Method and system for issuing, aggregating and redeeming merchant loyalty points with an acquiring bank

• US 20050021401A1
• Filed: 04/28/2004
• 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 7,742,943 B2
• Time in Patent Office: Days
• US Class Current: 705/14.300
• CPC Class Codes: G06Q 20/387 Payment using discounts or coupons relating to marketing G06Q30/02
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0229 Multi-merchant loyalty card systems
• CPC Class Codes: G06Q 30/0235 constrained by time limit or expiration date
• CPC Class Codes: G06Q 30/0236 Incentive or reward received by requiring registration or ID from user
• CPC Class Codes: G06Q 30/0267 Wireless devices

Abstract

A loyalty reward point system that utilizes the pre-existing infrastructure of network such as a credit card network. A user makes a purchase at a merchant using a token such as a credit card. As part of the purchase transaction, the user is awarded reward points from the merchant based on the purchase, which are stored in an account associated with the merchant and the user by the acquiring bank. The reward account is maintained on the acquiring bank 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. 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 in the same marketing cluster, or may aggregate those reward points with those of other merchants into a reward point exchange account, and then redeem the aggregated reward 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 network, the network interconnecting with a plurality of merchants and at least one acquiring bank for processing credit card transactions, the method comprising the steps of:

a. a user executing a purchase transaction with a merchant;

b. the user presenting a token during the purchase transaction, the token having a user identification associated therewith;

c. the merchant providing purchase transaction information to the acquiring bank via the network to enable the acquiring bank to add reward points to a merchant reward point account associated with the merchant and the user.

2. The method of claim 1 wherein the purchase transaction is a credit card transaction, the token is a credit card, and the user identification number associated therewith is the user'"'"'s credit card number.

3. The method of claim 1 wherein the purchase transaction is a non-credit transaction, the token is a credit card, and the user identification number associated therewith is the user'"'"'s credit card number, wherein the user may earn reward points into the user'"'"'s reward point account associated with a merchant by presenting the credit card to the merchant only for purposes of referencing the user'"'"'s reward point account with the acquiring bank.

4. The method of claim 1 wherein the purchase transaction is a debit card transaction, the token is a debit card, and wherein the user identification number associated therewith is the account number on the debit card.

5. The method of claim 1 wherein the token is a merchant loyalty card, and wherein the user identification number associated therewith is an account number associated with the loyalty card.

6. The method of claim 1 wherein the token is a smart card, and wherein the user identification number associated therewith is an account number associated with the smart card.

7. The method of claim 1 wherein the token is a stored value card, and wherein the user identification number associated therewith is an account number associated with the stored value card.

8. The method of claim 1 wherein the token is a credit union card, and wherein the user identification number associated therewith is an account number associated with the credit union card.

9. The method of claim 1 wherein the token is in intangible form.

10. The method of claim 9 wherein the token is the user'"'"'s social security number.

11. The method of claim 9 wherein the token is a personal identification number (PIN).

12. The method of claim 1 wherein the merchant transmits, as part of the purchase transaction, an instruction to the acquiring bank to add reward points to the merchant reward point account associated with the merchant and the user.

13. The method of claim 1 wherein the acquiring bank automatically adds reward points to the merchant reward point account associated with the merchant and the user based on a previously defined rule.

14. The method of claim 13 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on an item purchased by the user.

15. The method of claim 13 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on a purchase price of an item purchased by the user.

16. The method of claim 13 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on the geographic location of the merchant.

17. The method of claim 13 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on the date of the purchase transaction.

18. The method of claim 13 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on the time of day of the purchase transaction.

19. 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 redemption purchase transaction with the merchant;

presenting the token during the redemption purchase transaction for utilizing reward points from the merchant reward point account for the redemption purchase transaction;

the acquiring bank reducing the merchant reward point account associated with the merchant and the user by the amount of points used in the redemption purchase transaction.

20. The method of claim 19 wherein the user executes the redemption purchase transaction completely with reward points from the reward point account at the acquiring bank.

21. The method of claim 19 wherein the user executes the redemption purchase transaction partially with reward points from the reward point account at the acquiring bank and partially with other consideration.

22. The method of claim 19 wherein the merchant transmits, as part of the redemption purchase transaction, an instruction to the acquiring bank to subtract reward points from the merchant reward point account associated with the merchant and the user.

23. The method of claim 19 wherein the acquiring bank automatically subtracts reward points from the merchant reward point account associated with the merchant and the user based on a previously defined rule.

24. The method of claim 23 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on an item redeemed for by the user.

25. The method of claim 23 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on a redemption purchase price of an item redeemed for by the user.

26. The method of claim 23 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on the geographic location of the merchant.

27. The method of claim 23 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on the date of the redemption purchase transaction.

28. The method of claim 23 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on the time of day of the redemption purchase transaction.

29. The method of claim 1 comprising the further step of establishing a cluster of participating merchants, each of which have merchant reward point accounts established with an acquiring bank.

30. The method of claim 29 comprising the further steps of allowing reward points from a reward point account associated with one of the participating merchants in the cluster to be redeemed with another participating merchant in the cluster.

31. The method of claim 30 comprising the further step of disallowing reward points from a reward point account associated with a merchant that is not a participating merchant in the cluster to be redeemed with a participating merchant in the cluster.

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

establishing a reward point exchange account associated with a user on a database on the network;

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

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

33. The method of claim 32 further comprising the step of the user redeeming aggregated reward points from the user'"'"'s reward point exchange account by the steps of

the user executing a redemption purchase transaction with a merchant;

the user indicating to the merchant that aggregated reward points from the reward point exchange account should be utilized for the redemption purchase transaction; and

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

34. The method of claim 32 comprising the further steps of:

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

allowing aggregation of reward points from each of the participating merchants in the cluster into the user'"'"'s reward point exchange account; and

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

35. The method of claim 34 comprising the further step of allowing for redemption of aggregated reward points only with merchants that are members of the cluster.

36. The method of claim 33 wherein the reward point exchange database is administered by an operator on the network.

37. The method of claim 33 wherein the reward point exchange database is administered by an acquiring bank.

38. The method of claim 33 wherein reward points from an independent reward point system may be aggregated into the reward point exchange account.

39. The method of claim 33 wherein the reward point exchange database is administered by an issuing bank.

40. The method of claim 1 wherein the number of reward points added to the merchant reward point account is a percentage of a purchase price associated with the purchase transaction.

41. The method of claim 1 wherein the network is a credit card network comprising a plurality of issuing banks, a plurality of acquiring banks, and a plurality of merchants.

42. The method of claim 1 wherein the network is a global communications network.

43. The method of claim 42 wherein the global communications network is the Internet.

44. The method of claim 1 wherein the network is a wireless network.

45. The method of claim 1 wherein the network is an interactive television network.

46. The method of claim 1 wherein the user executes the purchase transaction at a physical point of sale associated with the merchant and the user physically presents the token to the merchant.

47. The method of claim 1 wherein the user executes the purchase transaction via a web site associated with the merchant, and the user enters the user identification associated with the token to the web site.

48. The method of claim 19 wherein the user executes the redemption purchase transaction at a physical point of sale associated with the merchant and the user physically presents the token to the merchant.

49. The method of claim 19 wherein the user executes the redemption purchase transaction via a web site associated with the merchant, and the user enters the user identification associated with the token to the web site.

50. The method of claim 32 wherein the user indicates the aggregation of selected reward points into the reward point exchange account via a web site over the Internet.

69. The system of claim 15 wherein the merchant further comprises:

means for executing a redemption purchase transaction with the user;

means for accepting presentation of a token by a user for payment of the redemption purchase transaction, the token having a user identification associated therewith; and

means for providing redemption purchase transaction information to the acquiring bank via the network to enable the acquiring bank to subtract, from a merchant reward point account associated with the merchant and the user, the number of points used in the redemption purchase transaction.

70. The system of claim 69 wherein the user executes the redemption purchase transaction completely with reward points from the reward point account at the acquiring bank.

71. The system of claim 69 wherein the user executes the redemption transaction partially with reward points from the reward point account at the acquiring bank and partially with other consideration.

72. The system of claim 69 wherein the means for providing redemption purchase transaction information to the acquiring bank comprises means for transmitting, as part of the redemption purchase transaction, an instruction to the acquiring bank to subtract reward points from the merchant reward point account associated with the merchant and the user.

73. The system of claim 69 wherein the acquiring bank comprises means for automatically subtracting reward points from the merchant reward point account associated with the merchant and the user based on a previously defined rule.

74. The system of claim 73 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on an item redeemed for by the user.

75. The system of claim 73 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on a redemption purchase price of an item redeemed for by the user.

76. The system of claim 73 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on the geographic location of the merchant.

77. The system of claim 73 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on the date of the redemption purchase transaction.

78. The system of claim 73 wherein the previously defined rule provides for the acquiring bank to automatically subtract reward points from the merchant reward point account associated with the merchant and the user based on the time of day of the redemption purchase transaction.

98. The system of claim 69 wherein the user executes the redemption purchase transaction at a physical point of sale associated with the merchant and the user physically presents the token to the merchant.

99. The system of claim 69 wherein the user executes the redemption purchase transaction via a web site associated with the merchant, and the user enters the user identification associated with the token to the web site.

51. A reward points system operating on a network, the network interconnecting with a plurality of merchants and at least one acquiring bank for processing credit card transactions, wherein:

the merchant comprises;

means for executing a purchase transaction with a user;

means for accepting presentation of a token by a user for payment of the purchase transaction, the token having a user identification associated therewith; and

means for providing purchase transaction information to the acquiring bank via the network to enable the acquiring bank to add reward points to a merchant reward point account associated with the merchant and the user.

52. The system of claim 51 wherein the purchase transaction is a credit card transaction, the token is a credit card, and the user identification number associated therewith is the user'"'"'s credit card number.

53. The system of claim 51 wherein the purchase transaction is a non-credit transaction, the token is a credit card, and the user identification number associated therewith is the user'"'"'s credit card number, wherein the user may earn reward points into the user'"'"'s reward point account associated with a merchant by presenting the credit card to the merchant only for purposes of referencing the user'"'"'s reward point account with the acquiring bank.

54. The system of claim 51 wherein the purchase transaction is a debit card transaction, the token is a debit card, and wherein the user identification number associated therewith is the account number on the debit card.

55. The system of claim 51 wherein the token is a merchant loyalty card, and wherein the user identification number associated therewith is an account number associated with the loyalty card.

56. The system of claim 51 wherein the token is a smart card, and wherein the user identification number associated therewith is an account number associated with the smart card.

57. The system of claim 51 wherein the token is a stored value card, and wherein the user identification number associated therewith is an account number associated with the stored value card.

58. The system of claim 51 wherein the token is a credit union card, and wherein the user identification number associated therewith is an account number associated with the credit union card.

59. The system of claim 51 wherein the token is in intangible form.

60. The system of claim 59 wherein the token is the user'"'"'s social security number.

61. The system of claim 59 wherein the token is a personal identification number (PIN).

62. The system of claim 51 wherein the means for providing purchase transaction information to the acquiring bank via the network to enable the acquiring bank to add reward points to a merchant reward point account associated with the merchant and the user comprises means for transmitting an instruction to the acquiring bank to add reward points to the merchant reward point account associated with the merchant and the user.

63. The system of claim 51 wherein the acquiring bank comprises means for automatically adding reward points to the merchant reward point account associated with the merchant and the user based on a previously defined rule.

64. The system of claim 63 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on an item purchased by the user.

65. The system of claim 63 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on a purchase price of an item purchased by the user.

66. The system of claim 63 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on the geographic location of the merchant.

67. The system of claim 63 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on the date of the purchase transaction.

68. The system of claim 63 wherein the previously defined rule provides for the acquiring bank to automatically add reward points to the merchant reward point account associated with the merchant and the user based on the time of day of the purchase transaction.

79. The system of claim 51 in which a cluster of participating merchants is established, each of which have merchant reward point accounts established with an acquiring bank.

80. The system of claim 79 in which reward points from a reward point account associated with one of the participating merchants in the cluster may be redeemed with another participating merchant in the cluster.

81. The system of claim 80 in which reward points from a reward point account associated with a merchant that is not a participating merchant in the cluster may not be redeemed with a participating merchant in the cluster.

82. The system of claim 51 further comprising:

a database comprising a plurality of reward point exchange accounts, each reward point exchange account associated with a user;

means for allowing the selection of reward points from each of a plurality of merchant reward point accounts associated with the user for exchange into the reward point exchange account; and

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

83. The system of claim 82 wherein the user redeems aggregated reward points from the user'"'"'s reward point exchange account by

executing a redemption purchase transaction with a merchant;

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

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

84. The system of claim 52 wherein a cluster of participating merchants are established, each of which have merchant reward point accounts established with the acquiring bank;

reward points are able to be aggregated from each of the participating merchants in the cluster into the user'"'"'s reward point exchange account; and

reward points are not allowed to be aggregated from a merchant which is not a member of the cluster.

85. The system of claim 84 wherein aggregated reward points may be redeemed only with merchants that are members of the cluster.

86. The system of claim 83 wherein the reward point exchange database is administered by an operator on the network.

87. The system of claim 83 wherein the reward point exchange database is administered by an acquiring bank.

88. The system of claim 83 wherein reward points from an independent reward point system may be aggregated into the reward point exchange account.

89. The system of claim 83 wherein the reward point exchange database is administered by an issuing bank.

90. The system of claim 51 wherein the number of reward points added to the merchant reward point account is a percentage of a purchase price associated with the purchase transaction.

91. The system of claim 51 wherein the network is a credit card network comprising a plurality of issuing banks, a plurality of acquiring banks, and a plurality of merchants.

92. The system of claim 51 wherein the network is a global communications network.

93. The system of claim 92 wherein the global communications network is the Internet.

94. The system of claim 51 wherein the network is a wireless network.

95. The system of claim 51 wherein the network is an interactive television network.

96. The system of claim 51 wherein the user executes the purchase transaction at a physical point of sale associated with the merchant and the user physically presents the token to the merchant.

97. The system of claim 51 wherein the user executes the purchase transaction via a web site associated with the merchant, and the user enters the user identification associated with the token to the web site.

100. The system of claim 82 wherein the user indicates the aggregation of selected reward points into the reward point exchange account via a web site over the Internet.