Digital Incentive System Using Central Database Authentication
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current systems for distributing and redeeming price reductions are labor-intensive, prone to fraud, and require paper coupons or expensive hardware, excluding a large market segment and increasing costs for retailers.
Innovation Solution
A digital incentive system using a central database connected to the internet for customer registration and point-of-sale terminal authentication, allowing digital redemption and reimbursement without additional hardware, with message brokers facilitating communication and encryption for security and fraud reduction.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If paper coupons are used for distributing price reductions, then customers can easily receive and present incentives, but the reimbursement process becomes labor-intensive and prone to fraud
Solution Approach 1:
The patent replaces the mechanical paper coupon system with a digital incentive system using electronic identifiers stored in a central database. Point-of-sale terminals communicate with the database to validate and redeem incentives electronically, eliminating physical paper handling and manual verification processes while maintaining ease of customer participation.
2Reliability
If manual validation of paper coupons is performed, then fraud can be detected, but the process is time-consuming and expensive
Solution Approach 1:
The system implements automated feedback loops where point-of-sale terminals instantly communicate with the central database to validate incentive identifiers. The database immediately responds with validation results, enabling real-time fraud detection without manual intervention. Transaction records are continuously updated and verified, providing ongoing feedback to prevent and detect fraudulent activities.
Solution Approach 2:
The centralized database automatically performs validation, authentication, and reimbursement processing without requiring manual human intervention. The system self-verifies incentive eligibility, checks for fraud patterns, and handles reimbursements electronically, reducing both time and labor costs while maintaining security and reliability.
3Reliability
If additional hardware connections are required for digital incentive systems, then security can be improved, but implementation costs increase and market accessibility decreases
Solution Approach 1:
The patent designs the system to work with existing point-of-sale terminals and common mobile devices that customers already possess. The central database serves multiple functions including incentive storage, validation, authentication, and reimbursement processing. The system leverages existing infrastructure and devices, avoiding the need for specialized hardware while maintaining security through cryptographic protocols and centralized control.
Data Source
AI summary
A system and method for issuance, redemption, and reimbursement of digital incentives. A central database connected to the internet: enables customers to register unique customer registration information; is able to store this information and assign unique identifiers to it; and is accessible to incentives providers to make available digital incentives. Existing point-of-sale terminals: are authenticated to have access to the central database; have payment devices; are connected to the internet; and are provided with a message broker that facilitates communication with the central database. The customer redeems digital incentives at one of the existing point-of-sale terminals at the time of purchase by first presenting their unique identifier. The message broker routes the unique identifier to the central database which authenticates and validates the existing point-of-sale terminal, the customer's unique identifier, and the payment device. The central database then returns validated applicable digital incentives to the message broker which forwards the validated digital incentives for redemption.