Method and system for issuing, aggregating and redeeming points based on merchant transactions

• US 20050021399A1
• Filed: 03/01/2004
• Published: 01/27/2005
• Est. Priority Date: 06/23/1999
• Status: Active Grant

• Current Assignee: Signature Systems LLC
• Original Assignee: Signature Systems LLC
• Inventors: Postrel, Richard
• Granted Patent: US 7,769,630 B2
• Time in Patent Office: Days
• US Class Current: 705/14.280
• CPC Class Codes: G06Q 20/06 Private payment circuits, e.g. involving electronic currency used among participants of a common payment scheme
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0227 Frequent usage incentive value reconciliation between diverse systems
• CPC Class Codes: G06Q 30/0229 Multi-merchant loyalty card systems
• CPC Class Codes: G06Q 30/0231 Awarding of a frequent usage incentive independent of the monetary value of a good or service purchased, or distance travelled
• CPC Class Codes: G06Q 30/0233 Method of redeeming a frequent usage reward
• CPC Class Codes: G06Q 30/0236 Incentive or reward received by requiring registration or ID from user

Abstract

A loyalty or reward point system that utilizes the pre-existing infrastructure of a typical credit card network. In one embodiment, a user makes a purchase at a merchant of a product using a credit card. The merchant contacts the acquiring bank (which may be any type of financial institution but is referred to generically herein as a bank) with which it has contracted for credit card network services, and as known in the art, will get an approval or decline message after the acquiring bank contacts the issuing bank of the credit card used by the purchaser. Assuming that the purchase transaction is approved, the user is awarded loyalty points from the merchant based on the amount of the purchase (e.g. 100 points for a $100 purchase). A central server resides on the credit card network and tracks the transaction between the merchant, the acquiring bank, and the issuing bank. A reward account is maintained on the central server on behalf of the merchant and the user, and the number of reward points in the user'"'"'s account for that merchant is increased accordingly. In an alternative embodiment, the user'"'"'s reward points are logged in an account maintained by the acquiring bank on behalf of the merchant (with which it has a contractual relationship) and the user. The user may redeem the reward points earned from the transaction with the merchant at a later time, or may redeem the points with another merchant on the credit card network, or may aggregate those reward points with those of other merchants into a central exchange account, and then redeem the aggregated points for goods or services from any approved merchant on the network, depending on the configuration of the system.

Claims

1. A method of operating a reward points system in conjunction with a credit card network, the credit card network comprising at least one issuing bank for issuing a credit card to a user and at least one acquiring bank for collecting payment from the issuing bank on behalf of a merchant and paying the merchant, the method comprising the steps of:

a. a user executing a purchase transaction with a merchant by presenting a credit card for payment of the transaction;

b. the merchant requesting an acquiring bank to obtain approval of said purchase transaction from an issuing bank; and

c. the merchant instructing a central reward server to add reward points to a merchant reward point account associated with the merchant and the user.

2. The method of claim 1 further comprising the step of redeeming reward points from the merchant reward point account by the steps of

the user executing a purchase transaction with the merchant;

the user utilizing reward points from the merchant reward point account for the purchase transaction;

the merchant instructing the central reward server to decrement the merchant reward point account associated with the user by the amount of points used in the transaction.

3. The method of claim 1 further comprising the steps of

establishing a reward point exchange account on the credit card network;

selecting reward points from each of a plurality of merchant reward point accounts for exchange into the reward point exchange account; and

aggregating the selected reward points into the reward point exchange account.

4. The method of claim 3 further comprising the step of redeeming aggregated reward points from the reward point exchange account by the steps of

the user executing a purchase transaction with the merchant;

the user utilizing aggregated reward points from the reward point exchange account for the purchase transaction;

the reward point exchange account being reduced by the number of aggregated reward points utilized for the purchase transaction.

5. The method of claim 3 comprising the further steps of:

establishing a cluster of merchants, each of which have merchant reward point accounts established with an acquiring bank;

allowing aggregation of points from each of the merchants in the cluster into the reward point exchange account; and

disallowing aggregation of points from a merchant not a member of the cluster.

6. The method of claim 5 comprising the further step of allowing for redemption of aggregated reward points only with merchants that are members of the cluster.

7. The method of claim 3 wherein the reward point exchange account is administered by the credit card network operator.

8. The method of claim 3 wherein the reward point exchange account is administered by an issuing bank.

9. The method of claim 3 wherein the reward point exchange account is administered by an acquiring bank.

10. The method of claim 3 wherein reward points from an independent reward point system may be aggregated into the central exchange reward point account.

11. A method of operating a reward points system in conjunction with a credit card network, the credit card network comprising at least one issuing bank for issuing a credit card to a user and at least one acquiring bank for collecting payment from the issuing bank on behalf of a merchant and paying the merchant, the method comprising the steps of:

a. a user executing a purchase transaction with a merchant by presenting a credit card for payment of the transaction;

b. the merchant requesting an acquiring bank to obtain approval of said purchase transaction from an issuing bank; and

c. the merchant instructing the acquiring bank to add reward points to a merchant reward point account associated with the merchant and the user.

12. The method of claim 11 further comprising the step of redeeming reward points from the merchant reward point account by the steps of

the user executing a purchase transaction with the merchant;

the user utilizing reward points from the merchant reward point account for the purchase transaction;

the merchant instructing the acquiring bank to decrement the merchant reward point account associated with the user by the amount of points used in the transaction.

13. The method of claim 11 further comprising the steps of

establishing a reward point exchange account at a central server computer;

selecting reward points from each of a plurality of merchant reward point accounts for exchange into the reward point exchange account at the central server computer; and

aggregating the selected reward points into the reward point exchange account.

14. The method of claim 13 further comprising the step of redeeming aggregated reward points from the reward point exchange account by the steps of

the user executing a purchase transaction with the merchant;

the user utilizing aggregated reward points from the reward point exchange account for the purchase transaction;

the reward point exchange account being reduced by the number of aggregated reward points utilized for the purchase transaction.

15. The method of claim 13 comprising the further steps of:

establishing a cluster of merchants, each of which have merchant reward point accounts established with an acquiring bank;

allowing aggregation of points from each of the merchants in the cluster into the reward point exchange account; and

disallowing aggregation of points from a merchant not a member of the cluster.

16. The method of claim 15 comprising the further step of allowing for redemption of aggregated reward points only with merchants that are members of the cluster.

17. The method of claim 13 wherein the reward point exchange account is administered by the credit card network operator.

18. The method of claim 13 wherein the reward point exchange account is administered by an issuing bank.

19. The method of claim 13 wherein the reward point exchange account is administered by an acquiring bank.

20. The method of claim 13 wherein reward points from independent reward point system may be aggregated into the central exchange reward point account.