Card Processor Rebate System for Loyalty Leakage
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Solution Overview
Problem
Traditional loyalty programs suffer from leakage, where merchants do not fully report sales resulting from promotions, leading to lost revenues for loyalty program providers, and the administration of coupon redemption is costly and requires significant training.
Innovation Solution
A system and method that uses transaction cards to provide customers with loyalty incentives by recording charges, determining rebate credits based on purchases from participating merchants, and crediting accounts directly, eliminating the need for coupon redemption and associated administrative costs.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional coupon-based loyalty programs are used, then customers can receive discounts, but leakage occurs when merchants do not fully report sales resulting from promotions
Solution Approach 1:
The patent introduces a card processor as an intermediary between the merchant and the loyalty program provider. The card processor receives transaction data directly from the merchant's point of sale system and automatically reports sales data to the loyalty program provider, eliminating the need for manual merchant reporting and ensuring accurate tracking of promotion-related sales.
Solution Approach 2:
The system implements automated feedback loops where transaction data is continuously collected from the merchant, processed to identify promotion-related sales, and reported back to the loyalty program provider in real-time. This feedback mechanism ensures accurate tracking and prevents revenue leakage by automatically reconciling reported sales with actual transactions.
2Ease of operation
If traditional coupon redemption administration is implemented, then discounts can be redeemed, but it is costly and requires significant training
Solution Approach 1:
The system enables self-service operation where the point of sale system automatically applies discounts based on digital coupons stored in the customer's account. The system autonomously validates coupon eligibility, calculates discounts, and processes transactions without requiring manual administrative intervention, thereby eliminating training requirements and reducing operational complexity.
Solution Approach 2:
The patent replaces the manual mechanical process of coupon redemption with an automated electronic system. Digital coupons are stored and validated electronically, and discounts are applied automatically through software integration with the point of sale system, eliminating the need for manual coupon handling, verification, and processing.
3Adaptability or versatility
If manual coupon processing is used, then discounts can be provided, but administrative costs are high
Solution Approach 1:
The system creates a multi-functional platform that handles multiple operations through a single integrated system: digital coupon distribution, transaction validation, automatic discount calculation, sales tracking, and reporting. This universal system eliminates the need for separate administrative processes for each function, thereby reducing administrative overhead while maintaining full discount provision capability.
Data Source
AI summary
A system and method provide rewards or loyalty incentives to card member customers. The system includes an enrolled card member customer database, an enrolled merchant database, a participating merchant offer database and a registered card processor. The registered card processor receives a record for charge for a purchase made with an enrolled merchant by an enrolled card member customer and uses the record of charge to determine whether the purchase qualifies for a rebate credit in accordance with a discount offer from the enrolled merchant. If the purchase qualifies for a rebate credit, the registered card processor provides the rebate credit to an account of the enrolled card member customer. The system provides a coupon-less way for merchants to provide incentive discounts to enrolled customers.