Financial Institution Reward Program Automation
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Solution Overview
Problem
Financial institutions face challenges in operating effective reward programs due to limitations such as reliance on third-party vendors, costly equipment and software, inability to select merchants, and difficulties in managing and redeeming rewards, which hinder customer loyalty and service usage incentives.
Innovation Solution
A system and method for financial institutions to operate reward programs by enrolling customers, assigning reward credits based on purchase information, and applying them towards future purchases at qualifying merchants without pre-arranged agreements, allowing for flexible reward settings and tracking through existing POS technology.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If financial institutions contract with third-party vendors to administer reward programs, then the reward program can be operated, but the financial institution has little to no input in the rewards offered and merchants where rewards may be redeemed
Solution Approach 1:
The patent extracts the reward program administration function from third-party vendors and transfers it to the financial institution's own automated system. The financial institution directly manages reward issuance, tracking, and redemption without external intermediaries, thereby gaining full control over program configuration while eliminating vendor dependency
Solution Approach 2:
The financial institution operates its own reward program infrastructure, selecting merchants, configuring rewards, and managing customer accounts independently. The system automatically handles reward calculation, issuance, and redemption tracking without requiring third-party vendor intervention, enabling the institution to serve itself in administering the program
2Adaptability or versatility
If financial institutions operate reward programs in-house, then flexibility and control are improved, but costly equipment and software are required
Solution Approach 1:
The patent implements a multi-functional automated system that handles multiple reward program operations (reward calculation, issuance, tracking, and redemption management) through integrated software. This universal system consolidates what would otherwise require separate specialized equipment and software components, reducing overall capital investment while providing comprehensive in-house control
Solution Approach 2:
The patent replaces physical reward media (coupons, points cards, gift cards) with an automated electronic system that stores and manages reward information digitally. This substitution eliminates the need for costly physical card infrastructure, printing, and handling equipment while maintaining full program control through software-based reward management
3Ease of operation
If points or miles are used to reward customers, then the reward program can be implemented, but the incentive for customers to return is reduced compared to dollar-based discounts
Solution Approach 1:
The patent changes the reward parameter from abstract units (points, miles) to concrete monetary values (dollars). By issuing rewards in dollar amounts that can be applied as discounts or credits, the system makes the value immediately understandable and appreciable to customers, thereby strengthening the incentive to return while maintaining ease of program operation through automated electronic management
4Adaptability or versatility
If merchants use separate POS networks for reward programs, then each merchant can manage their program, but management becomes cumbersome across multiple merchants
Solution Approach 1:
The patent merges multiple merchant-specific reward programs into a single centralized automated system operated by the financial institution. The system consolidates reward issuance and tracking across all participating merchants, eliminating the need for separate POS infrastructure at each location while maintaining the ability to configure merchant-specific reward parameters through a unified management interface
Data Source
AI summary
A system and method of operating a rewards program through a financial institution for granting rewards to customers enrolled in the rewards program wherein the customer receives one or more reward credits in an account associated with the financial institution if the customer meets certain qualification criteria. The method may include determining if the account qualifies for an award credit; assigning a reward credit to the account; receiving purchase information regarding a purchase made at a merchant associated with the customer's account; identifying from the purchase information whether the purchase was made at a qualifying merchant; and applying the reward credit towards the purchase made by the customer at the qualifying merchant by applying a reward credit to the customer's account based upon the business rules applicable to the reward program. The method also determines if a reward credit has expired, in which event either the merchant or the financial institution may receive the benefit of any unused or expired reward credits depending on the particular embodiment of the reward program. The method also creates and provides notification to the customer of reward credit information.