Electronic Gift Card Refund Processing for Invalid Payment Instruments
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Solution Overview
Problem
Retailers face challenges in processing refunds when the original payment instrument is invalid, requiring additional steps and physical gift cards, which are inconvenient for customers and increase labor and material costs.
Innovation Solution
A system and method that automatically detect invalid payment instruments and apply refunds to existing or newly created electronic gift cards associated with a mobile payment account, eliminating the need for physical gift cards.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a physical gift card is used to process refunds when the original payment instrument is invalid, then the refund can be applied, but additional steps are required at the POS to activate and load the physical gift card, increasing labor and material costs
Solution Approach 1:
The patent creates an electronic copy of the gift card functionality in mobile devices. Instead of using physical gift cards, the system generates electronic gift cards that are stored and managed digitally in the customer's mobile device, eliminating the need for physical card activation and loading at the POS.
Solution Approach 2:
The patent replaces the mechanical system of physical gift cards with an electronic/digital system. The electronic gift card system uses software-based storage and transaction processing, eliminating the physical activation and loading steps that were required with traditional gift cards.
2Reliability
If a physical gift card is issued for refunds, then the customer receives the refund amount, but the customer must remember to bring the physical gift card for future purchases, reducing convenience
Solution Approach 1:
The patent creates an electronic copy of the gift card functionality in mobile devices. The electronic gift card is stored in the customer's mobile device and can be accessed anywhere, eliminating the need to physically carry and remember to bring a physical gift card for future purchases.
Solution Approach 2:
The electronic gift card system integrates multiple functions into a single mobile device platform. The same mobile device that stores the electronic gift card can also be used for making purchases, checking balances, and managing account information, providing universal access without requiring separate physical cards.
3Reliability
If physical gift cards are used for refunds, then refunds can be processed, but material costs and labor costs increase
Solution Approach 1:
The patent creates an electronic copy of the gift card functionality, eliminating the need for physical card production, distribution, and management. This digital replication removes material costs associated with physical cards and reduces labor costs for activation and loading operations.
Solution Approach 2:
The patent transitions from expensive physical gift cards to inexpensive electronic representations. The electronic gift card has negligible material cost compared to physical cards, and can be instantly created and transferred without the overhead of physical production and distribution chains.
4Reliability
If the original payment instrument is invalid at refund time, then the refund cannot be applied to the original instrument, but alternative arrangements require additional manual intervention
Solution Approach 1:
The patent implements a self-service system where the customer's mobile device automatically receives and manages the electronic gift card when the original payment instrument is invalid. The system automatically detects the invalidity, creates the electronic gift card, and loads the refund amount without requiring manual POS intervention for card activation and loading.
Solution Approach 2:
The patent replaces manual POS intervention with automated electronic processes. The system uses digital communication to automatically create and transfer electronic gift cards, eliminating the manual steps of physical card activation, loading, and distribution that were required when original payment instruments became invalid.
Data Source
AI summary
A refund processing system and method for automatically processing refunds to a mobile payment account of a customer is provided. The method includes the steps of receiving sales transaction information from a transaction records database, in response to a request from a point of sale device when a refund for an item is initiated, transmitting the sales transaction information to calculate an amount of funds to be refunded to a payment instrument, detecting that the payment instrument is not valid while attempting to apply the refund, and determining whether an electronic gift card is currently associated with the mobile payment account of the customer, and if so, applying the refund to the electronic gift card, and if not, creating a new electronic gift card and applying the amount of funds to the new electronic gift card.