by price zone.
In this example,
a user has purchased discrete quantities of Regular Gasoline in four different
price zones,
specifically Manitoba, New Brunswick, Ontario South West, and Yukon, each in
Canada. The
Convert Zone function permits the user to convert some or all of the 110
liters of Regular
Gasoline in the New Brunswick Price Zone into liters in the Manitoba Price
Zone. The user's
account is adjusted up or down according to the unit price differential
between the New
Brunswick and Manitoba Price Zones and applied to the volume converted.
[0098] The Convert Zone feature is preferably incorporated throughout the
system
allowing a user easy access to this feature, as can be seen in FIGS. 6, 8, 9,
and 11.
[0099] The following is presented as a further example of the Convert
Zone feature. On
a day of purchase the price of gas in price zone A is $3.00 a gallon while in
Zone B the price
is $2.00 a gallon. A Purchaser purchases 100 gallons in price zone B for a
fleet of vehicles for
$2.00/gallon. The purchase price is $200.00. Two days later a vehicle in the
fleet needs to refuel
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in price zone A. Before the fuel can be dispensed, the purchaser may convert
the unit/price ratio
so that the amount of fuel to be dispensed can be recalculated to be in line
with what was
pre-purchased. By entering the system of the invention, and selecting the zone
in which the
purchase is to be converted for redemption, in this example from zone B to
zone A, the system
will authorize up to 66.67 gallons to be dispensed, as this is the quantity of
fuel pre-paid for if
the purchase was initially paid for in zone A. Because this is a pre-purchase
system, there must
always be a correlation between quantity and price paid that must be taken
into consideration in
the zone of redemption.
[0100] Alternatively, the system may automatically convert pre-purchased
quantities,
which allows for a user to avoid planning ahead or avoid even the necessity of
recognizing they
have changed zones. That is, another feature of the system is that the Zone
Conversion function
may automatically perform a zone conversion between zones if a user redeems in
a different zone
to the zone in which, or for which, the initial purchase was made. In the
above example, a user
who bought 100 gallons in zone B. If the user were to redeem the fuel purchase
in zone A, the
system would automatically convert the 100 gallons to 66.67 gallons and make
66.67 gallons
available to that user for redemption in zone A, based on the components of
price.
[0101] The system therefore:
[0102] a) Makes the Convert Zone function available to the user to perform
manually in
advance of a redemption.
[0103] or
[0104] b) Automatically conducts the zone conversion function at the time
or after the
time the redemption has taken place.
[0105] Another feature of the system is that when the quantity is purchased
by a user and
the purchase price is locked-in or capped, the quantity purchased may form
part or all of a
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quantity that is hedged using instruments traded on the futures and options
exchanges such as the
New York Mercantile (NYMEX) or the Chicago Board of Trade (CBOT). These
exchanges
typically require a minimum quantity to be hedged (e.g. 42,000 gallons of
gasoline or heating
oil). The system therefore aggregates one or more orders into a quantity that
is able to be price
protected using such instruments or derivatives as futures, options or swap
contracts.
[0106] The value of these contracts is that the future price is protected
for the quantity
purchased if the spot market price rises higher than the contract strike
price. The hedging aspect
of the system therefore minimizes exposure to future adverse price
fluctuations of a price-volatile
commodity by fixing the future price for a predetermined quantity by
establishing a hedging
contract and permitting a price-lock or price-cap feature to be offered to its
users.
[0107] This feature of the system may utilize, for instance, futures
contracts or options
contracts, or both. A futures contract is a firm commitment to make or accept
delivery of a
specified quantity of a commodity during a specific month in the future at a
price agreed upon
at the time the commitment is made. The buyer agrees to take delivery of the
commodity. The
seller agrees to make delivery. Only a small number of contracts traded each
year result in
delivery of the commodity. Instead, traders generally offset their futures
positions before their
contracts mature. A buyer will liquidate by selling the contract. A seller
will liquidate by buying
back the contract.
[0108] An options contract, or simply option, is a privilege sold by one
party to another
that offers the buyer the right, but not the obligation to buy (call) or sell
(put) an underlying
commodity futures contract at an agreed-upon price on a future specified date.
The buyer pays
a premium to the seller for the privilege.
[0109] There are two types of options: calls and puts. A call gives the
holder of the
options contract the right, but not the obligation to buy the underlying
futures contract.
Conversely, a put gives the holder the right but not the obligation to sell
the underlying futures
contract.
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LOii 0] The price at which the underlying futures contract may be bought or
sold is the
exercise price, also called the strike price. An options contract affords the
right to buy or sell for
only a limited period of time; each options contract has an expiration date.
[0111] On the opposite side, a seller, or writer of an options contract
incurs an obligation
to perform, should an options contract be exercised by the purchaser. The
writer of a call incurs
an obligation to sell a futures contract and the writer of a put has an
obligation to buy a futures
contract.
[0112] In this aspect, the system permits a purchaser to purchase
quantities of
commodities, and permits the purchaser to sell at least a portion of the
purchased quantities to
another user or entity.
[0113] The scope of the claims should not be limited by the preferred
embodiments set
forth in the description, but should be given the broadest interpretation
consistent with the
description as a whole.
