Closed Loop Card Conversion System for Unredeemed Value Recovery

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Solution Overview

Problem

Closed loop gift cards and codes often go unredeemed due to geographic limitations and restrictions, resulting in wasted funds that can escheat to the state, with consumers losing the full value of their purchases.

Innovation Solution

A system and method for processing closed loop cards/codes that allows owners to convert their value into open loop cards/codes, enabling resale or redemption at other retailers, with features like generating new cards, dividing funds into smaller denominations, and providing payment to owners based on resale offers, while ensuring secure transactions and fraud prevention.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If closed loop gift cards are used to maintain merchant-specific value, then the merchant can control spending and fees, but the recipient cannot redeem the card due to geographic limitations or personal disinterest

Engineering Contradiction:

ImproveredeemabilityVSAvoidwaste of funds

Core Design Contradiction:

Adaptability or versatilityVSObject-generated harmful factors

Solution Approach 1:

The patent introduces an intermediary platform that acts as a mediator between closed loop gift card holders and open loop gift card merchants. This platform enables the conversion of closed loop cards to open loop cards, allowing recipients to redeem value at any merchant while the system handles the transaction conversion in the background

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system changes the parameter of gift card circulation from closed loop (merchant-specific) to open loop (universal) through an automated conversion process. This parameter change allows the same value to be redeemed at any merchant, eliminating geographic and merchant restrictions

Inventive Principle:

Principle #35Parameter changes

2Reliability

If closed loop gift cards are issued with restrictions and expiration dates, then the merchant can control usage and reduce fraud, but consumers waste unredeemed funds

Engineering Contradiction:

Improvefraud preventionVSAvoidunredeemed value

Core Design Contradiction:

ReliabilityVSLoss of energy

Solution Approach 1:

The patent implements dynamic expiration date management where the system automatically extends or resets expiration dates when cards are converted to open loop status. This dynamic adjustment ensures that redeemed cards don't expire during the conversion process, maximizing value utilization while maintaining security through controlled access

Inventive Principle:

Principle #15Dynamics

3Adaptability or versatility

If the system converts closed loop cards to open loop cards, then consumers can redeem at any merchant, but the system must verify card validity and amounts securely

Engineering Contradiction:

Improvemerchant acceptanceVSAvoidverification process

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The patent replaces manual verification processes with automated electronic verification systems that communicate with card issuer databases. This substitution of mechanical verification with electronic automation reduces complexity while maintaining security, allowing rapid validation of card authenticity and balance

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

4Productivity

If the system processes large numbers of gift card conversions, then more consumers benefit, but transaction processing time and costs increase

Engineering Contradiction:

Improveconversion volumeVSAvoidprocessing time

Core Design Contradiction:

ProductivityVSLoss of time

Solution Approach 1:

The patent implements preliminary verification where the system checks card validity, balance, and eligibility for conversion before initiating the actual conversion process. This preliminary action prevents failed conversions and reduces reprocessing needs, improving overall throughput and reducing total processing time

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS8152060B2System and method for processing closed loop cards and codes

Publication Date: 2012.04.10 GIFTCODES COM LLC

AI summary

Disclosed herein are systems, methods, and computer-readable storage media for processing closed loop cards/codes. The method includes identifying a closed loop card/code having associated money in an account, receiving a confirmation of an amount of money in the closed loop card/code account, presenting an owner of the closed loop card/code with the amount of money in the closed loop card/code account and an offer to pay an offer amount for the closed loop card/code, receiving an indication that the owner accepts the offer, receiving the amount of money from the closed loop card/code account, and paying the owner the offer amount. Payment can be on an open loop card/code, cash, automated clearing house (ACH) to bank, check, merchant credit, or bill pay. The method can include generating a new closed loop card/code associated with the amount of money. The new closed loop card/code can be sold to another user.