Note : Les descriptions sont présentées dans la langue officielle dans laquelle elles ont été soumises.
CA 02546151 2006-05-09
METHOD, SYSTEM AND COMPUTER PROGRAM FOR PROVIDING A
LOYALTY ENGINE FOR DYNAMIC ADMINISTRATION OF CHARITY
DONATIONS
Field of the Invention
This invention relates to creation and administration of loyalty reward
programs. This
invention relates more particularly to creation and administration of loyalty
programs
linked to charitable donations.
Background of the Invention
Numerous customer loyalty and customer acquisition programs are known.
Customer
acquisition systems also play an increasingly important role for business.
Linking charitable organizations with customer loyalty and customer
acquisition is
known.
For example, COMMUNITY SMARTTM makes credit cards available, wherein
specified donations are made to a charity of the customer's choice.
Other examples include KIDS FUTURESTM and UPROMISETM. These prior art
solutions provide co-branded financial cards with a charity as a partner,
which are
issued to a customer who uses it and the charity shares in the applicable
interchange
fees.
It should be understood that in this disclosure the term "merchant" refers to
an entity
who participates in a loyalty program to build loyalty with customers, and
potentially
acquire new business, and in exchange is willing to provide a loyalty
"benefit" (e.g.
cash, in kind contribution, special reduction in price, donation to a charity,
or other
promotion). A "member" refers to the customer or potential customer who is a
member of the loyalty program referred to.
One of the disadvantages of these prior art solutions is the lack of
flexibility in the
manner in which transactions triggering donations to the charity must occur.
The
benefit that a merchant participating in a loyalty program is willing to
provide will
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depend on a particular merchant and their business objectives at a particular
time.
The prior art solutions do not enable merchants to suitably reflect these
changing
objectives in the manner in which donations are processed in the context of
the loyalty
program. For example, a merchant that earmarks certain funds for charitable
donations and is reaching the end of its reporting period with unspent funds
for
charity may have a limited time to boost its donations. The merchant might
prefer to
make donations in the context of a loyalty program, however, prior art systems
do not
enable merchants to enhance their donation contributions under the loyalty
system to
such an end.
In addition, the prior art solutions generally are linked to one particular
charity, or the
choices of the member are "locked in" with a particular charity in the context
of the
loyalty program. This limits the choice of the member and therefore limits the
desirability of the loyalty program to potential members overall, and
furthermore
restricts the members' behaviour who might, for example, want to respond to a
particular need of a charity at a particular time (e.g. at the time of a major
funding
drive, or of a shortfall of a charity during a critical time period).
Therefore there is a need for a loyalty program linked to charitable donations
that
allows the participation of multiple merchants, and the flexibility that
enables the
charity benefit to be maximized by responding to changing business objectives.
There is a further need for a loyalty program that enables multiple merchants
to reflect
their changing business objectives by dynamically modifying the rules of the
loyalty
program as they relate to charitable donations. More specifically, there is a
need for a
loyalty program that enables merchants to customize their loyalty program,
including
as it related to charitable donations, on the fly, including based on
effectiveness and
incremental cost.
There is also a need for a loyalty program with benefits to charity that
permits the
participation of multiple charities therefore attracting more members by means
of
promotion of the loyalty program by the charities, and further that provides
control to
members in terms of how the charitable benefit of their activities within the
loyalty
program is apportioned between a plurality of participating charities.
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Many charities have important profile and very significant donor lists. This
profile
and these donor lists have not generally been leveraged to the benefit of a
loyalty
program because charities are reluctant to associate their goodwill with a
loyalty
program, in many cases in large part because the loyalty program lacks
transparency
to the members in that they cannot readily track the relationship between
their
activities within the loyalty program and the donations made to the charity.
There is a further need for a loyalty program that enables members to obtain
data
regarding their activities within the loyalty program that are eligible for
charitable
donations and also regarding donations made on their behalf to charity by
members.
The level of contribution that merchants would be willing to provide to a
charity in
the context of a loyalty program have been limited in part because prior art
solutions
did not adequately address the need for business to verify the commercial
benefit
derived by the merchants. Related charitable donations could be increased if
the
merchants were given the tools to measure and monitor the effectiveness and
incremental cost of their activities involving charitable donations. There is
a need
therefore for a method, system and computer program that enables merchants to
monitor and verify the commercial benefit that they are deriving from the
charitable
donations, thereby encouraging the merchants to increase their charitable
donations.
Another factor that has contributed to reluctance of both merchants and
charities to
participate in the type of activity described above, and thereby depriving
themselves
of the mutual benefits, is the fact that most prior art solutions involve (in
the context
of the particular loyalty program) association with a limited number of
merchants
with a single or small number of charities (usually with different purposes).
Merchants are concerned of alienating at least some of their customer base,
for
example by associating with one charity but not another charity favoured by a
part of
their customer base. Similarly, charities are loathe to bring attention to the
fact that
they are associating with one merchant, but not a competing merchant, for
example,
favoured by a number of their donors. This aspect is exacerbated by increased
competition for donations by charities, and also the polarization that exists
sometimes
between the respective customer bases of companies that are highly competitive
with
one another (especially where comparative advertising is used). There is a
further
need for a method, system and computer program that addresses this
disadvantage by
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permitting a merchant to associate with a plurality of charities (including
charities
with similar purposes), and charities to associate loosely with a plurality of
merchants,
where the members determine by selecting one or more charities and then
engaging in
consumer behaviour associated with a loyalty program associated with a
plurality of
merchants, ultimately determine the donations flowing from the merchants to
the
charity. A system whereby the member controls the flow of donations and
therefore
maintains the freedom of choice of the member tends to be affected by this
particular
disadvantage to a lesser degree.
Co-Pending Canadian Application No. 2,468,386, filed on May 27, 2004,
describes a
"Method, System, and Computer Program for Providing a Loyalty Engine Enabling
Dynamic Administration of Cross-Promotional Loyalty Programs (the "Co-Pending
Patent Application"). The Co-Pending Patent Application generally describes a
system, method and computer programs that permits dynamic interactions between
a
plurality of merchants and a plurality of members. In the particular, the
solution
described in the Co-Pending Patent Application enables the merchants to
dynamically
customize loyalty programs based on effectiveness and incremental cost. There
is a
particular need for a method, system and computer program that enables the
relationship between members and charities to be leveraged in the context of a
loyalty
program and in a manner that addresses the aforesaid needs.
Summary of Invention
A method, system and computer program is provided that enables a loyalty
program
to be linked to charitable donations, involving a loyalty program platform or
loyalty
engine or loyalty system. The loyalty program platform provides to a plurality
of
merchants tools to customize one or more loyalty programs made available to
members of the loyalty program platform (customer and potential customers of
the
merchants). The operator of the loyalty program platform establishes
relationships
with one or more charities, such relationships determining certain rules under
which
the plurality of merchants may make donations to the one or more charities
based on
the activities of members in connection with the loyalty programs. By
operation of
the loyalty engine, the operator and each participating merchant establish
rules for
each participating merchant to make donations to the one or more charities, in
conformity with the rules established between the operator and the one or more
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charities. The loyalty program platform operator in provides members the
option of
selecting one or more charities from a list of charities provided by the
loyalty program
platform. The loyalty system applies the aforementioned rules as they apply to
each
participating member so as to process donations based on their applicable
transactions
within the loyalty system. The loyalty program platform enables each of the
merchants, members and charities to track the donation activity.
In one particular aspect of the present invention, the present invention
provides a
method, system and computer program for enabling a loyalty program linked to
charitable donations, in which charitable donations are increased overall by
enabling
participating merchants to adjust the parameters of their charitable donations
to their
business objectives at the time by permitting the merchants to dynamically
modify the
rules of the loyalty program as they relate to charitable donations. More
specifically,
the method, system and computer program in accordance with this aspect enables
merchants to customize their loyalty program dynamically, including as it
relates to
charitable donations, based on effectiveness and incremental cost. This
generally
results in enhanced donation levels to the participating charities.
In another aspect of the present invention, the method, system and computer
program
for providing a loyalty program linked to charitable donations provides
transparency
by enabling them to track donations made to the one or more charities of their
choice,
thereby encouraging charity and member participation.
In yet another aspect of the present invention, a method, system and computer
program for providing a loyalty program linked to charitable donations is
provided
that permits a merchant to associate with a plurality of charities (including
charities
with similar purposes), and charities to associate loosely with a plurality of
merchants,
where the members, by selecting one or more charities and then by engaging in
consumer behaviour in connection with a loyalty program associated with a
plurality
of merchants, ultimately determine the donations flowing from the merchants to
the
charity.
In a still other aspect of the present invention, a method, system and
computer
program for providing a loyalty program linked to charitable donations is
provided
that is based on the method, system and computer program described in the Co-
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Pending Patent Application. Specifically, registration of members to the
loyalty
program platform involves members providing financial card data for one or
more
fmancial cards of each of the one or more participants, and financial data is
collected
corresponding to transactions between the members and merchants, said
financial data
being provided to a loyalty engine that is part of the loyalty program
platform. The
loyalty engine includes a charity utility that is operable to administer a
charity account
for each member who has selected one or more participating charities to
receive
donations from merchants. The charity utility is thereby operable to track
transactions
between members and merchants and credit the charity account with an
applicable
charitable donation credit, to the name of the applicable charity or
charities. The
operator of the loyalty program platform, or its agent, on a periodic basis
processes
donations from the applicable merchants to the applicable charities based on
the
information in the charity account.
In another method for providing a loyalty program linked to charitable
donations
including the steps of: Each of a plurality of merchants creating a customized
loyalty
program defined by a plurality of rules for administering their loyalty
program; a)
linking one or more charities with the loyalty programs; b) the plurality of
merchants
defining the rules under which, as part of their loyalty program, they will
make a
donation to one or more charities in connection with one or more transactions
with a
member that is associated to the loyalty program (donation rules); c) the
member
optionally selecting one or more charities presented to the member that, as
part of
their participation in the loyalty program, the plurality of merchants shall
make a
donation to the selected charities in connection with transactions between the
member
and the plurality of merchants; and i) tracking the transactions subject to
the
member's selection, applying the donation rules, and making the applicable
donations
available to the one or more charities.
In yet another system for providing a loyalty program presented by a plurality
of
merchants to a plurality of members registered with the loyalty program, the
loyalty
program being linked to charitable donations, the system including: a) a
server
computer connected to the Internet; and b) a web application linked to the
server, the
web application defining a loyalty engine that enables a plurality of
merchants to
create and manage customized loyalty programs defined by a plurality of rules
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defined by the loyalty engine for administering their loyalty programs; c) the
loyalty
engine including a charity utility, the charity utility being operable to
enable the
operator of the loyalty engine to register one or more charities thereon, the
charity
utility enabling the plurality of merchants to optionally define the rules
under which,
as part of their loyalty program, they will make a donation to one or more
charities in
connection with one or more transactions with a member that is associated with
the
loyalty program (donation rules); and d) based on a member optionally
selecting one
or more of the charities, the charity utility being further operable, based on
such
selection and the donation rules to: i) track transactions between the
merchants and
the member subject to member's selection for donations; ii) apply the donation
rules;
and iii) accrue donations to be made by the plurality of merchants to the
applicable
charities based on one or more transactions between the plurality of merchants
and the
member.
A computer program comprising computer instructions which when loaded on a
server computer connected to the Internet are operable to include: a) A web
application defining a loyalty engine that enables a plurality of merchants to
create
and manage customized loyalty programs defined by a plurality of rules defined
by
the loyalty engine for administering their loyalty programs; b) the loyalty
engine
including a charity utility, the charity utility being operable to enable the
operator of
the loyalty engine to register one or more charities thereon, the charity
utility enabling
the plurality of merchants to optionally define the rules under which, as part
of their
loyalty program, they will make a donation to the one or more charities in
connection
with one or more transactions with a member that is associated with the
loyalty
program (donation rules); c) based on a member optionally selecting one or
more of
the charities, the charity utility being further operable, based on such
selection and the
donation rules to: i) track transactions between the merchants and the member
subject
to member's selection for donations; ii) apply the donation rules; and iii)
accrue
donations to be made by the plurality of merchants to the applicable charities
based on
one or more transactions between the plurality of merchants and the member.
In a very particular aspect of the present invention, the method, system and
computer
program for providing a loyalty program linked to charitable donations of the
present
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invention provides incentives to charities to encourage their donors to become
members, thereby providing merchants with a base of new potential customers.
Brief Description of the Drawings
A detailed description of the preferred embodiment(s) is (are) provided herein
below
by way of example only and with reference to the following drawings, in which:
Fig. 1 a is a flowchart summarizing the method of the present invention
overall.
Fig. lb is a system diagram illustrating the resources of the system of the
present
invention.
Fig. lc illustrates a particular embodiment of the method of the present
invention,
according to which a charity is registered to a loyalty program platform.
Fig. 2 illustrates a particular embodiment of the method of the present
invention, in
accordance with which an individual interested in having donations made on
his/her
behalf to a particular charity becomes a member.
Fig. 3 illustrates a particular embodiment of the method of the present
invention, in
accordance with which a new merchant joints the loyalty program platform.
Fig. 4 is a flowchart illustrating the administration of the charity account
in
accordance with a particular aspect of the present invention.
Fig. 5 provides an overview of the method of the present invention, from the
use of
the member's financial card to the posting donations based on transactions to
the
charity account.
Fig. 6 is a flowchart further illustrating the operation of the charity
account, and in
particular the accrual for the initiated charity donation amounts within a
specific
accrual period including data for members, merchants and charities.
Fig. 7 is flowchart illustrating the display of the member's reporting within
the loyalty
system of the present invention for a specific accrual period.
Fig. 8 is a flowchart illustrating the display of the merchant's reporting
within the
loyalty system of the present invention for a specific accrual period.
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Fig. 9 is a flowchart illustrating the display of the charity's reporting
within the
loyalty system of the present invention for a specific accrual period.
Fig. 10 is a flowchart illustrating the actual donation process at the end of
a reporting
period including the third party charity and the preparation of tax receipts.
In the drawings, preferred embodiments of the invention are illustrated by way
of
example. It is to be expressly understood that the description and drawings
are only
for the purpose of illustration and as an aid to understanding, and are not
intended as a
definition of the limits of the invention.
Detailed Description of the Preferred Embodiment
Fig. la illustrates the general method of the present invention. A method is
illustrated
that enables a loyalty program to be linked to charitable donations, involving
a loyalty
program platform or loyalty engine or loyalty system. The method consists of
(10)
registering on the loyalty system a plurality of merchants. (12) Providing to
the
plurality of merchants tools to customize one or more loyalty programs made
available to members of the loyalty program platform (customers and potential
customers of the merchants). (14) The operator of the loyalty program platform
establishing relationships with one or more charities, such relationships
determining
certain rules under which the plurality of merchants may make donations to the
one or
more charities based on the activities of members in connection with the
loyalty
programs. By means of (14), the charities are then registered (16) with the
loyalty
system (as further illustrated in Fig. 1 c). (18) By operation of the loyalty
engine, the
operator and each participating merchant establishing rules for each
participating
merchant to make donations to the one or more charities, in conformity with
the rules
established between the operator and the one or more charities. Typically, the
merchants agree to conform to commitments that they make to members that are
displayed in the charity area of a website linked to the loyalty system. These
commitments are made by merchants by operation of the loyalty engine described
in
the Co-Pending Patent Application by merchants customizing their loyalty
program(s). (20) The members by operation of the loyalty system selecting one
or
more charities from a list of charities provided by the loyalty system. (22)
The loyalty
system applying the aforementioned rules as they apply to each participating
member
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so as to process donations based on their applicable transactions within the
loyalty
system.
In a particular aspect of the present invention, it is not obligatory for
members to
participate in the donations being made on their behalf to charities. Those
who do
elect to participate are generally referred to as "participating members" in
this
particular disclosure.
The loyalty system platform enables each of the merchants, members and
charities to
track the donation activity.
Fig. lb best illustrates the system of the present invention. In one
particular
embodiment thereof, the system is best understood as an extension of the
functionality
described in the Co-Pending Patent Application, so as to include the charity
utility
(24) of the present invention, preferably implemented on a server computer
(23)
connected to the Internet. In one example of an implementation of the charity
utility
(24) (also referred to as "charity sub-system" in the Figs.), it is best
understood as a
software component of a web utility that provides the loyalty engine (26)
particularized in the Co-Pending Patent Application. The charity utility (24)
is
programmed in a manner that is known to those skilled in the art, and is
operable to
provide on the database (28) the charity accounts (30) of the members. Access
to
different aspects of the database (28) are provided by a known administration
utility
(32) that provides hierarchical access to the database (28), depending on
permissions
by the operator of the loyalty system, to each of members, merchants and
charities.
The purpose of providing this access is to provide transparency to the
donations made
in operation of the loyalty system, as particularized below. A reporting
utility (25) is
further linked to the charity utility (24) to provide various reports of
interest to
merchants and charities in particular, for example, by permitting merchants to
generate reports on measured performance of charitable donations made by
operation
of the loyalty system (thereby enabling calibration of loyalty programs
involving
charitable donations, as described in the Co-Pending Patent Application) and
also
permitting charities to generate reports on success of their promotion of the
loyalty
system to their contacts (including donors), as well as outside factors such
as
marketing and funding drives thereby also enabling charities to calibrate
their use of
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the loyalty system in a manner similar to the processes described in the Co-
Pending
Patent Application.
Fig. 1 c illustrates the particular steps whereby a charity is registered in
accordance
with the present invention. Specific charities may be suggested by members,
merchants, or other charities. In either case, the operator of the loyalty
system selects
preferably a group of charities based on a variety of factors. A contract is
then
entered into between the operator of the loyalty system and the charity. In a
particular
aspect of the present invention, the operator and the charity agree on joint
marketing,
and also promotion of a website (36) (illustrated in Fig. lb) associated with
the
loyalty system to its contacts such as donors. Specifically, the charity
invites its
contacts to join the loyalty system as a means to attract new donations to the
charity
from the merchants participating in the loyalty system (generally referred to
as
participating merchants). The rights of the operator under the joint marketing
understanding with the charity generally includes the right to use trade-marks
and
promotional materials of the charity (subject to pre-approval) in order to
promote the
charity's involvement with the loyalty system.
Charities agree contractually to participate in the loyalty system. Merchants
also
agree to pay participating charities base upon measured performance, as
further
detailed below.
Fig. 2 illustrates a particular embodiment of the method of the present
invention, in
accordance with which an individual interested in having donations made on
his/her
behalf to a particular charity becomes a participating member. This can occur
in a
number of different ways. (A) A member may be affiliated with a charity
already. In
one aspect of the website (36), a charity area is provided that enables
charities to
market to its members who may already be donors or aware of the charity. The
charity may also use the charity area to generate donations directly from
members
(i.e. as opposed to donations made by merchants on behalf of members). In a
particular aspect of the present invention, the charity utility (24) includes
means for
processing financial transactions (or transaction utility (38)) between the
charity and
members. It should also be understood that the transaction utility (38) may
also be
used to facilitate payments between merchants and charities, including by
means of
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one or more intermediaries between the merchants and the charities, as further
explained below.
(B) Merchants may market to their customers to join the loyalty system, to
become
members and also to become participating members in the charity aspect of the
loyalty system. The merchants benefit from increased loyalty and revenue from
their
customers. The involvement of the charities can enhance these benefits
perceived by
the merchants.
(C) Promotion of the loyalty system and the website (36) may attract new
members
who are not associated with the merchants or the charities.
(D) Existing members of the loyalty system may be invited to join the charity
area of
the loyalty system by the operator of the loyalty system.
It is clear from the above, that members can be attracted to become
participating
members in a number of different ways. The registration of additional
participating
members benefits merchants and charities.
In a particular embodiment of the present invention, new members are
registered as
described in the Co-Pending Patent Application. For example, if a member
referred by
a charity decides to join the loyalty system, s/he will go to the website (36)
to register
a financial card and to provide personal information. In the charity area of
the
website (36), the member preferably indicates how s/he has been referred to
the
charity area; and whether he/she wishes to have one or more charities receive
payments based upon member transactions using a registered financial card.
Merchants indicate an amount they will pay to charities based on transactions
involving participating members. This is usually reflected in the charity
area, so that
participating members can patronize merchants based on the donations that they
make
to charities. This in turn causes a certain level of competition between
merchants in
their making donations to charities, which in turn tends to benefit charities
by
increasing their donations overall.
A person may indicate he/she was not referred by a charity but still choose to
have a
contribution made.
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A person, whether referred or not referred, may choose to have no amounts
donated to
charity. If no charity is designated, the accrual amount is zero for that
member's
transactions.
Fig. 3 illustrates the method by which a merchant registers with the charity
utility
(24). In accordance with a particular aspect of the present invention, a
merchant
agrees to submit donations based on transactions between the merchants and
members, as referenced above. An initial donation rate is set by the
participating
merchant and the charity utility (24) records the donation rate and applies
this towards
future transactions between members and the participating merchant.
For example, a merchant "A" agrees to register with the charity utility (24).
Merchant
"A" enters into an agreement with the operator of the loyalty system to make
donations based on transactions within the loyalty system as follows:
1) Min. Transaction Amount = $100.00
2) Date of Transaction (for current and *future accrual periods);
3) Time of Transaction (any time of day);
4) Terminal ID of retail system that captured the fmancial transaction;
5) SKU number of Item purchased; and
6) Donation Amount based on percentage of Total Transaction Amount (e.g.
1%).
The loyalty system is operable to store the parameters above (and other
similar
parameters) and apply same against transactions between participating members
and
participating merchants.
Typically, the parameters or donation rules above are set by each merchant at
the
beginning of each reporting period. But merchants may vary the donation rules
at
will, including by time and day of the week for example, provided that this is
communicated clearly in the charity area of the web site (36) to members.
Accordingly, participating merchants can use the donation rules to encourage
specific
behaviour from members, e.g. if members attend restaurant X before 6 p.m.,
then a
donation of 2% instead of 1% is paid to charity Y.
In a particular aspect of the present invention, the charity utility (24) is
operable to
roll over the parameters set out above for future accrual periods. After an
accrual
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period has come to an end the system will verify the accrued amounts of the
donations
and reset the accumulated displayed totals for each charity, merchant and
member to
reflect the new accrual period. Certain parameters may be carried forward
unless
adjusted by the system administrator. The parameters that may be carried
forward
may include, time period of accrual period, merchant donation rates, member
donation distribution, specific charities and merchants involved the charity
system.
The donations by merchants are administered by the charity utility (24), and
if
applicable the transaction utility (38). In most applications, the charity
utility (24)
allows for the merchant to adjust the percentage of donations for future
accrual
periods based on member transactions with a registered financial card. Once an
accrual period has commenced the donation rate cannot be adjusted for the
current
accrual period. Future changes by the merchant of donations given to charities
may be
completed with this utility. For instance a merchant may decide to
increase/decrease
the percentage used to calculate donations or may decide to base donations
strictly on
a fixed amount per transaction with a member using a registered financial
card.
Following a member's transaction with a merchant, the charity utility (24) is
operable
to recognize whether a charity amount should be accrued to an applicable
charity
account (30) based on the donation rules and the member's election. The
charity
utility (24) is operable to calculate the charitable amount based on the
donation rules
and then allocate amounts within the charity account (30) based on the various
charities designated by the member. The system of the present invention is
operable
to track: (A) the amount the merchant owes due to all transactions from all
members,
(B) amount the member has directed to charities (in total) based on various
time
periods, and (C) the amount accrued to each charity (in total and be each
merchant),
also over various time periods. The reporting utility (25) is operable to
generate
various reports based on this tracked data. These amounts are split among
charities
based on the members' transactions and the directions expressed by each member
to
share between charities.
In one particular aspect of the present invention, participating merchants
contract to
pay the donation sum accrued through for each participating charity following
the end
of a designated accrual period. The loyalty system is operable to provide
notice to
merchants as to their accrued donation obligations. Similarly, charities are
sent
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reports regarding the amounts that they are expected to receive. Following the
period
end (about 30 days later) the merchants will pay to the charity or an
intermediary (for
example a non-profit company responsible for disbursement of donation funds
accrued) the applicable amounts. The operator of the loyalty system acts as a
trusted
intermediary with audit provisions in place with the merchants and the
charities
(subject to protection of personal information of all individuals concerned)
to enable
merchants to make donations accrued for all members who transacted with them
at
once, and also for charities to receive donations for all members who
designated them
at once.
As an alternative each merchant may make payments to each participating
charity, as
applicable, including by operation of the transaction utility (38).
In a particular aspect of the present invention, each merchant preferably
maintains
donation terms constant within a set period of time. This is to provide
efficiency in
communications (sending an update as to a change each time it occurs would be
cumbersome to all concerned) and predictability in the relevant transactions.
As illustrated in Fig. 4, the charity utility (24) establishes accrual
periods, based on
rules established by the operator of the loyalty system. The starting times
and ending
times for the accrual periods define donation time periods, which form
boundaries for
all agreements and donation related activities. The purpose of the accrual
periods is
to create time boundaries for donation generation.
For example, the operator of the loyalty system may establish twelve accrual
periods
in any year which correspond to the months of the year. Later, the operator of
the
loyalty system may change the accrual periods by having four quarterly accrual
periods. The charity utility (24) is operable to add flags to new transactions
to that
they are tagged for the appropriate accrual period in the database (28). In
this
implementation of the present invention, the system only permits changes to
the
accrual period for future time intervals. Therefore no changes can be made
when the
current date/time is within a current accrual period.
Fig. 5 illustrates in greater detail the operation of the present invention as
described
above, end to end. Fig. 5 also illustrates the manner in which transactions
are flagged,
and donations are accrued. As illustrated in Fig. 5, the charity utility (24)
is operable
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to evaluate transaction information received by the loyalty system to ensure
that they
are in compliance with the applicable donation rules, in order to determine
whether a
donation should be processed in a particular transaction.
Examples in Operation
In operation, assume that the operator of the loyalty system has set the
following
parameters for the accrual periods: January 01/2005 - March 31/2005; Accrual
Period
2: Apri101/2005 - June 30/2005; Accrual Period 3: July 01/2005 - Sept 31/2005;
and
Accrual Period 4: October 01/2005 - December 31/2005.
For Example Merchant "A" sets the following parameters for Accrual Period 1:
1) Min. Transaction amount $100.00
2) Transaction must be made between January 01/2005 - March 31/2005
3) Any Time for a Transaction
4) Any Terminal ID of retailers that captures the fmancial transaction
5) Any SKU
6) 1% of Total Transaction Amount
Suppose the following transaction data is relayed to the loyalty system:
Transaction #1 Member "H":
1) Transaction Amount 240.00
2) Transaction Date January 02/2005
3) Transaction Time 09:53 AM
4) Terminal ID 232596
5) SKU Not Relayed
Transaction #2: Member "I"
1) Transaction Amount 96.43
2) Transaction Date January 02/2005
3) Transaction Time 10:52 AM
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4) Terminal ID 987654
5) SKU 0909579
Transaction #3: Member "J"
1) Transaction Amount 9800.00
2) Transaction Date December 10/2005
3) Transaction Time 11:52 AM
4) Terminal ID 987684
5) SKU 123456
The donation amount that the merchant would owe would be calculated as the
following:
Transaction "A" 240.00 X 1% = $2.40
Transaction "B" =$0.00 NOT WITHIN DATE RANGE
Transaction "C" = 9800.00 X 1% = 98.00
Total Donation Generated (Merchant obligation) = 97.85 + 2.40 =$100.25
The Members have each set the following parameters:
Member "H":
25% to Charity "AA"
25% to Charity "BB"
50% to Charity "CC"
Member "I":
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100% to Charity "AA"
Member "J":
50% to Charity "AA"
50% to Charity "BB"
The distribution to each charity form the Member/Customer transactions would
be:
Member "H" Transaction:
25% of 2.40 = $0.60 to Charity "AA"
25% of 2.40 = $0.60 to Charity "BB"
50% of 2.40 = $1.20 to Charity "CC"
Member "I" Transaction:
100% of $0.00 to Charity "AA"
Member "J" Transaction:
50% of $98.00 = $49.00 to Charity "AA"
50% of $98.00 = $49.00 to Charity "BB"
The Total donation Generated for each charity is:
Charity "AA" $0.60 + $49.00 = $49.60
Charity "BB" $0.60 + $49.00 = $49.60
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Charity "CC"= $1.20
Fig. 6 illustrates the operation of the charity account (30), and in
particular the accrual
for the initiated charity donation amounts within a specific accrual period
including
data for members, merchants and charities. The operator of the loyalty system
chooses a date range for displaying to members the total amount generated by
member transactions with participating merchants. The total amount reflects
the
donation amounts accrued within a set time period. The time period is chosen
by the
system administrator and reflects the entire donation amount generated for all
charities. For example: Member "1" creates $20.00 in donations within January
1/2005 and March 31/2005; and Member "2" creates $25.00 in donations within
December 1/2004 and December 31/2004. The operator of the loyalty system
chooses the following dates for display of member generated donations:
beginning
date = January 1/2005; and ending date = December 31/2005. The system would
display $25.00 for donations generated if these were the only members who made
qualifying transactions for the administrator selected time period.
Fig. 7 illustrates the display of the member's reporting within the loyalty
system of
the present invention for a specific accrual period. For example, members have
the
option to view the total accumulated donations generated by all members. The
system
allows for the viewing of the total amounts for the purpose of increasing the
sense of
community for members, and also a healthy sense of competition between them,
thereby benefiting charities. For instance a member may choose to navigate to
an
area of the system that shows that the total accumulated donations generated
for a
time period determined by the operator of the loyalty system is $1000.00.
Fig. 8 is a flowchart illustrating the display of the merchant's reporting
within the
loyalty system of the present invention for a specific accrual period.
Merchants who
are participating in donation generation have the option to view donation
amounts that
are due to charities. The participating merchant may view the amounts due to
the
various charities due to transactions by members with the participating
merchant. This
allows for the merchant to monitor donation amounts due to each charity that
the
members have chosen. For instance a Merchant "A" may wish to view the
donations
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created between January 1/2005 and March 31/2006, by operation of reporting
utility
(25). The system would return a breakdown of the amounts due to each
particular
charity. The system only allows each merchant to view their own donation
obligation
and not amounts that other merchants owe.
Fig. 9 is a flowchart illustrating the display of the charity's reporting
within the
loyalty system of the present invention for a specific accrual period. The
system
allows for each charity to monitor the donation amount due by merchant.
Currently
there a few means for a charity to monitor donation amounts promised by
merchants
for various consumer purchases. The system allows for the charity to view the
amounts due to it by merchant within a selected time period by operation of
reporting
utility (25).
For instance a Charity "AA" may wish to view the donations due to it for
consumer/member transactions within the date range of January 1/2005 to March
31/2006. The system would return the breakdown by merchant on how much they
owe to the charity. Using the information from Figure 8:
Merchant "AA" $10.00
Each charity has their own view of donation generation reporting (by operation
of the
reporting utility (25)) and may not view other charity donations by operation
of the
administration utility (32).
Fig. 10 is a flowchart illustrating the actual donation process at the end of
a reporting
period including the third party charity and the preparation of tax receipts.
This is
intended merely as an example of how this part of the method might work,
depending
on applicable legal and administrative requirements. In another implementation
of
this aspect of the invention, the merchants send payment directly for each
accrual
period for each participating charity, and the participating charities issue
tax receipts
directly.
It should be understood that the cost of acquiring new customers is generally
quite
high, and this is a cost that merchants tend to monitor very closely.
Particularly if a
merchant's relationship with a charity in the context of the loyalty system
permits the
merchant to acquire a new customer through the charity, merchants will
generally be
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willing to make a relatively significant donation to the charity that resulted
in the new
customer. In addition, the present invention enables a merchant to build more
links
with a community by making donations to local charities by operation of the
present
invention. This provides invaluable public relations with local communities.
This
represents a particularly strong opportunity to merchants who have no or
little
physical presence in a particular geographic area.
Other implementations and extensions of the invention are possible. For
example, it
should be understood that the present invention contemplates use of various
security
methods and technologies for restricting access to resources of the loyalty
system to
those authorized to do so by the operator of the loyalty system; the use of
various
existing and future technologies to process payments by operation of the
transaction
utility (38); various tools and interfaces for interacting with the loyalty
system in
accordance with the method of the present invention. The system also allows
for
robust reporting which may include comparative reports of member affinity
(member
may be referred by a charity) of transaction history with participating
merchants. In
other words, member transaction history may be different for differing groups
of
members based on member affinity.
