Flexible Merchant Reward Incentive System
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Solution Overview
Problem
Conventional credit card reward programs are limited as they require customers to make purchases only at pre-selected merchants to receive full benefits, failing to incentivize frequent shoppers at other preferred vendors, such as local or online retailers, and smaller merchants, leading to missed opportunities and lost benefits.
Innovation Solution
A system and method that allows customers to select their preferred merchants for rewards, providing different incentives for purchases made at both chosen and non-chosen merchants, enabling flexible reward structures that do not require exclusive use of pre-designated vendors.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If credit card issuers provide tiered incentive programs with pre-selected merchants, then customers can receive higher points or cash back at designated vendors, but customers are restricted to making purchases only at these pre-selected merchants to fully benefit from the incentives
Solution Approach 1:
The system dynamically adjusts the reward structure based on customer preferences. Customers can select their own preferred merchants, and the system adapts the incentive program to provide enhanced rewards at these dynamically chosen locations rather than static pre-selected merchants. This allows the reward program to evolve with changing customer shopping habits and preferences.
Solution Approach 2:
The invention changes the parameters of the incentive program from fixed merchant designations to flexible, customer-defined merchant selections. The reward rate parameter is adjusted based on the customer's chosen preferences, allowing higher rewards at selected merchants while maintaining program profitability through dynamic parameter management.
2Productivity
If credit card issuers establish relationships with specific merchants to offer incentives, then customers can receive benefits at these partnered vendors, but it becomes difficult to provide incentives to a wider array of merchants including smaller or online retailers
Solution Approach 1:
The system creates a universal incentive platform that can work with any merchant category, not just traditional brick-and-mortar partners. By allowing customers to select their own preferred merchants across diverse categories including online retailers and small businesses, the system achieves multi-functionality and broad merchant coverage without requiring exclusive partnerships with specific vendors.
Solution Approach 2:
The invention shifts the merchant selection process to customer self-service, where customers independently identify and select their preferred merchants rather than relying on the issuer's pre-established partnerships. This self-service approach enables the program to automatically adapt to any merchant category the customer chooses, dramatically expanding the range of eligible merchants without additional issuer involvement in merchant relationships.
3Productivity
If customers are required to make purchases at pre-selected merchants to receive maximum rewards, then the incentive program can be structured with specific partner benefits, but customers who prefer other merchants do not fully realize the benefits and may lose interest
Solution Approach 1:
The invention inverts the traditional incentive model by allowing customers to choose their preferred merchants first, rather than requiring customers to adapt to pre-selected merchants. The reward structure then adapts to these customer choices, providing enhanced rewards at the customer's selected locations. This inversion places customer convenience and preference at the center of the program design.
Solution Approach 2:
The system applies local quality by providing differentiated reward rates tailored to each customer's specific preferences. Rather than a uniform reward structure, the program offers customized incentive levels at each customer-selected merchant location, allowing high rewards at preferred vendors while maintaining program sustainability through varied reward structures across different merchants.
Data Source
AI summary
Systems and methods are disclosed for providing a financial account with incentives. In one implementation, a method is provided that includes receiving a selection of at least one identified merchant from a customer, the customer being associated with the financial account. The method also includes providing a first incentive to the financial account for one or more purchases made with the financial account at a merchant other than the identified merchant. Further, the method may include providing a second incentive to the financial account for one or more purchases made at the identified merchant with the financial account, wherein the first incentive is different than the second incentive.