Reward System for Price Differential Compensation
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Solution Overview
Problem
Consumers face inefficiencies in finding the best prices for products across different merchants within a geographic region, as comparing prices can be time-consuming and often outweighs any potential cost savings.
Innovation Solution
A computer-implemented method and system that determines price differentials for products across merchants within a predetermined geographic area and applies rewards to cardholder accounts based on these differentials, allowing cardholders to effectively receive lower prices without needing to purchase from the merchant offering the lowest price.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If consumers manually compare prices across multiple merchants to find the best price, then they may achieve cost savings, but the time and effort required outweigh the savings
Solution Approach 1:
The patent introduces a payment processing system as an intermediary that automatically compares prices across merchants and provides rewards to consumers. This intermediary handles the complex price comparison task, freeing consumers from manual comparison while ensuring accurate price differential calculation and reward distribution.
Solution Approach 2:
The system performs preliminary price comparisons and stores price data for multiple merchants before the actual purchase transaction. When a consumer makes a purchase, the system has already pre-calculated price differentials and can immediately determine and apply rewards, eliminating the need for real-time manual comparison.
2Reliability
If consumers purchase from merchants with lower prices, then they save money, but they must identify and travel to those specific merchants
Solution Approach 1:
The patent converts the harm of paying a higher price at a convenient merchant into a benefit by providing a reward equal to the price differential. Consumers can purchase from nearby merchants without worrying about price differences, as the system compensates them for the extra amount paid, making the convenient purchase option equally beneficial.
Solution Approach 2:
The payment processing system acts as an intermediary that bridges the gap between consumers and merchants by automatically calculating price differentials and issuing rewards. This intermediary enables consumers to maintain their preferred purchasing habits while still achieving cost savings through automated reward distribution.
3Loss of information
If the system monitors and compares prices across multiple merchants in real-time, then price transparency is improved, but system complexity increases
Solution Approach 1:
The patent leverages the existing payment processing system to perform multiple functions: processing payments, storing transaction data, and comparing prices. By making the payment system universal and multi-functional, the patent avoids building a separate complex price monitoring infrastructure, thereby reducing overall system complexity while maintaining price transparency.
Solution Approach 2:
The system uses its own existing infrastructure (payment processing networks, transaction databases, and computing resources) to perform price comparison and reward calculation. This self-service approach eliminates the need for external price monitoring services, reducing system complexity while ensuring accurate and timely price information.
Data Source
AI summary
A computer-implemented method for providing a reward based on a price differential for a product is described. The method is implemented using a computing device in communication with one or more memory devices. The method includes receiving, by the computing device, a reward determination request message including an identification of a first merchant and product data for a product purchased by a cardholder from the first merchant. The method also includes determining a location of the first merchant, determining, using the one or more memory devices, the price differential between a first price for the product from the first merchant and at least a second price for the product from at least a second merchant within a predetermined geographic distance of the first merchant, and applying a reward to a cardholder account associated with the cardholder, wherein the reward is based on the price differential.