Method and system for providing price protection for commodity purchasing through price protection contracts

• US 20080195432A1
• Filed: 02/12/2007
• Published: 08/14/2008
• Est. Priority Date: 02/12/2007
• Status: Active Grant

• Current Assignee: Pricelock, Inc.
• Original Assignee: Pricelock, Inc.
• Inventors: Painter, Scott, Fell, Robert M., Bonsignore, Michael R., Magnuson, Gary A., Reed, Brian P.
• Granted Patent: US 8,156,022 B2
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/063 Operations research, analysis or management
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 30/0201 Market modelling; Market analysis; Collecting market data
• CPC Class Codes: G06Q 30/0206 Price or cost determination based on market factors
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Systems and methods for the provisioning of price protection contracts which provide price protection against adverse fluctuations in the retail price of a commodity to a consumer are disclosed. While these price protection contracts may pertain to almost any type of commodity, certain embodiments of the present invention may provide systems and method for allowing a consumer to obtain price protection on the purchase of fuel. Specifically, embodiments of the present invention may provide the ability for fleet managers to obtain a price protection contract for the purchase of fuel where the price protection contract specifies at least one lock price, quantity, locale and time period such that the price protection contract may guarantee the right to aggregately purchase the quantity of fuel in the locale at the lock price during the time period.

Claims

1. A method for providing price protection for commodity purchasing, comprising:

obtaining data regarding desired price protection from a consumer; and

providing a price protection contract for a commodity to a consumer where the price protection contract has an associated quantity, time period, lock price and locale wherein the lock price is determined based upon a strike price matrix comprising at least one strike price and associated insurance cost and for a set of purchases occurring in the locale during the time period the consumer has a right to aggregately purchase the quantity of the commodity and for each purchase the commodity may be purchased at the lock price if a retail price of the commodity at a time of the purchase is above the lock price or at the retail price otherwise.

2. The method of claim 1, wherein the commodity is fuel and the price protection contract has an associated fuel grade.

3. The method of claim 2, further comprising:

determining a set of price protection contract based upon the data regarding the desired price protection; and

presenting the set of price protection contracts to the consumer, wherein the consumer selects the price protection contract from the set of price protection contract.

4. The method of claim 2, further comprising obtaining pre-payment for the quantity of fuel at the lock price.

5. The method of claim 4, further comprising refunding any unused pre-payment to the consumer at the end of the time period.

6. The method of claim 5, further comprising placing the pre-payment in an interest earning account.

7. The method of claim 4, wherein the consumer is charged a fee to obtain the price protection contract.

8. The method of claim 2, further comprising determining the lock price, wherein determining the lock price comprises:

providing an aggregated demand to a financial institution;

receiving the strike price matrix from the financial institution; and

determining the lock price based on the institution strike price of the financial institution strike price matrix, the locale, the time period and the fuel grade.

9. The method of claim 8, wherein the lock price includes a markup, the markup determined based on the insurance cost.

10. The method of claim 2, wherein providing the price protection contract further comprises obtaining a right of indemnification corresponding to the price protection contract from the financial institution.

11. The method of claim 10, wherein obtaining the right of indemnification comprises paying the financial institution the insurance cost for the quantity.

12. The method of claim 11, wherein providing the price protection contract further comprises creating a virtual reserve, wherein the virtual reserve has a set of variables corresponding to the price protection contract, including the quantity.

13. The method of claim 12, wherein one of the set of variables is a price tolerance set by the consumer.

14. The method of claim 13, wherein the set of purchases occur at a set of associated retail point of sale locations in the locale.

15. The method of claim 14, wherein the set of associated retail point of sale locations comprise one or more affinity retail point of sale locations.

16. The method of claim 15, wherein the affinity retail point of sale locations provides an affinity push commission.

17. The method of claim 16, wherein the affinity retail point of sale locations pay an affinity fee.

18. The method of claim 15, further comprising processing a purchase at an associated retail point of sale location, wherein processing a purchase comprises determining if the retail price at the time of the purchase is above the lock price plus the price tolerance, wherein if the retail price is below the lock price plus the price tolerance billing the consumer at the retail price and if the retail price is above the lock price plus the price tolerance paying the associated retail point of sale location, determining a reimbursement amount and receiving this reimbursement amount from the financial institution.

19. The method of claim 18, wherein the reimbursement amount is determined based on the financial institution strike price and a price paid to the retail point of sale location.

20. The method of claim 19, wherein the price paid to the retail point of sale location is less than the retail price.

21. The method of claim 20, wherein processing the transaction further comprises subtracting a purchased quantity from the variable of the virtual reserve corresponding to the quantity.

22. The method of claim 21, further comprising:

gathering data on the purchase; and

reporting the gathered data to the financial institution.

23. The method of claim 22, wherein the financial institution pays for the gathered data.

24. A system for providing price protection for commodity purchasing, comprising:

one or more computer devices; and

a price protection system coupled to the one or more computing devices such that a consumer at a computer device may access the price protection system, the price protection system operable for;

obtaining data regarding desired price protection from a consumer; and

providing a price protection contract for a commodity to a consumer where the price protection contract has an associated quantity, time period, lock price and locale wherein the lock price is determined based upon a strike price matrix comprising at least one strike price and associated insurance cost and for a set of purchases occurring in the locale during the time period the consumer has a right to aggregately purchase the quantity of the commodity and for each purchase the commodity may be purchased at the lock price if a retail price of the commodity at a time of the purchase is above the lock price or at the retail price otherwise.

25. The system of claim 24, wherein the commodity is fuel and the price protection contract has an associated fuel grade.

26. The system of claim 25, wherein the price protection system is further operable for:

determining a set of price protection contract based upon the data regarding the desired price protection; and

presenting the set of price protection contracts to the consumer, wherein the consumer selects the price protection contract from the set of price protection contract.

27. The system of claim 25, wherein the price protection system is further operable for obtaining pre-payment for the quantity of fuel at the lock price.

28. The system of claim 27, wherein the price protection system is further operable for refunding any unused pre-payment to the consumer at the end of the time period.

29. The system of claim 28, wherein the pre-payment is placed in an interest earning account.

30. The system of claim 27, wherein the consumer is charged a fee to obtain the price protection contract.

31. The system of claim 25, wherein the price protection system is further operable for determining the lock price, wherein determining the lock price comprises:

providing an aggregated demand to a financial institution;

receiving the strike price matrix from the financial institution; and

determining the lock price based on the institution strike price of the financial institution strike price matrix, the locale, the time period and the fuel grade.

32. The system of claim 31, wherein the lock price includes a markup, the markup determined based on the insurance cost.

33. The system of claim 25, wherein providing the price protection contract further comprises obtaining a right of indemnification corresponding to the price protection contract from the financial institution.

34. The system of claim 33, wherein obtaining the right of indemnification comprises paying the financial institution the insurance cost for the quantity.

35. The system of claim 34, wherein providing the price protection contract further comprises creating a virtual reserve, wherein the virtual reserve has a set of variables corresponding to the price protection contract, including the quantity.

36. The system of claim 35, wherein one of the set of variables is a price tolerance set by the consumer.

37. The system of claim 36, wherein the set of purchases occur at a set of associated retail point of sale locations in the locale.

38. The system of claim 37, wherein the set of associated retail point of sale locations comprise one or more affinity retail point of sale locations.

39. The system of claim 38, wherein the affinity retail point of sale locations provides an affinity push commission.

40. The system of claim 39, wherein the affinity retail point of sale locations pay an affinity fee.

41. The system of claim 40, wherein the price protection system is further operable for processing a purchase at an associated retail point of sale location, wherein processing a purchase comprises determining if the retail price at the time of the purchase is above the lock price plus the price tolerance, wherein if the retail price is below the lock price plus the price tolerance billing the consumer at the retail price and if the retail price is above the lock price plus the price tolerance paying the associated retail point of sale location, determining a reimbursement amount and receiving this reimbursement amount from the financial institution.

42. The system of claim 41, wherein the reimbursement amount is determined based on the financial institution strike price and a price paid to the retail point of sale location.

43. The system of claim 42, wherein the price paid to the retail point of sale location is less than the retail price.

44. The system of claim 43, wherein processing the transaction further comprises subtracting a purchased quantity from the variable of the virtual reserve corresponding to the quantity.

45. The system of claim 44, wherein the price protection system is further operable for:

gathering data on the purchase; and

reporting the gathered data to the financial institution.

46. The system of claim 45, wherein the financial institution pays for the gathered data.

47. A method for providing price protection for fuel purchasing, comprising:

obtaining data regarding desired price protection from a consumer;

determining a set of price protection contract based upon the data regarding the desired price protection each price protection contract having a corresponding quantity, time period, lock price, fuel grade and locale, wherein each of the associated lock prices is determined based on a financial institution strike price comprising a set of strike prices and an associated insurance cost provided by a financial institution, the corresponding locale, the corresponding time period and the corresponding fuel grade;

presenting the set of price protection contracts to the consumer, wherein the consumer selects a price protection contract from the set of price protection contract;

providing the price protection contract to the consumer wherein for a set of purchases occurring in the associated locale during the associated time period the consumer has a right to aggregately purchase the associated quantity of the grade of fuel;

obtaining a right of indemnification corresponding to the price protection contract from the financial institution; and

;

processing a purchase at an associated retail point of sale location wherein processing the purchase comprises determining if a retail price at a time of the purchase is above the lock price corresponding to the price protection contract and if the retail price is below the lock price billing the consumer at the retail price and if the retail price is above the lock price paying the associated retail point of sale location, determining a reimbursement amount and receiving this reimbursement amount from the financial institution.