U.S. patent application number 14/801704 was filed with the patent office on 2015-11-12 for system and method for card linked reward exchange account.
The applicant listed for this patent is SIGNATURE SYSTEMS LLC. Invention is credited to Richard Postrel.
Application Number | 20150324834 14/801704 |
Document ID | / |
Family ID | 22491982 |
Filed Date | 2015-11-12 |
United States Patent
Application |
20150324834 |
Kind Code |
A1 |
Postrel; Richard |
November 12, 2015 |
SYSTEM AND METHOD FOR CARD LINKED REWARD EXCHANGE ACCOUNT
Abstract
A system and method for operating a reward points accumulation
and redemption program wherein a user earns rewards from a
plurality of independent reward issuing entities, with each
tracking the user's earned rewards. A trading server accumulates
some or all of the user's earned rewards from the reward servers
and credits the accumulated rewards into a single reward exchange
account associated with the user. The user may then select an item
for purchase with the accumulated rewards. The item is provided to
the user in exchange for a subset or all of the rewards. Reward
points may also be redeemed in exchange for services, such as the
playing of a video game or Internet access.
Inventors: |
Postrel; Richard; (Miami
Beach, FL) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
SIGNATURE SYSTEMS LLC |
Miami Beach |
FL |
US |
|
|
Family ID: |
22491982 |
Appl. No.: |
14/801704 |
Filed: |
July 16, 2015 |
Related U.S. Patent Documents
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Application
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Filing Date |
Patent Number |
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14064560 |
Oct 28, 2013 |
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14801704 |
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13900815 |
May 23, 2013 |
8612290 |
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14064560 |
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12900015 |
Oct 7, 2010 |
8478640 |
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13900815 |
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11380036 |
Apr 25, 2006 |
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12900015 |
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11128116 |
May 11, 2005 |
7096190 |
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11380036 |
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10601317 |
Jun 20, 2003 |
6947898 |
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11128116 |
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09602222 |
Jun 23, 2000 |
6594640 |
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10601317 |
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60140603 |
Jun 23, 1999 |
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Current U.S.
Class: |
705/14.27 |
Current CPC
Class: |
G06Q 30/0208 20130101;
G06Q 30/0239 20130101; G06Q 30/0207 20130101; G06Q 30/0223
20130101; G06Q 30/02 20130101; G06Q 30/0236 20130101; G06Q 20/343
20130101; G07F 17/3255 20130101; G06Q 30/0212 20130101; G06Q
30/0226 20130101; G06Q 30/0215 20130101; G06Q 30/0227 20130101;
G06Q 20/12 20130101; G06Q 30/0228 20130101; G06Q 30/0225 20130101;
G06Q 30/0209 20130101; G06Q 20/06 20130101; G06Q 30/0229 20130101;
G06Q 30/06 20130101; G06Q 40/04 20130101; G06Q 20/22 20130101; G06Q
30/0233 20130101; G06Q 30/0222 20130101 |
International
Class: |
G06Q 30/02 20060101
G06Q030/02 |
Claims
1-29. (canceled)
30. A method of a user executing a purchase transaction with a
merchant computer comprising the steps of: a reward exchange
computer determining from a reward server computer a quantity of
reward points previously stored in a reward account associated with
a user, a user computing device receiving from the reward exchange
computer: (i) a display of the quantity of reward points determined
by the reward exchange computer to have been previously stored in
the reward account, and (ii) computer-based controls for the user
via the user computing device to designate a quantity of reward
points from the reward account for exchange into a reward exchange
account stored on the reward exchange computer and associated with
the user, the user computing device sending to the reward exchange
computer instructions that designate the quantity of reward points
from the reward account to be exchanged into the reward exchange
account by the reward exchange computer, the reward exchange
computer requesting the reward server computer to decrease the
reward account by the designated quantity of reward points,
increasing the reward exchange account by a corresponding number of
reward points based on a predetermined rate of exchange, and
receiving consideration conveyed by the reward server computer
corresponding to the quantity of reward points decreased in the
reward account; the user presenting to a merchant computer for
payment for a transaction a portable token linked to the reward
exchange account, the reward exchange computer receiving from the
merchant computer a payment request including information for the
portable token for payment for the transaction, and the reward
exchange computer redeeming reward points from the reward exchange
account for use as consideration in the transaction.
31. The method of claim 30 wherein the portable token is a credit
card.
32. The method of claim 30 wherein the portable token is a debit
card.
33. The method of claim 30 wherein the portable token is a stored
value card.
34. The method of claim 30 further comprising the step of using a
credit card infrastructure with the portable token to link to the
user's reward exchange account.
35. The method of claim 34 wherein the credit card infrastructure
comprises the reward exchange computer with the reward exchange
account.
36. A system comprising a user computing device, a merchant
computer, a reward server computer comprising a reward account
associated with a user, and a reward exchange computer comprising a
reward exchange account associated with the user, the reward
exchange computer interconnected with the merchant computer and the
reward server computer, wherein the reward exchange computer is
programmed to: determine from the reward server computer a quantity
of reward points previously stored in the reward account, send to
the user computing device (i) a display of the quantity of reward
points determined by the reward exchange computer to have been
previously stored in the reward account, and (ii) computer-based
controls for the user via the user computing device to designate a
quantity of reward points from the reward account for exchange into
the reward exchange account stored on the reward exchange computer;
receive from the user computing device instructions that designate
the quantity of reward points from the reward account to be
exchanged into the reward exchange account by the reward exchange
computer, request the reward server computer to decrease the reward
account by the designated quantity of reward points, increase the
reward exchange account by a corresponding number of reward points
based on a predetermined rate of exchange, receive consideration
conveyed by the reward server computer corresponding to the
quantity of reward points decreased in the reward account, receive
from the merchant computer a payment request including information
for a portable token linked to the reward exchange account for
payment for a transaction with the user computing device, and
redeem reward points from the reward exchange account for use as
consideration in the transaction.
37. The system of claim 36 wherein the portable token is a credit
card.
38. The system of claim 36 wherein the portable token is a debit
card.
39. The system of claim 36 wherein the portable token is a stored
value card.
40. The system of claim 36 wherein the merchant computer and the
reward exchange computer are interconnected to each other via a
credit card infrastructure.
Description
BACKGROUND OF THE INVENTION
[0001] The present invention relates to electronic bartering
systems that allow users to trade or redeem reward points, such as
those already accumulated in airline frequent flyer programs, into
an account for redeeming products and services offered over the
Internet. This would allow users to use their frequent flyer (or
frequent car rental, frequent dining, etc.) points for products or
services other than those typically offered by the point sponsor.
The points would be sold back to the airline (or other type of
issuing entity). The system would also allow for purchase by users
of points traded in by other users, such that points are
redistributed without incurring a transaction directly with the
airline or other issuing entity. The system also allows for
manufacturers and producers of goods to put overstocked or
discontinued, end of run products into a liquidation process that
can be exchanged for points.
[0002] In order to attract and retain business customers, airlines,
hotels, car rental companies, chain retailers, telecom providers,
etc. have historically introduced frequent use programs that offer
awards of "frequent flyer miles" or other such incentives schemes
based on the distance traveled or use by that customer. Competition
has forced airlines to modify the manner in which mileage was
acquired to include travel related purchases by consumers. For
example, the dollar-based cost of a ticket purchased may be awarded
as mileage to a client account. Within the past several years,
credit card companies or other retailers and etailers have
co-branded credit cards in the name of the airlines and the credit
card company where each dollar spent using the card is recorded as
a mile of travel or point in the award program. These cards may
additionally award bonus miles in coordination with user purchases
of preferred products or flights during preferred times.
[0003] U.S. Pat. No. 5,774,870, FULLY INTEGRATED, ON-LINE
INTERACTIVE FREQUENCY AND AWARD REDEMPTION PROGRAM, issued to
Netcentives, Inc. on Jun. 30, 1998. The '870 patent provides a
system whereby the user can make purchase of products over the
Internet and receive award points, which are stored in an
associated database. The user can subsequently view an award
catalog to determine which awards he may be able to redeem based on
the number of points in his account. This patent does not teach,
however, the ability of a user to trade-in his points accumulated
in a pre-existing frequent flyer account in order to make purchases
of products from the award catalog or allow the points to be pooled
with other programs in order to gain further purchasing power.
[0004] The ClickRewards program site appears to operate in the same
fashion as that described in the '870 patent; i.e. it allows users
to gain points (called "ClickMiles") for making an online purchase
of a product through an associated web site. For example,
ClickMiles may be awarded for a purchase of Gap products at the Gap
web site. The ClickMiles can ultimately be redeemed for frequent
flyer miles, for example at one of several major airlines. Another
web site, www.webflyer.com, is associated with ClickRewards and
provides ClickMiles for purchasing frequent flyer-related goods,
such as guidebooks. The ClickMiles Reward Catalog allows the user
to redeem the ClickMiles for merchandise in the alternative to
frequent flyer miles. For example, a CD can be obtained from CDNow
by redeeming 900 ClickMiles.
[0005] Although the ClickRewards program allows a user to redeem
accumulated points for obtaining merchandise over the Internet, it
does not allow for the redemption of frequent flyer miles from a
pre-existing account to be traded for reward points.
[0006] U.S. Pat. No. 5,794,210, ATTENTION BROKERAGE, issued on Aug.
11, 1998 to CyberGold, Inc. The '210 patent describes a system that
makes immediate payment to a user for paying attention to an
advertisement or other "negatively priced" information distributed
over the Internet. A special icon or other symbol displayed on a
computer screen may represent compensation and allow users to
choose whether they will view an ad or other negatively priced
information and receive associated compensation. The points
accumulated can then be used to purchase "positively priced
information" or products.
[0007] The CyberGold web site, www.cybergold.com, describes an
"earn and spend" community in which users earn "cash" online, for
example by visiting a portal site. The earnings can then be used to
make online purchases, such as software.
[0008] Again, although the '210 patent and the CyberGold web site
describe an incentive system that allows users to purchase products
or services over the Internet, neither teaches the ability of the
redeeming frequent flyer miles from a pre-existing account for
reward points.
[0009] U.S. Pat. No. 5,025,372, SYSTEM AND METHOD FOR
ADMINISTRATION OF INCENTIVE AWARD PROGRAM THROUGH USE OF CREDIT,
issued on Jun. 18, 1991 to Meridian Enterprises, Inc. The '372
patent describes an incentive award program in which credit is
awarded to participants based on the participant meeting a
designated level of performance under the system. This patent does
not teach the ability to increase the reward points in a user's
account by redeeming points from a pre-existing account such as a
frequent flyer mileage program.
[0010] With regard to FIG. 1, a model of the frequent flyer systems
of the prior art is presented. Two different airlines servers are
shown surrounded by their related marketing partners. In order to
lure more business travelers, the airlines have established
marketing agreements with travel related companies to provide the
business traveler with a more robust way to generate rewards in the
form or frequent flyer miles. These marketing arrangements or
associations have typically involved credit card companies, phone
companies, hotel chains and car rental companies. Any purchases
made through these "co-branded" partners were then awarded to the
user periodically. Bonus miles or points may additionally be
accumulated based on the user's actions in response to offers made
by the airline or in coordination with the partner company. For
example, phone companies offer bonus miles to users based on the
user's agreement to change phone service. These points are obtained
by the partner companies by purchasing them from the issuing entity
for redistribution as an incentive to utilize their particular
goods and/or services. FIG. 2 shows some sample co-branded cards
that are representative of marketing agreements between TWA,
Sprint, and Mastercard. In order to receive these benefits, the
user must sign up with each of the partner companies separately and
provide the frequent flyer account number that is to receive the
credited miles. A user either making phone calls or purchases in
accordance with the agreements made with each of these partners
will first accumulate a value on the partner's system which in turn
is periodically updated on the airline server to reflect the value
earned during that period. FIG. 3 is representative of a typical
user account that shows various earnings in the system transferred
in from any of the co-branded partners. The records of the table in
FIG. 3 identify the source of the rewards, the dates they were
recorded and the number of miles associated with that transaction.
The user can view the accumulated miles by accessing the airline
server or by tracking the individual value reported to the user
through the various bills the user receives from each of the
co-branded partners.
[0011] The prior art does not provide for a consumer to utilize
relatively small amounts of reward points in any manner. In
addition, a consumer often can only redeem points in an
airline-related manner (i.e. to obtain a free ticket or upgrade
from coach to first class). This prior art does not recognize the
need for a consumer to exchange reward points for non-travel
related goods, and in particular renders relatively small numbers
of points useless. For example, a consumer that does not travel
often may have 500 points in United Airlines, 700 points in USAir,
and 1000 points in TWA, each of which is relatively useless in the
prior art.
[0012] What is desired therefore, is a system where users may
submit frequent flyer awards or credits accumulated for other types
of transactions for redemption or translation into a form readily
acceptable by a participating merchant. An exchange rate will be
established for the relative consideration received by the
companies involved in the transaction. A user should be able to
pool the various earned rewards that may exist in currently
separate server systems where the resulting combined value may be
used by a user of the system to acquire items of equivalent value.
In another embodiment, the award program looking to reduce frequent
flyer liabilities may contact users and arrange for a transfer of
the reward miles into a value (which may be predetermined) to be
credited to the trading system reward. Alternatively, the points
may be bid for in an auction environment where points may be used
to bid for certain awards. A user who has earned frequent flyer
miles or rewards on several sites insufficient to receive any
direct value for their mileage may be able to pool the miles
acquired from several different air carriers to transfer the awards
accumulated to the system of this invention. The user may have the
selected items delivered to the user by performing a purchase
request by various means such as over the Internet, dialing a toll
free number for placing an order, or any other means of placing an
order that will accept payment from this system.
SUMMARY OF THE INVENTION
[0013] This invention allows a user to purchase goods or services
using accumulated award points held by a variety of award programs.
A frequent flyer program is typical of the systems to be
encompassed by this invention. Tie-in promotions have been
introduced over the past several years that have allowed purchases
for goods and services such as hotel or car rentals to accumulate
award miles that are then recorded on the airline award system.
More recently credit card companies offer cards where a mile award
is made for every dollar spent using that credit card. These cards
may additionally award bonus miles in coordination with user
purchases of preferred products.
[0014] A system and method are disclosed where the system allows
the user to redeem the accumulated reward points from a plurality
of reward entities for exchange with a merchant. The user requests
process for redemption of the pre-accumulated reward points
comprises the steps of the user requesting, via a user computer, a
trading server computer to obtain reward points from a reward
server associated with a rewarding entity with which the user has
reward points. The reward server computer decreases the users
reward account by the requested number of reward points. The reward
server computer conveys consideration to the trading server
computer, where the consideration corresponds to the number of
reward points decreased in the account of the reward server. The
trading server computer increases the reward exchange account on
the trading server associated with the user by the requested number
of points. The trading server receives the consideration from the
reward server computer. Following or anticipating this conversion
into the trading server, the user requests a purchase of an item
from an associated merchant computer by selecting the item to be
purchased from a plurality of available items. The trading server
computer confirms that the user's reward exchange account contains
sufficient points to purchase the selected item. The user may
purchase additional points in the event that his account does not
contain the requisite number of points for making the purchase
transaction. The trading server computer requests the merchant
computer to deliver the item to the user. The trading server
decreases the user exchange account by the number of points
corresponding to the purchased item and the trading server computer
conveys consideration to the merchant computer equivalent to the
required points. In another embodiment, the user may redeem rewards
at the reward server following the selection of an item to be
acquired. Policies may be established to automatically contact each
of the reward servers according to a user procurement profile to
transact the required payment. This profile may indicate the order
of redemption and method of providing funds sufficient to cover the
purchase after redeemable points are exhausted. After redemption
the consideration is transferred to the respective merchant.
BRIEF DESCRIPTION OF THE DRAWING
[0015] FIG. 1 is representative of the prior art marketing
arrangements used in reward programs;
[0016] FIG. 2 is a representation of the co-branded partners in a
prior art award program;
[0017] FIG. 3. is a sample of the prior art reward summary from an
airline frequent flyer system;
[0018] FIG. 4 is a block diagram of the components of the present
invention;
[0019] FIG. 5 is a block diagram of the system components of the
present invention;
[0020] FIG. 6 is a data flow diagram of the process for a user to
redeem rewards;
[0021] FIG. 7 is a data flow diagram of the user request for
purchase of an item at a merchant site;
[0022] FIG. 8 is a data flow diagram of the user account creation
process on the trading server;
[0023] FIG. 9 is a data flow diagram of the offer process by a
reward program or by a merchant;
[0024] FIG. 10 is a data flow diagram of the process where a user
may be redirected from a reward program to the trading server of
the present invention.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT
[0025] With reference to FIG. 4, a plurality of reward server
computers 10, 12, 14, a trading server 20, a merchant computer 30
and a user computer 40 are shown in communication with a network
40. The network may comprise any type of communication process
where computers may contact each other. The present invention will
be described with respect to an Internet-based network where the
reward server computer 10 is associated with an airline frequent
flyer program. Any type of reward server may also be used in this
system. The reward server computer may be a credit card reward
program such as offered by American Express where the user earns
rewards based on purchases or an advertising based award program
where the user earns rewards by selecting advertising content.
[0026] A user of this system may acquire and accumulate rewards
through any prior art means such as shown on FIG. 1, which are then
posted in a user's reward account 52 that is accessible through the
reward server computer 10. The trading server computer 20 is in
communication through the network 2 with a user on a user computer
40 and is additionally able to connect to the reward server
computers 10,12,14 through the network 2 in accordance with
techniques well known in the art for Internet communications. The
merchant computer 30 is representative of any site that can
communicate with the network that has goods or services for sale or
trade. The merchant may have a direct relationship with the trading
server where the direct relationship allows for a streamlined
process for allowing a user to acquire products offered via the
merchant computer. Alternatively, the merchant computer may be an
independent merchant that does not currently have a profile defined
in the trading server that will accept payment from another
computer system in any one of well known e-commerce
embodiments.
[0027] The rewarding entities may be any type of entity that has a
service for allocating points or consideration for user actions.
The reward server computers 10,12, 14 may be of any type of
accessible server capable of holding data about a user along with a
corresponding earned value that is negotiable for other goods,
services, or points of another system. In the preferred embodiment,
the airline reward server computer 10 may refer to one or several
different airlines that have frequent flyer programs or the like.
The credit card reward server computer 12 may refer to any type and
number of credit card server systems capable of holding, increasing
or decreasing a user's earned rewards acquired according to the
terms of the credit card program to which the user has enrolled.
The marketing reward server computer 14 may refer to one or a
multitude of network accessible marketing systems that allow a user
to have an account where points or other redeemable value may be
stored, updated and redeemed by a user. The trading server computer
may be any type of computer system that allows users to access the
system in order to perform the processes involved in this
invention. In the preferred embodiment all of the systems described
are accessible through the Internet and the user may freely
navigate to any site by means well known in the art.
[0028] The present invention allows issuers who originally sold
reward points in their program for use as an incentive by third
parties to repurchase points at a substantial discount, thereby
reducing their liability and allowing for a trading strategy that
enables points to continually be sold and repurchased. This may be
a separate accounting procedure than what is used for points that
are granted.
[0029] The method of allowing the user to redeem the accumulated
reward points from one or more of a plurality of reward entities
will now be described with respect to FIG. 4 and the data flow
diagram of FIG. 6. The trading server system would allow users to
"log in" to access the functionality provided where the user may
interact with applications, forms or controls. For example, the
user may view his account information by using a web browser to
enter the appropriate identification information and then select
buttons, links or other selectable objects to navigate to the part
of the system desired. The user, from the user computer, makes a
request to the trading server computer 20 at step 102, requesting
redemption through the network 2 for a portion of the
pre-accumulated reward points stored for the user in one of the
rewarding entities. A user reward account 52 is associated with
each of the reward servers but is only shown in FIG. 4 connected to
the airline server for sake of clarity. The user may interactively
select rewards to be redeemed, or the system may determine which
rewards are to be redeemed based on a previously defined user
profile rule. The trading server computer 20 "obtains" the reward
points from a reward server 10, 12, 14 stored in the user's account
52 by contacting the appropriate reward server at step 110
according to the user's requirements, by using the connection
parameters as defined in a database 54 on the trading server as
shown in FIG. 5. In one embodiment, the trading server retrieves
reward account balance information at step 114 from the reward
server for the user. In another embodiment, the trading server
transfers as part of the communication 110, the requested reward
mileage to be redeemed. The reward server computer 10 decreases the
users reward account 52 by the requested number of reward points.
The term point is used to reference any earned value that has a
cash equivalent or negotiable worth as in "frequent flyer" point or
mile. The reward server computer 10 conveys consideration to the
trading server computer 20 where the consideration corresponds to
the number of reward points decreased in the user's account 52 on
the reward server 10. For example, the consideration may be in the
form of a monetary credit to an account that exists between the
trading server and the reward server, that gets paid at the end of
a predefined billing cycle (i.e. every month). The trading server
computer 20 increases the reward exchange account 54 associated
with the user by the received number of points. The trading server
computer 20 in turn, receives the consideration from the reward
server computer 10.
[0030] In the second part of the transaction (see FIG. 7), the user
from a user computer 40 may make a request 150 to purchase an item
from an associated merchant computer 30. In the preferred
embodiment, the merchant computer system will be a networked
computer system accessible via the Internet. The user would visit
the site by selecting on a link from the trading server's web site
or by entering the name or address of the destination site. The
user may identify one or many items to be acquired from one or
several merchants 30. The trading server computer 20 would confirm
that the user has sufficient points to purchase the selected item
by checking the user's reward exchange account 54. The trading
server computer 20 would request the merchant computer to deliver
the item to the user. The user delivery information may be
retrieved from the trading server computer 20 or may be supplied in
some other manner. The trading server computer 20 would decrease
the user exchange account 54 by the number of points corresponding
to the purchased item. The trading server computer 20 conveys
consideration to the merchant computer 30 equivalent to the cost of
the item by means well known in the art of electronic commerce (eg.
by a preexisting account, credit card, etc.) In the alternative,
the consideration may be a direct transfer of points to an account
associated with the merchant.
[0031] Policies and profiles may be established to automatically
contact each of the reward servers according to a user redemption
profile (see FIG. 5) to transact the required payment for an item
selected by a user. This profile may indicate the order of
redemption and method of providing funds sufficient to cover the
purchase after redeemable points are exhausted. For example, if a
user has a preferred air carrier where the user would like to
retain mileage in that reward system, the user may specify a
priority of use indicating the reward resources that should be
exhausted prior to accessing the most desirable rewards. Following
the selection of an item to be acquired, the server may contact all
of the reward resources according to this profile to selectively
redeem each as required to meet the purchase price. The process may
be performed in real time or as a background process where the user
may select how the transaction should proceed. If the user exhausts
lower personal worth resources from the reward servers, the system
may be required to contact the user before the transaction is
allowed to proceed to redeem points. A classification system may
also be used to indicate rewards of similar worth. If for instance,
a frequent flyer program supports multiple classifications of miles
that may be redeemed differently, the user may optionally define
how those resources should be managed during redemption. The
redemption process would then honor those rules elected by the user
to select from several different reward programs instead of
redeeming rewards strictly on a value required from the first
reward program contacted.
[0032] FIG. 8 describes the process steps involved in enrolling a
user to utilize the trader server. The data entered by the user may
be used in determining whether a user allows unsolicited offers to
be presented from the trading server. The user's preferences for
manufactured goods services, products, travel destinations,
hobbies, interests or any other user entered criteria may be stored
in the database for subsequent use by the system. The trading
server has the ability to receive offers from reward servers or
merchants which may then be directed to users based on the database
profile information provided by the user (see FIG. 9).
[0033] The trading server may also be contacted in response to a
button or hyperlink located on a web page accessible by the user
from the airline reward server. In a similar manner, hyperlinks or
calling routines may allow a user to access a reservations system
or merchant from the trading server. The link would direct the user
to partner or associated air carriers where the points in a user
exchange account on the trading server 20 may be used to acquire
reduced fare flights.
[0034] The system used to implement the aforementioned method will
now be disclosed with respect to FIG. 5. The system is comprised of
a trading server computer connected to a network of computers where
a user interface is established whereby a user from a user computer
may access the server to request the transaction to contact a
reward server computer system. In the preferred embodiment, the
server has memory means for storing the user account information,
user profiles and rules specified by the user, system, or merchant.
The trading server also has communications means to allow users to
access the server and to allow the trading server to contact reward
servers and processing means to interpret the rules and coordinate
the contact to the respective reward servers. The processing means
is adapted to allow the user to request and exchange consideration
for rewards from reward servers. The processing means additionally
is adapted to coordinate the exchange of consideration and increase
or decrease the user exchange accounts stored in memory in response
to actions performed by the user computer, reward server and
merchants.
[0035] In the preferred embodiment, the memory means comprises a
database structure that is used to record the transactions
associated with the previously described method. Records indicating
the changes and current value of user exchange accounts are updated
according to the request processed by the processor.
[0036] In response to a request for redemption, the trading server
looks up the contact properties of the reward server to be
contacted. The user information is submitted to the reward server
to display the available points that may be redeemed. In another
embodiment, the request additionally contains a value to be
redeemed. The processor establishes a communication link with the
reward server and a transaction request is sent to the processor of
the reward server. The processor of the reward server may perform
actions that may allow or refuse the requested action. In another
embodiment, the trading server processor may be granted direct
authorization to modify the user's records in the reward server
database without analysis by the processor of the reward server. A
conversion rate may be applied to the transaction such that the
reward server reduces the available rewards in the user's account.
The reward server then transfers consideration to the trading
server that corresponds to the value reduced in the reward system.
In response to the receipt of the transfer or approval of the
transfer, the trading server increments the user account balance to
reflect the received consideration and the connection to the reward
server is dropped. A transaction log may be used to record each of
the transactions in case a reconciliation process is required at a
later time. The increase in the user's exchange account may then be
stored until a user finds an item to be purchased.
[0037] The user selects the desired object from the merchants by
indicating the type of product or service to be procured. In one
embodiment, the trading server contacts the merchant server to
return to the user a list of products that match the user's search
criteria or if the user had specified in detail what was desired,
the product may be directly acquired from a merchant. A
communication link is established between the trading server and
the merchant computer or designee for e-commerce. Direct
acquisition may be enacted by contacting the merchant computer and
supplying the user indicia, the product indicia, and the redemption
value sufficient to secure the transaction. In response to the
transaction request, the merchant computer will receive the
consideration supplied and contract for the delivery of the
product. In another embodiment, the consideration required for the
item selected is sent to the trading server where based on the
available points in the user's exchange account the trading server
will determine whether the consideration is available. An
authorization process may be incorporated at this point to request
authorization from the user or in a more simplified process, the
consideration will be transferred to the merchant computer and the
user's exchange account will be reduced. The merchant computer will
receive the consideration and will effectuate a delivery
transaction to be issued.
[0038] The goods may also be placed under direct control of a
distribution arm of the trading service so that the user places the
order with the trading service directly and the merchants are not
directly involved with the sale of the goods.
[0039] Thus, the present invention provides a liability management
system for issuers of reward points, which allows them to take
points off the books and eliminate them, if desired, at a discount
rate. This system enables the sale or repurchase of points with a
trading strategy in which points need not expire.
[0040] The present system may be implemented by means of a smart
card wherein frequent use points may be accumulated on the user's
card every time the card is used for associated application. For
example, if a user uses his smart card to pay for a hotel that
normally gives reward points, those reward points may be stored on
the smart card. Likewise, when the card is used for the purchase of
an airline ticket, the points would be added to the smart card. The
user may then redeem the accumulated reward points by inserting the
card into a vender associated with a computer connected to the
Internet. The trading process proceeds as described above, except
that the points are obtained directly from the smart rather than a
reward server.
[0041] The user may have a credit card, debit card, or stored value
card that is linked to their points account in such a way as to
permit them to pay for purchases with a merchant by using the card,
wherein the merchant uses the existing credit card payment
infrastructure as if payment were being made/authorized by a bank
linked to the credit card or debit card account, but in fact the
card is linked to the user's points account. In this manner, the
user and merchant can use the points account to pay for purchases
in a seamless manner whereby points are used for consideration
rather than or as a supplement to cash and traditional credit.
[0042] Other aspects of this invention will now be disclosed that
will enhance the reader's understanding of the application of this
invention.
[0043] The user can purchase points from the system, borrow points
from the system, etc., and basically treat the points as cash
consideration for purposes of such transactions.
[0044] The system can prioritize the order of points being traded
based on a predetermined set of rules such as in higher value
points being issued before those with a lower value.
[0045] Merchandisers also benefit from the use of this system where
another marketing channel is afforded for products that are often
purchased by frequent travelers with high disposable income.
Products and services encompassing jewelry, flowers, limousine
transport, timeshare rental may be exchangeable for points stored
in this system. Items purchased through the system may also be paid
for by a combination of points and currency which might be the case
when a user does not have enough accrued points to meet the
purchase consideration of an item selected.
[0046] It is anticipated that high quality limited access products
may benefit from the distribution methods afforded by this system.
For example, companies like DeBeers and Chanel may take advantage
of this distribution means without impacting the level of quality
or excellence associated with their products.
[0047] Manufacturers can discount or liquidate goods for points in
a manner that doesn't negatively affect the perceived value of the
goods (i.e. not in direct competition with the mainstream sales).
That is, the manufacturer can place overstocked, end of run type
goods and the like, place them in the chain of distribution for
exchange with points, and not be in direct competition with cash
sales of its mainstream products.
[0048] Resort destinations that are managed by property management
companies such as RCI may be integrated into this system where
instead of trading accommodations with only those having similar
property, it is now possible that the rental of the property may be
achieved by conversion for points.
[0049] Offers may be distributed to users of this system where
substantial rebates or reduced rates are described in the offer.
Time sensitive product offerings can also be accommodated in the
system where the value of the product is decreased according to a
life span of the product. Time sensitive product offerings such as
food products or concert tickets can have an associated diminishing
or escalating value based on the length of the offer.
[0050] Using this system it is now possible to coordinate the
products of several different providers into one package. A user of
this system may therefore select an airline, hotel, car rental and
Broadway show tickets in New York, individually or in a prepared
package from one location by trading points where the package may
not have existed before where the trading system coordinates all
aspect of the transaction and reduces the user's exchange rewards
in a corresponding manner.
[0051] Other purchasing leverage not specifically addressed
previously may also be acquired by combining the power of a pool of
high profile users of this system where these users may be
allocated access to products or services not generally distributed
to the remainder of the system users. Points collected in the
system by these users may afford them access to limited
distribution channels where higher discount levels or premium
luxury products may be acquired. Direct access to cartel products
such as diamonds, duty free items and other restricted access
product or service offerings are also accommodated through the
coordination of the trading server with these specialized service
and product providers. For example, a preferred client distribution
channel such as found in a European market for luxury goods would
be made available to users of this system where the prices for the
objects in this preferred channel may be significantly lower than
retail for objects that are typically reserved for limited
distribution at premium prices. The trading server may additionally
have exclusive rights to allocate access to certain premium
products, services, events, travel destinations or accommodations
in accordance with any right or grant permitting such allocation to
any user of the system. A distribution channel may make available
exclusive products for all or a limited amount of the members of
the system where the trading server system controls access to the
offer.
[0052] Parameters associated with the available quantity, duration,
exchange rates, etc may be input into the system to be used in the
allocation algorithm to restrict the offer. Upon user access, the
trading server would, in these cases, modify the premiums offered
to reflect the immediately attainable items for the current user
and may additionally display or provide access to premiums that may
be acquired through payment by other means (i.e. cash, charge,
debit) to make up the difference between the user's available
points and the points required to accept the offer.
[0053] In another embodiment of this invention, airlines seeking to
provide higher levels of personalized service for their business
travelers will provide access to the Internet or access to
in-flight services such as video games, for a fee or in place of
granting mileage rewards on transcontinental or transatlantic
flights. Access to video games may be afforded to the traveler
where the availability of different games depends on the number of
reward points traded in by the traveler. The rewards may be
converted using the trading server of this invention, where the
user may opt to forego collecting mileage in return for accessing
on-board entertainment provided in a standalone mode or in a linked
mode. For example, users may select to play video games, access the
Internet or utilize Email via a seatback or tray table mounted
interface and controller. The user may optionally connect a laptop
computer to an interface port of the aircraft using an Ethernet,
parallel, USB connection or proprietary connector provided by the
air carrier. In the preferred embodiment, the user would select the
connection speed and type for communications based on whether
in-flight or external services were to be accessed. Other types of
business services may additionally be used and accounted for, such
as using network printers or fax equipment. RF, satellite or
microwave based communications may be used for real time
communications where sufficient geographical coverage is
provided.
[0054] The interface would allow a user to login using the frequent
flyer account information or preferably, the trading server account
login id and password, where the user may use points awarded from
another air carrier or point server to "pay" for the services
accessed. The account balance from the trading server may be
transferred to the local controller prior to takeoff for each user
that logs in to the trading server. Once the plane has departed,
depending on the linking or access capability afforded by the air
carrier or service provider, the user's account may be modified in
real time or upon reconnection following landing, based on services
selected by the traveler. If a real time link is supported, the
user's exchange account may be periodically debited according to
the services selected and duration of use.
[0055] In another aspect of the invention, an electronic bartering
system is implemented, wherein product manufacturers, producers,
distributors, etc. can provide surplus or overstocked goods for
liquidation into the chain of supply of the system and exchange
then for points as described herein. This provides an inventory
management and liquidation system for these manufacturers and
sellers.
[0056] In addition, the value of the reward points may fluctuate as
a function of the company's performance, which may be measured by
reference to the price of its stock, revenue, earnings, or some
other parameter that is agreed to that reflects the relative
performance of the company. In this manner, companies that perform
well would provide an additional incentive to a user for using
their frequent use program rather than a competitor's program. For
example, all other parameters being the same, a user would likely
choose the Acme credit card company over the Beta credit card
company when the user determines that the Acme company performance
results in a 10% increase in the number of points otherwise earned
by using its credit card. The value may also fluctuate as a
function of the number of points outstanding or the desirability of
the issuer to reduce its liability or make it more robust.
* * * * *
References