Multi-tier pricing of individual products based on volume discounts

Abstract

A point of sale system or other computer system stores a product pricing database in which a full price and discount prices corresponding to one or more discount pricing tiers are stored for each product available for sale. Each of the discount prices for a given product has an associated threshold purchase total that has to be satisfied before the discount price is applied to a transaction. When a transaction occurs, the purchase total for the transaction is first calculated on the basis of full retail prices for the products and the purchase total for the transaction is compared with one or more threshold purchase totals which correspond to the discount pricing tiers. If a discount pricing tier is applicable (e.g. the calculated purchase total for the transaction is at least equal to a threshold purchase total), the appropriate discount prices for each product in the transaction are retrieved and used to calculate a reduced purchase total for the transaction. Qualification for discount pricing can also be based on, for example, a customer's purchasing history, or the number of a certain type of product included in the transaction instead of the purchase total of a transaction.

Description

CROSS-REFERENCE TO RELATED APPLICATIONS [0001] The following co-pending, commonly-owned, U.S. patent applications are related to the present application: U.S. patent application Ser. No. 09 / 166,267, entitled “METHOD AND APPARATUS FOR DETERMINING A PROGRESSIVE DISCOUNT FOR A CUSTOMER BASED ON THE FREQUENCY OF THE CUSTOMER'S TRANSACTIONS”, filed on Oct. 5, 1998; and U.S. patent application Ser. No. 09 / 118,414, entitled “POINT-OF-SALE SYSTEM AND METHOD FOR THE MANAGEMENT OF GROUP REWARDS”, filed on Jul. 17, 1998.FIELD OF THE INVENTION [0002] The method and apparatus of the present invention relate to calculating discounted prices for products sold at retail. BACKGROUND [0003] It is a common practice for retail sellers to discount the prices of products in order to attract customers and increase sales volume. One very widespread method of discounting involves issuance of coupons. One type of coupon may be presented by the buyer when a particular product is purchased, in order to obtain ...

AI Technical Summary

Benefits of technology

[0014] The discounting methods and apparatus of the present invention permit the seller to predetermine and store one or more levels of discount prices on a product-by-product basis. The seller may therefore be able to carefully balance the reduction in profit margin for each product with the overall level of spending made by the customer. For example, the discount prices of a given product may have a predefined relationship with the retail price of a the product. For example, the discount price may be set such that the difference between the retail price and the discount price for a high margin product is substantially greater than the difference between the retail price and the discount price of a low margin product. As a result, the benefit received by the retailer in generating additional sales volume can be set to outweigh the reduction in profit margins resulting from the discounts.

Problems solved by technology

These include membership club “superstores” that offer discounted prices on all products sold but are not open to the general public.

On the other hand, across-the-board discount offers may be disadvantageous to the retailer, since some customers may concentrate their purchases on products which carry a low profit margin.

When this occurs, the retailer may find that additional revenues generated by the promotion do not translate into much, if any, additional profit.

None of the known discounting and promotional techniques has fully addressed the need to balance the attractive features of discounting with preservation of profit margins on the products to be sold.

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