Loyalty Point Exchange Network for Cross-Program Redemption

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Solution Overview

Problem

Existing loyalty programs lack interoperability, resulting in scattered loyalty points that often expire unused, reducing consumer engagement and incurring high implementation costs for merchants to enable cross-program exchanges.

Innovation Solution

A system and method for exchanging loyalty points across multiple programs using a processing server that facilitates transactions between user and merchant devices, enabling peer-to-peer or decentralized exchanges through a blockchain-based loyalty network, allowing users to convert points between different merchants using smart contracts.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If merchants implement interoperability between loyalty programs using centralized platforms, then loyalty points can be exchanged across programs, but implementation cost increases significantly

Engineering Contradiction:

Improveinteroperability between loyalty programsVSAvoidimplementation cost

Core Design Contradiction:

Adaptability or versatilityVSEase of manufacture

Solution Approach 1:

The patent introduces a blockchain-based exchange platform as an intermediary that enables loyalty point transfers between different merchant programs without requiring direct integration between merchants. The exchange uses smart contracts to automate the conversion process, acting as a neutral mediator that reduces implementation complexity and cost while maintaining interoperability.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system creates digital representations (tokens) of loyalty points on the blockchain that replicate the value and functionality of original loyalty points. These tokenized copies can be transferred and exchanged across different programs without moving the actual loyalty point data, enabling interoperability through lightweight digital replicas rather than complex system integrations.

Inventive Principle:

Principle #26Copying

2Adaptability or versatility

If customers use multiple loyalty programs, then they can earn diverse rewards, but loyalty points become scattered and often expire unused

Engineering Contradiction:

Improveaccess to diverse loyalty rewardsVSAvoidunused expired loyalty points

Core Design Contradiction:

Adaptability or versatilityVSLoss of energy

Solution Approach 1:

The exchange platform consolidates scattered loyalty points from multiple programs into a unified pool that customers can access through a single interface. By merging the ability to hold and transfer points across different programs, the system allows customers to concentrate their redemption activities, reducing the likelihood of points expiring unused while maintaining access to diverse reward options.

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

The system enables dynamic allocation and transfer of loyalty points between different programs based on customer needs and expiration timelines. Customers can actively move points from programs where they are nearing expiration to programs where they can be used sooner, creating a flexible, adaptive approach to managing loyalty rewards that minimizes waste.

Inventive Principle:

Principle #15Dynamics

3Reliability

If loyalty points are restricted to single-merchant use, then merchant control is maintained, but customer engagement decreases due to limited flexibility

Engineering Contradiction:

Improvemerchant control over loyalty pointsVSAvoidcustomer engagement

Core Design Contradiction:

ReliabilityVSEase of operation

Solution Approach 1:

The system segments loyalty point management into two distinct layers: merchant-specific point issuance and redemption rules (maintaining merchant control) and cross-program transfer capabilities (enabling customer flexibility). This segmentation allows merchants to maintain authority over their own loyalty programs while customers gain the ability to transfer points across programs, resolving the conflict between control and flexibility.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The exchange platform provides universal functionality that works across multiple merchant programs while respecting individual merchant rules. A single transfer mechanism enables customers to move points between different programs, and the same system enforces merchant-specific redemption policies, creating a multi-functional solution that serves both merchant control and customer engagement needs.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS12608723B2Method and system of accessing data among a plurality of loyalty programs

Publication Date: 2026.04.21 MASTERCARD ASIAPACIFIC PTE LTD

AI summary

A method for exchanging loyalty points includes storing one or more user loyalty profiles including a user identifier and one or more merchant identifiers associated with a loyalty point total; receiving a transaction request from a computing system including at least a user identification, a merchant identification, and a transaction amount; identifying a user loyalty profile including a user identifier that matches the user identification; in response to identifying the user loyalty profile, determining the merchant identification matches one of the one or more merchant identifiers; determining the loyalty point total associated with the matching merchant identifier is lower than a loyalty point total required to cover the transaction amount; and exchanging a first amount of loyalty points associated with a different merchant identifier of the one or more merchant identifiers for a second amount of loyalty points associated with the merchant identifier that matched the merchant identification.