Inverted tier rebate system

• US 20050096976A1
• Filed: 11/03/2003
• Published: 05/05/2005
• Est. Priority Date: 11/03/2003
• Status: Active Grant

• Current Assignee: DFS Services LLC (Discover Financial Services)
• Original Assignee: Discover Financial Services
• Inventors: Nelms, David W.
• Granted Patent: US 8,620,731 B2
• Time in Patent Office: Days
• US Class Current: 705/14.35
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0235 constrained by time limit or expiration date
• CPC Class Codes: G06Q 30/0241 Advertisements

Abstract

An inverted tier award system for financial alternatives to currency is presented, wherein a consumer using the financial alternative to currency is rewarded based on the purchases made by the consumer within a given time frame. Award rates can vary based on the total value of purchases made within a given time frame, with higher award rates assigned to lower value ranges to motivate those consumers to increase their purchases made using the financial alternative to currency. Additionally, higher award rates at lower value ranges can increase consumer loyalty and provide consumers access to their awards more quickly and more often. The award rates or award access can be modified to achieve greater profitability or to further other goals of the implementing organization.

Claims

1. A financial transaction system comprising:

a financial institution;

a financial alternative to currency issued by the financial institution to one or more consumers; and

a participating merchant network accepting the financial alternative to currency to provide goods or services to the one or more consumers and receive reimbursement for the goods and services from the financial institution;

wherein the financial institution charges the one or more consumers for the goods or services purchased using the financial alternative to currency and provides to each of the one or more consumers an award related to a total value of goods or services purchased by each of the one or more consumers using the financial alternative to currency, the award being related to the total value of goods or services purchased through an inverted tier structure comprising a first tier corresponding to a first value range of goods or services purchased and providing a first award rate and a second tier corresponding to a second value range of goods or services purchased and providing a second award rate, wherein the second value range is higher than the first value range and the second award rate is lower than the first award rate.

2. The financial transaction system of claim 1, wherein the award is determined by applying the first award rate to the total value of goods or services purchased that are within the first value range and by applying the second award rate to the total value of goods or services purchased that are within the second value range.

3. The financial transaction system of claim 1, wherein the first value range, the first award rate, the second value range, and the second award rate are selected to increase spending by those consumers of the one or more consumers who generally do not reach the second value range and to avoid significantly affecting those consumers of the one or more consumers who generally reach the second value range.

4. The financial transaction system of claim 1, wherein the first value range and the second value range pertain to the total value of goods or services purchased within a predetermined time frame.

5. The financial transaction system of claim 1, wherein some or all of the first value range, the first award rate, the second value range, and the second award rate are increased for goods or services purchased from a promoted merchant, the promoted merchant having a promotional relationship with the financial institution.

6. The financial transaction system of claim 1, wherein the award is provided to the each of the one or more consumers in predefined increments.

7. The financial transaction system of claim 1, wherein the award is provided to the each of the one or more consumers during predefined times.

8. The financial transaction system of claim 1, wherein the financial alternative to currency is a credit card.

9. The financial transaction system of claim 1, wherein the inverted tier structure comprises a third tier corresponding to a third value range of goods or services purchased and providing a third award rate, wherein the third value range is higher than the second value range and the third award rate is lower than the second award rate.

10. A method for increasing a financial institution'"'"'s profit from a financial alternative to currency provided to one or more consumers, the method comprising:

receiving requests for reimbursement from one or more members of a participating merchant network accepting the financial alternative to currency, the one or more members providing goods or services to the one or more consumers using the financial alternative to currency;

reimbursing the one or more members of the participating merchant network;

transmitting periodically to each of the one or more consumers a request for repayment of the reimbursements related to each of the one or more consumers;

totaling the reimbursements over a predetermined time period corresponding to each of the one or more consumers; and

providing an award to each of the one or more consumers related to the corresponding totaled reimbursement for each of the one or more consumers through an inverted tier structure comprising a first tier corresponding to a first value range of reimbursements and providing a first award rate and a second tier corresponding to a second value range of reimbursements and providing a second award rate, wherein the second value range is higher than the first value range and the second award rate is lower than the first award rate.

11. The method of claim 10, wherein the award is determined by applying the first award rate to the corresponding totaled reimbursement for each of the one or more consumers that is within the first value range and by applying the second award rate to the corresponding totaled reimbursement for each of the one or more consumers that is within the second value range.

12. The method of claim 10, the first value range, the first award rate, the second value range, and the second award rate are selected to increase spending by those consumers of the one or more consumers who generally do not reach the second value range and to avoid significantly affecting those consumers of the one or more consumers who generally reach the second value range.

13. The method of claim 10, wherein some or all of the first value range, the first award rate, the second value range, and the second award rate are increased for reimbursements to a promoted merchant, the promoted merchant having a promotional relationship with the financial institution.

14. The method of claim 10, wherein the award is provided to each of the one or more consumers in predefined increments.

15. The method of claim 10, wherein the award is provided to each of the one or more consumers during predefined times.

16. The method of claim 10, wherein the financial alternative to currency is a credit card.

17. The method of claim 10, wherein the inverted tier structure comprises a third tier corresponding to a third value range of reimbursements and providing a third award rate, wherein the third value range is higher than the second value range and the third award rate is lower than the second award rate.

18. An inverted tier award system for increasing a consumer'"'"'s use of a financial alternative to currency by providing the consumer an award for their use of the financial alternative to currency, the inverted tier award system comprising:

a first tier corresponding to a first value range of purchases made by the consumer using the financial alternative to currency and providing a first award rate; and

a second tier corresponding to a second value range of purchases made by the consumer using the financial alternative to currency and providing a second award rate, wherein the second value range is higher than the first value range and the second award rate is lower than the first award rate.

19. The inverted tier award system of claim 18, wherein the award provided to the consumer is determined by applying the first award rate to a total value of purchases made by the consumer using the financial alternative to currency that are within the first value range and by applying the second award rate to a total value of purchases made by the consumer using the financial alternative to currency that are within the second value range.

20. The inverted tier award system of claim 18, wherein the first value range, the first award rate, the second value range, and the second award rate are selected to increase spending by the consumer, if the consumer generally does not reach the second value range and to avoid significantly affecting spending by the consumer, if the consumer generally does reach the second value range.

21. The inverted tier award system of claim 18, wherein the first value range and the second value range pertain to a total value of purchases made by the consumer using the financial alternative to currency within a predetermined time frame.

22. The inverted tier award system of claim 18, wherein the award is provided to the consumer in predefined increments.

23. The inverted tier award system of claim 18, wherein the award is provided to the consumer during predefined times.

24. The inverted tier award system of claim 18, wherein the financial alternative to currency is a credit card.

25. The inverted tier award system of claim 18 further comprising a third tier corresponding to a third value range of purchases made by the consumer using the financial alternative to currency and providing a third award rate, wherein the third value range is higher than the second value range and the third award rate is lower than the second award rate.