NZ329815A - Computer-based method of operating a loyalty system for vendors and purchasers of goods and services - Google Patents

Abstract

A computer based method of operating a loyalty system for vendors and purchasers of goods or services comprises; a) creating a database of vendor and purchaser subscribers to the system; b) arranging contracts with financial organizations such as investment or insurance companies; c) receiving transaction data relating to electronic payments made by the purchasers to the vendors and d) periodically arranging payments to the financial organizations as required on behalf of the purchasers to satisfy the contract for benefits.

Description

NEW ZEALAND PATENTS ACT, 1953 No: 329815 Date: 20 February 1998 COMPLETE SPECIFICATION IMPROVEMENTS RELATING TO LOYALTY PROGRAMMES We, SECURENZ LIMITED, a New Zealand company, of 1063 Queen Street East, Levin, New Zealand, do hereby declare the invention for which we pray that a patent may be granted to us, and the method by which it is to be performed, to be particularly described in and by the following statement: INTELLECTUAL PROPERTY OFFICE OF N Z 1 4 MAY 1999 RECEIVED BACKGROUND OF THE INVENTION This invention relates to customer loyalty programmes, particularly but not solely programmes in which benefits are awarded to purchasers of goods or services based on payments made by way of electronic funds transfer systems. More particularly the invention relates to programmes in which benefits are provided as contributions to predetermined investment, insurance, community trust or like arrangements.

Existing loyalty programmes commonly provide benefits in the form of "points" which can be redeemed later by customers, towards purchase of further goods or services. Such programmes generally involve threshold point levels which must be reached, and assume that the customers will each be interested or able to make use of sufficient points in this way. In many cases the number of purchases and the length of time required before any benefit can be realised is impractical. Such programmes also generally require that customers carry membership cards such as swipe and smartcards, in order to identify themselves to vendors or activate the loyalty systems. The additional "plastic" which must be carried is inconvenient.

Electronic funds transfer (EFT) systems have been available for many years, including those related to EFTPOS, credit cards and other debit cards. Both vendors and their customers make arrangements with their banks to become system users. In general terms the vendors, particularly those in retail environments, maintain an electronic terminal at each point of sale. The participating customers swipe an EFT card through the terminal and enter a personal identification number (PIN), so authorising their bank to transfer funds between an account of theirs to one of a vendor account. The terminal then communicates the transaction amount and authorisation details to the bank over the telephone network. This information is generally processed by an intermediate organisation, such as Electronic Transaction Service Limited in New Zealand. Other EFT means such as smartcards are being developed and will operate to a similar effect.

SUMMARY OF THE INVENTION It is an object of the present invention to provide for loyalty programmes alternative to those which are currently available. The programmes are based on EFT events and implemented largely by computer. Customers receive loyalty benefits in convenient and significant forms. it. i " t-t' ■■ 1 i" w l '<• QffiCE 01 N.Z, 2 2 JUN 2001 RECEIVED Accordingly m one aspect the invention may broadly be said to consist in a method of operating a loyalty system for vendors and purchasers of goods or services, comprising: creating a database of vendor and purchaser subscribers to the system, arranging contracts with financial organisations for future benefits which will accrue to the purchasers under the system, receiving transaction data relating to electronic payments made by the purchasers to the vendors, and periodically arranging payments to the financial organisations as required on behalf of the purchasers to satisfy the contracts for future benefits. Preferably the method also involves calculating payment amounts for the purchasers according to the value of their respective transactions with the vendors, crediting the purchasers and correspondingly debiting the vendors according to the respective amounts.

Preferably the method further comprises accumulating purchaser credits in a common account before making each payment to the financial organisation. Preferably the method further comprises accumulating vendor debit amounts in respective debit records, and periodically debiting respective accounts held by the vendors according to the debit records. Preferably the method further comprises periodically contributing funds from accumulated purchaser credits to a community oriented organisation. Preferably the payments made by the purchasers to the vendors derive from EFTPOS, credit card or other electronic transactions. Preferably the financial organisation provides insurance services.

Loyalty systems of these kinds can be implemented by a largely independent management organisation, by a bank, or perhaps by one of the financial organisations which provide the benefits. The cost of activity in the various accounts which must be accessed is a significant factor for viability of the systems, as is the ability to recruit participating customers. In many cases a system operated by a bank on behalf of its existing customers will be the most economical. In other cases an information system operated by a management organisation coupled with a small number of collective customer accounts held separately at a bank will be more effective.

BRIEF DESCRIPTION OF THE DRAWINGS A preferred embodiment of the invention will be described with reference to the drawings, of which: Figure 1 schematically shows an existing EFTPOS communication system for '5? 4- 1 NTLLL:ctUAL P?:PC?JY OFFICE OF N.Z. 2 2 JUN 2001 RECEIVED managing electronic fund transactions, Figure 2 schematically shows a communication system for managing a loyalty programme according to the preferred embodiment, using transaction information from an EFT system such as shown in Figure 1, Figure 3 is a software diagram showing maintenance procedures for operation of the loyalty programme, Figure 4 is a flowchart outlining a procedure for updating vendor related information in the programme, Figure 5 is a flowchart outlining a procedure for updating information related to financial organisations, and Figure 6 is a flowchart outlining a procedure for updating customer related information.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT Referring to these drawings it will be appreciated that the invention is still in prototype form and may be available in a range of variations using computer database and information processing systems. Embodiments of the loyalty programme may be implemented in various ways without departing from the scope of the claims which are set out below. Details relating to EFT and computer communications, and also to financial services such as investment and insurance services have been omitted but will be well understood by a skilled reader.

Figure 1 gives a generalised view of the main parties to the EFTPOS system which operates in New Zealand. This view is given by way of example and other electronic funds transfer systems may be available or become available in future. A customer/purchaser 10 makes a purchase from a vendor 11 of goods or services, in this case specifically a retailer. The vendor provides an EFTPOS terminal which is used by the customer to arrange transfer of funds from a customer account to a retailer account. This process is activated by a swipe card of some kind and a PIN as mentioned above. Details of the transaction are collected by ETSL 12 and passed on to the retailer and customer banks 13. Transfer of funds between the appropriate customer and retailer bank accounts then takes place.

Figure 2 shows how a loyalty related system according to the invention may be set up m conjunction with the transfer system of Figure 1, once again by way of example. A sJQ. ^ ^ V 2 2 JUN 2001 RECEIVED loyalty programme manager 20 registers each vendor 21 and customer/purchaser 22 wishing to become part of the programme. Information concerning each party is entered on a computer database. The customer selects one or more financial benefit arrangements offered by the programme manager. These arrangements preferably take the form of contracts between the customer and various financial organisations 23 such as investment or insurance companies. Loyalty benefits accumulate to the customer as incremental payments towards deposits, premiums or other sums required by the financial organisations under the contracts. A long term savings account, health or education insurance plan, or superannuation plan may be set up for example. More detail on how the payments are calculated, transferred and reported to the customer are given below.

The programme manager 20, vendor 21, customer 22 and financial organisations 23 each operate one or more accounts at various banks 13. Just one such bank 25 has been shown m Figure 2 for clarity. This is the bank which holds at least one account on behalf of the manager 20, into which monetary amounts related to the numerous purchase transactions made by the customers are initially placed. These amounts are generally deducted from appropriate accounts held by retailers 21, as a proportion of the value of each purchase made by customers 22, although various methods may be used to calculate the amounts. Alternatively the amounts could also, for example, be taken as a portion of the individual transaction payments made to the retailers by the customers, before those transaction payments reach the retailer accounts. Further, from this account held by bank 25, payments are made to the various financial organisations as agreed in accord with the programme and with the policy requirements of the organisations. It is the responsibility of the programme manager to maintain account records and arrange transfers m a reliable and efficient manner.

The timing of transfers to and from the account held by bank 25 will depend on various economies which may be available m relation to fees charged by banks 13, particularly bank 25, and the financial organisations 23. In the preferred embodiment, the accounts of participating vendors 21 are debited weekly with the accumulated amounts owed in respect of all transactions made by participating customers 22. Daily or monthly debits would also be possible but are considered less efficient at this stage of development. This will depend to some extent on the number of participants and the particular banks where their accounts are held. The account held by bank 25 into which the vendor debits are transferred, is preferably debited monthly with payments to the participating organisations 23. Once again this will depend on various practical factors and could take place on a iNir'J LCi'! jJiu;tKlf OrrlCc Or In.Z. 2 2 JUN 2001 RECEIVED weekly or perhaps yearly basis if appropriate. In any case, the programme manager 20 will maintain records and issue reports to the participants at suitable intervals.

Information relating to the transactions made by customers is received by the programme manager 20 from ETSL 12 or an equivalent organisation. ETSL identifies those transactions made between participating customers and retailers using data supplied by the manager, and passes sufficient detail on to the manager to enable the various actions mentioned above. Information may be transferred on a daily, weekly or other preferably periodic basis. ETSL otherwise continues its usual function in electronic transfer of funds as mentioned in relation to Figure 1. The information is transferred between computers operated by ETSL and the manger by way of a telecommunications network, typically private leased telephone lines or parts of the public telephone network.

In one related embodiment, the programme manager 20 maintains a database in conjunction with a small number of collective accounts held at a bank. The collective accounts contain funds from some or all of the participating customers and are accessed at suitable intervals to minimise bank activity costs. For example, there may be separate health, education and retirement investment accounts containing funds for all customers interested in the particular form of financial benefit. In an alternative embodiment based more on Figure 1 than Figure 2, the loyalty system is implemented largely by one or more of the banks 13. Such a bank uses the information received from ETSL itself directly to debit and credit appropriate accounts. The banks own customers would be offered loyalty programme memberships based on their existing account structures and personal information on the banks' records.

Figure 3 indicates day to day activities of the programme manager 20 in Figure 2 via a database 30. These include entry of new customers 31, entry of new vendors/merchants and respective rebate rates for loyalty transactions 32, entry of new financial organisations and respective payment requirements under customer contracts 33, and receipt of transaction data 34. Various verification and reporting procedures are used, including reports for purchasers 35, for vendors 36, for financial organisations 37, and for ETSL 38. Special entry and report facilities may also be provided in relation to particular financial organisations such as a community trust. These activities are set out by way of example only, and other more detailed components of the overall system may be included.

Figure 4 is a software routine which may be implemented by the programme manager 20 lis i L.Lb.1-^ i \_>/-\L. Pi\Wi H\l Y.

OFFICE OF N.Z. 2 2 JUN 2001 RECEIVED on a computer system including database 30 in Figure 3. This routine processes data items 41 received from ETSL relating to each customer transaction for which a loyalty benefit is due. The routine first checks 42 whether the particular vendor is a participant in the programme. If so, a rebate is calculated 43 for the customer based on the value of the transaction and perhaps other factors. Vendor records on the database 30 are then updated 44 by way of a debit, and customer records are updated 45 by way of a credit. If the programme involves a community trust then an appropriate credit is also calculated and recorded 46. This routine may take place on a weekly basis as required, and at the end of each week statements and reports are generated, archived and despatched 47 to the vendors m an appropriate form. Transfers of funds into the account held by bank 25 generally take place on despatch of the statements.

Figure 5 is a software routine which processes payments made to the financial organisations 23 in Figure 2 as required to provide loyalty benefits according to the invention. The customer records 51 are reviewed consecutively to determine how much is due to each organisation. If funds are due for transfer 52 then records on database 30 are updated 53 by way of credit to the particular organisations, and updated 54 by way of debit to the particular customer. This routine preferably takes place on a monthly basis as required, and the end of each month the total sum due to each financial organisation is calculated, summarised and remittance advice despatched 55 to the organisations in an appropriate form. Transfers of funds out of the account held by bank 25 take place on despatch of the advice.

Figure 6 is a software routine which produces reports for the registered customers, preferably on a quarterly basis according to the date of registration. The customer records 61 are processed consecutively and for those on which a report is due 62, a statement or the like is printed 63 and despatched. Various other self explanatory record keeping actions take place and a summary is printed 64 for the programme manager.

Claims (8)

V... INTELLECTUAL PROPERTY OFFICE OF N.Z. WHAT WE CLAIM TS: -8- 2 2 JUN 2001 RECEIVED

1. A computer based method of operating a loyalty system for vendors and purchasers of goods or services, comprising: creating a database of vendor and purchaser subscribers to the system, arranging contracts with financial organisations for benefits which will accrue to the purchasers under the system, receiving transaction data relating to electronic payments made by the purchasers to the vendors, and periodically arranging payments to the financial organisations as required on behalf of the purchasers to satisfy the contracts for benefits.

2. A method according to claim 1 further comprising: calculating benefit payment amounts for the purchasers according to the value of their respective transactions with the vendors, and crediting the purchasers and correspondingly debiting the vendors according to the respective amounts.

3. A method according to claim 1 further comprising: accumulating purchaser credits m a common account before making each payment to the financial organisations.

4. A method according to claim 1 further comprising: accumulating vendor debit amounts in respective debit records and periodically debiting respective accounts held by the vendors.

5. A method according to claim 1 further comprising: periodically contributing funds from accumulated purchaser credits to a community oriented organisation.

6. A method according to claim 1 wherein: payments made by the purchasers to the vendors derive from EFTPOS, credit card or other electronic transactions.

7. A method according to claim 1 wherein: the financial organisation provides insurance services. r~>k ^ (4; INTELLECTUAL PROPERTY OFFICE OF N.Z. 2 2 JUN 2001 RECEIVED

8. A method of operating a loyalty programme substantially as herein described with respect to the accompanying drawings.