Method and apparatus for determining a progressive discount for a customer based on the frequency of the customer's transactions

Abstract

A system and method are disclosed for determining and applying a discount to a customer's transaction. The discount is of a progressive nature, wherein the value of a customer's discount increases if the customer meets the conditions associated with the discount. The system rewards more frequent or profitable customers with benefits such as larger increases in the discount or higher maximum discount than those awarded to less frequent or profitable customers. The discount is decreased or eliminated if the customer fails to meet the conditions associated with the discount.

Description

[0001] The present application is a continuation of U.S. patent application Ser. No. 10 / 728,226, entitled “METHOD AND APPARATUS FOR DETERMINING A PROGRESSIVE DISCOUNT FOR A CUSTOMER BASED ON THE FREQUENCY OF THE CUSTOMER'S TRANSACTIONS”, filed Dec. 4, 2003; [0002] which is a continuation of 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 issued as U.S. Pat. No. 6,687,679 B1 on Feb. 3, 2004; [0003] which is a continuation-in-part application of U.S. patent application Ser. No. 09 / 049,297, entitled “SYSTEM AND METHOD FOR TRACKING AND ESTABLISHING A PROGRESSIVE DISCOUNT BASED UPON A CUSTOMER'S VISITS TO A RETAIL ESTABLISHMENT” filed on Mar. 27, 1998. [0004] Each of the above-referenced applications is incorporated by reference herein in its entirety. CROSS-REFERENCE TO RELATED APPLICATION [0005] The present application is re...

AI Technical Summary

Benefits of technology

"The present invention provides a method and system for determining a discount for a customer based on whether the customer has met certain predetermined conditions. The system receives data representing a transaction and a customer identifier that identifies a customer that is associated with the transaction. The customer identifier may be in the form of an alphanumeric identifier stored on a frequent shopper card, a credit, debit or smart card account number, an EZ pass, a biometric, or a license plate number. The system determines a customer rating for the customer based on the transaction data or customer identifier. The customer rating may be based on the transaction price, products included in the transaction, or the time since the customer's last transaction at the business. The system then determines an updated discount based on the customer rating and the current discount. The updated discount may be greater or less than the customer's current discount depending on the customer rating. The system stores the updated discount in association with the customer identifier and communicates the updated discount to a POS terminal which applies the updated discount to the customer's current transaction. The system may also affect the discount increment, maximum discount allowed, length of the grace period, and transaction frequency requirement."

Problems solved by technology

Despite these efforts, however, customer loyalty is no longer inherent due to the intense competition.

These methods, however, erode the gross margin of the stores without retaining the stores' best customers.

Furthermore, weekly-advertised specials and coupons by their very nature only attract customers for a particular time period.

Since the specials or discounts typically vary from week to week, there is no guarantee or likelihood that a store will be discounting exactly what the customer is interested in buying every grocery trip.

Hence, the customer is not loyal to a single store or chain of stores.

While the frequent shopper program may succeed in attracting the customer to the store on an occasional basis, the program does not successfully ensure the loyalty of the customers.

Accordingly, a frequent shopper program does not provide any incentive (i.e. reward or penalty) for visiting the store on a consistent basis.

A further drawback of the prior art frequent shopper systems is their failure to identify and reward their most frequent and loyal customers over and above less frequent or loyal customers.

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