WO2000041109A2 - System and method for negative retroactive discounts - Google Patents

Abstract

A system and method is disclosed in which customers are provided with an instant discount subject to an obligation to make further purchases or otherwise act in a specified way. The customer must assent to the obligation implicitly or explicitly. However, failure of the customer to later abide by his or her obligation will result in a penalty, including a retroactive charge on the customer's account to lessen or eliminate the discount that that customer previously received. In addition, the customer may incur further charges. Thus, instead of giving away a benefit hoping that store or brand loyalty will be fostered with that customer, a retailer or other seller can, with the present invention, recoup the cost of the benefit if the customer reneges on his or her obligation. Included in the disclosure is a discount offer process wherein discounts and included obligations are offered or targeted to customers, and an obligation fulfillment check process in which compliance with obligations is monitored. Also disclosed is a terminal configured to perform the same.

Description

SYSTEM AND METHOD FOR NEGATIVE RETROACTIVE DISCOUNTS

FIELD OF THE INVENTION

The present invention relates to electronic systems and methods for providing

customers with discounts and, more specifically, to such systems and methods in which the

discount includes an obligation agreed to by the customer to make a further purchase at a later time.

BACKGROUND OF THE INVENTION

Retailers have long been concerned with fostering and maintaining customer loyalty to encourage the customers to shop more frequently, or even exclusively, at their stores.

As new technologies evolve, such as the Internet, the issue of customer loyalty remains the

same. To attract customers to their stores, retailers have offered discounts, provided coupons, and created "membership" clubs, each of which are intended to provide customers with an

incentive to shop at their particular store (or Internet site). While such techniques have

motivated customers to go to stores and shop, competing retailers also use such techniques to

entice customers and, accordingly, the retailer is not ensured that the customer will return.

Rather, the merchant is obliged to continuously advertise specials, offer discounts, and

otherwise expend monies on advertising to maintain or increase its customer base.

A similar situation exists with regard to maintaining a customer's loyalty to a

particular brand of product. Although considerable sums are spent annually to advertise and

promote particular brands through all sorts of media including radio, television, print

advertisements, and advertising on the Internet, these efforts to not ensure that a customer will remain loyal to that brand. For example, a competing brand may provide a discount at a local

retailers or target coupons to specific customers to buy that brand instead.

Retailers and sources of products and services alike have offered various

incentives, discounts, or premiums to customers to lure them to their store, product or service,

only to have that customer turn away at a later time, for example, when another store, product

or service entices the customer with an attractive offer. In the telephone long-distance carrier

market, for example, customers are offered cash or frequent-flyer miles if they switch from one

carrier to another, but the customer's loyalty to that service will last only so long as it takes for

another carrier to make an attractive offer to that customer.

Essentially, the problem that a discounting merchant or source faces when rewarding a customer at the time of a purchase is that there is no system or method in place to

safeguard that the customer will return to that merchant, product or service. Accordingly, what

is needed in the art and which has heretofore not been available, is a system and method which provides an instant discount to a customer and ensures that the customer makes a further

purchase in accordance with the specified terms or conditions. What is further needed and has

heretofore not been available is such a system which better ensures that a customer returns to a

particular store. Also needed in the art would be such a system which encourages the customer

to make their purchases of a specific brand, or drive the customer to a specific, predetermined

competing brand for a fixed period of time. The present invention satisfies these and other needs. SUMMARY OF THE INVENTION

According to one aspect of the present invention, a method determines whether

a customer has fulfilled obligations associated with a discount that has been provided at the

time of a first purchase. The obligation associated with the discount can take many forms, but

generally includes an obligation that the customer make a further purchase, for example, at a

later time. In this manner, the customer can accept a benefit at the time of the first purchase (in

the form of a discount or premium) but will be obliged to make a further purchase in

accordance with terms tied to that benefit. Thus, rather than giving away a benefit to the

customer in the hopes that store or brand loyalty has been fostered, the retailer can regain the

cost of the benefit, and may even penalize a customer, if the customer fails to comply with any

agreed-upon terms of the obligation.

The invention may be realized in many forms, depending upon the particular

application into which it is placed, and features, steps and advantages associated with one aspect of the invention can be applied and used in connection with another aspect of the

invention with equal advantage and utility, as one of skill in the art would appreciate.

The method according to this first aspect of the invention includes the steps of

providing the customer with a discount which includes an obligation, and associating the

customer and the obligation together in the form of digital data. These steps may occur at the

time of the first purchase. The customer having agreed to the terms of the obligation included

with the discount, the method includes the further steps of reviewing the digital data to identify

whether there are any failed obligations associated with that customer (or other customers), and

charging an account of the customer for each such failed obligation. Preferably, the reviewing

and charging steps proceed without user intervention. In preferred forms, the foregoing method tracks each of the items purchased by

the customer and makes such data available for use, for example, in targeting further discounts

or premiums to offer the customer at the time of purchase or at a later time. Such further

discounts can be offered to the customer the next time he or she visits/accesses the store where

the purchases were made, or can be communicated to the customer as a targeted offer, such as

by regular or electronic mail.

As noted above, the discount provided to the customer at the time of the first

purchase includes an obligation to make a further purchase, preferably at a later time. In this

way, customer loyalty is better ensured. The obligation may require the customer to purchase a specific item, of a particular brand, within a preset time period. In this form, the obligation

included with the discount can fosters loyalty to the brand that the customer is obliged to buy. Alternatively or in addition, the obligation may require the customer to purchase an item at the

same store within a preset time period, whereby the obligation fosters store loyalty. Similarly,

the obligation may require the customer to purchase an item at a predetermined but different

store within a preset time period, whereby the obligation promotes a desired consumer behavior.

As part of the review process of the method according to this aspect of the

invention, obligations which have been provided to customers are examined to determine

whether their terms have been fulfilled, for example, within a preset time period. By tracking

the purchases of each customer, not only can further discounts or premiums be targeted to the

customer, but compliance with any outstanding obligations can readily be discerned. The

review and tracking are performed by reading and manipulating digital data that is gathered

when the customer makes a purchase using, for example, a credit card, debit card, membership card, frequent shopper card, or other form of customer identification. In the event that the

customer has failed to comply or fulfill an obligation, an account associated with the customer

can be charged the full amount or value of the discount/premium provided at the time of the

first purchase, as well as any further charges or interest that may have been agreed to in

consideration of initially receiving the discount. Such further charges can be agreed to or be

part of a program initiated by a credit or debit card issuer or included in a

membership/frequent-shopper program to which the customer belongs.

These and other features, elements, steps and avantages of the invention can be

better appreciated from the following detailed description and the accompanying drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

Figs. 1 A and IB are block diagrams of hardware arrangements that may be used to

implement the system and method of the invention;

Fig. 2 shows a configuration of a terminal such as a point of sale terminal in accordance with a preferred embodiment of the invention, wherein data is arranged in a series of tables for

processing purchase transaction data;

Fig. 3 depicts an in-store POS terminal that may be used in the system and method of

the present invention;

Fig. 4 illustrates a process flow relating to the offer of a discount to a customer during a

purchase transaction;

Fig. 5 shows an inventory table that may be maintained in the terminal of Fig. 2 or

elsewhere, the inventory table including sample entries relating individual items for purchase

with an item code, a price, and a cost; Fig. 6 shows a customer profile that may be maintained in the terminal of Fig. 2 or

elsewhere, the customer profile including a sample customer profile entry;

Fig. 7 shows a conditions table that maybe maintained in the terminal of Fig. 2 or

elsewhere, the conditions table including sample entries, each of which relates a discount code

to a triggering event, such as the purchase of a specific item (e.g., an item listed in the sample

records of Figs. 10A or 10B) or locating a customer having a particular profile (e.g., as defined

in the customer profile of Fig. 6);

Fig. 8 shows a discount table that maybe maintained in the terminal of Fig. 2 or

elsewhere, the discount table including sample entries, each of which relates the discount code

to a condition, an obligation, and a penalty which have been established for a given time

period;

Fig. 9 shows an obligations table that may be maintained in the terminal of Fig. 2 or

elsewhere, each sample entry in the obligations table correlates an obligation code to an

obligation and the penalty for non-compliance;

Figs. 10A and 10B are sample records of individual customer purchase transactions,

detailing the purchases by the customer and other transaction-specific information;

Fig. 11 is an issued discounts table that may be maintained in the terminal of Fig. 2 or

elsewhere, the sample entries in the issued discounts table reflect which discounts were issued

to whom, when such discounts were issued and the status of the obligation that was included

with the discount.

Fig. 12 shows a transaction table that may be maintained in the terminal of Fig. 2 or

elsewhere, the transaction table including sample entries relating individual customer purchase

transactions with the date of such transactions, the customer's identity, and information concerning any discounts that may have been offered and whether such discounts have been

accepted;

Fig. 13A illustrates a process flow relating to a check process which determines, for any

discounts that have been issued, whether current purchases satisfy the obligations included with

such discounts;

Fig. 13B illustrates a process flow which may be used in conjunction with the check

process of Fig. 13A to create certain entries in the issued discounts table of Fig.11 ;

Fig. 14 illustrates a process flow relating to an obligation check process which imposes

a penalty on customers who have not fulfilled their obligations by a specified due date; and Fig. 15 illustrates a process flow relating to a potential-discount offer process which

identifies discounts not yet offered which may be accepted by a customer.

DETAILED DESCRIPTION OF THE INVENTION

By way of overview and introduction, the present invention defines a system and

method in which customers are provided with an instant discount subject to specified terms and

conditions which relate to future actions by the customer. For example, a condition may be that

the customer purchase the same item for which the discount was given from the same store one

or more times within a stated time period or else be penalized by having the discount

retroactively taken away, that is to say, by charging an account of the customer in a specified

amount. Conceptually, in the present invention the customer receives a price reduction on an

item he or she has already selected for purchase. The merchant, in this scenario, has created an

incentive for the customer to return to the store, which may result in many further purchases by

the customer without the expense of advertising or other discount programs to attract that customer. Further, the merchant of the discounted product has an expectancy that the customer

will satisfy his or her obligation to repeat the purchase, which provides the merchant with

useful information to guide the manufacture, distribution and stocking of such items. Of

course, because the customer's identity is known, an important consequence is that data is

gathered concerning the customer's purchases, purchase habits, the particular discounts that the

customer is willing to accept, and the nature of the conditions that have been accepted. One

customer's reaction to a discount/obligation offer can be used to tailor similar or identical

offers to other customers who have similar entries in their respective profiles.

In accordance with another aspect of the present invention, a method is provided

for enticing a customer to make a further purchase, for example, to promote store or brand

loyalty. In the method according to this aspect of the invention, the customer and an account of the customer are identified at the time of purchase or earlier, for example, when the customer

connects to the Internet or accesses a particular site on the Internet. (The customer and his or

her account may be identified at discrete points in time.) At the time of purchase, a list of items selected for purchase by the customer are provided in a memory, which may be included in a

cash register, computer server, or other electronic device. The selected items have a

predetermined total price which would ordinarily be charged to the customer. However, the

inventive method includes the steps of selecting a discount or premium to offer the customer in

accordance with a preselected criterion and permitting the customer to accept the offer. As

described above, the discount or premium includes an obligation to make the further purchase

at a later time. Upon accepting the discount/premium and its respective obligation, the

obligation is associated with the customer as digital data and the customer is charged an

amount which differs from the predetermined total price, for example, the customer is charged less than the predetermined total price. As can be appreciated, the customer obtains an

immediate benefit in the form of a discount or premium. Further, the discount is tied to further

obligations that the customer must fulfill in order to retain the discount and not be assessed any

charges. As a result, the negative retroactive discount according to this aspect of the invention

promotes future customer behavior in accordance with the terms of the obligation, and, hence,

in a prescribed manner.

The specific discount that is offered to a customer in accordance with this aspect

of the invention is based upon one or more preselected criteria which may vary depending upon

the particular industrial application of the invention. The discount can be selected in

accordance with a profile maintained on that customer, or may be selected at random from a

group of discounts that are available to offer a customer. The discount can be selected with respect to the item among the items being purchased which has the largest profit. Likewise, the

discount can be selected from a list of discounts available for the items that have been selected for purchase by the customer, or a test can be performed to determine whether a specific item

was or was not purchased, with the discount being tied to that item. Similarly, more than one

discount may be offered to the customer, and the customer in turn selects the discount he finds

most desirable.

Particular discounts to offer a customer may be available for limited periods of

time, in limited geographic areas, to persons of specific demographic profiles, or to persons

who have made or not made particular purchases, including persons who have satisfied an

established spending threshold or frequency of store visits within a period of time. The

discounts may also be multi-tiered, wherein specific customers may be rewarded with greater or different discounts as a function of their degree of patronage with a particular store, for

example.

The obligation associated with the discount that is offered to the customer is

established so as to achieve a marketing goal of the merchant (retailer or service provider) or of

a particular source (brand of goods or services). Thus, the obligation may require the customer

to repeat the purchase of one of the items that was selected for purchase, purchase a similar

item of a competing brand, purchase an unrelated item that is being co-marketed by the

merchant or the source of an item, and/or may require the customer to shop again at the same

store or some other specified store. The obligation may require repeated purchases or store visits over time.

As in the method according to the first aspect of the invention, the entice-

method according to the second aspect of the invention may include a charge or assessment to the customer if the obligation associated with a discount provided to a given customer is not

fulfilled by the customer in accordance with its terms. Also, the entice method may include the

further steps of monitoring further purchases by the customer to determine whether purchases

made subsequent to the customer's having accepted a discount, with its associated obligation,

satisfy that obligation. In the event that a further purchase satisfies an outstanding obligation,

the method could include the further step of automatically updating digital data associated with

the customer to reflect the fact that the obligation has been satisfied. Alternatively, the

customer may have to indicate that a purchase is being made in satisfaction of an obligation to

obtain recognition for that purchase as satisfying the obligation.

When a discount is provided to a customer, the vendor (merchant, store or

Internet site) collects less than they would have otherwise collected for the goods or services selected for purchase. Part or all of this discrepancy can be collected from a third-party who is

the beneficiary of the obligation associated with the discount. The third-party may be the

source of the item that the customer is obliged to purchase by assenting to the obligation. The

third-party may be another store, for example, a store located in the same mall where the

customer accepted the discount and assented to the obligation to make a further purchase. In

addition, the store providing the discount to the customer may obtain an incentive from a third-

party to offer the discount to the customer in the first place. The incentive may be in the form

of a discount on items purchased, a rebate, a credit, a cross-promotion with another store or a

particular product, an accommodation on the terms of payment to the third party, and the like.

The electronic data concerning the customers, their selections of items for

purchase, their acceptance or rejection of discounts and their included obligations can be provided to multiple vendors and/or sources for demographic analysis, targeted discount

offerings, and co-marketing strategies.

In lieu of a discount, a "premium" in the form of a product or service can be

provided at no charge to the customer, or at a reduced charge, in exchange for assenting to the

obligation. As used herein, a "premium" refers to any good or service that may be provided to

the customer, at a reduced price or at no charge, with an associated obligation to make a further

purchase, in accordance with the invention. The product provided may be an item selected for

purchase, or an item that was not among the goods or services selected for purchase.

In accordance with a further aspect of the present invention, a terminal, which

includes an electronic memory and a processor, is connected to a data store and configured to

select a discount for offering to an identified customer who has selected one or more items for

purchase. The terminal receives signals which identify the customer, at least one charge account associated with the customer, and the item(s) selected for purchase by the customer.

The discount that is selected is selected from the data store, and is selected using a preselected

criterion. As described above, the discount includes an obligation with which the customer

must comply at a later time, in accordance with a broad aspect of the invention. The

obligation may be to make a further purchase or to shop at another location, including another

web site. The terminal is further configured to obtain a signal which signifies the customer's

acceptance of the discount and the obligation included therewith. In response to the

customer's acceptance of the discount and obligation, the acceptance of the obligation by the

customer is stored in the data store and the customer is charged an amount which differs from

(e.g. is less than) a predetermined total price for the items that have been selected.

In a preferred form, the terminal is either a point-of-sale (POS) terminal such as an electronic cash register or a computer server. The signals received and obtained by the

terminal may be local, as from an input device connected to a POS terminal in a retail store, or

remote, as from a personal computer attached to a computer server by a communication link.

The item(s) selected for purchase by the customer can be provided to the terminal from a server

operated by a third-party. Likewise, the item(s) selected for purchase can be provided to a

computer server operated by a third-party.

The invention is first described in detail with respect to certain hardware and

software that can be used to implement the system and method of the invention within a

supermarket. Thereafter, a number of examples are provided in different settings to better

explain the invention in other areas of applicability. However, the examples stated herein are

selected examples and are not restrictive of the many possible other applications which are not expressly described, but which are nevertheless embraced by the elements recited in the claims

that follow the detailed description, and their equivalents.

In this specification, the term "item" refers to a product, subscription, or service.

Also, as used herein, the "source" of an item refers to a manufacturer or provider of the item.

Further, one "brand" of product such as Coca Cola®, for example, may be provided by a

source that is different from another brand of product, for example, Pepsi®.

Also, the term "charge card" refers generally to a credit or debit card, frequent

shopper card, membership card, or other form of account identifier associated with a particular

customer or a group of persons who elect to be charged as one (e.g., a family membership to a video rental store, where all of the family members are associated with the same charge card).

A telephone number can be a customer identifier, but is not a preferred account identifier.

A. Hardware Arrangement

With reference now to Fig. 1 A, a hardware arrangement that may be configured

to implement the system and method of the present invention is illustrated. In the arrangement

of Fig. IA, a store 10 has several point-of-sale ("POS") terminals 14-1, 14-2, 14-N, 14-A, 14-B

and 14-C interconnected to a local POS server 12 A. Each of the POS terminals 14-1, 14-2, 14-

N, 14-A, 14-B and 14-C can be configured to store and process transaction data and to handle

two-way communications with a central server 16 which may be in the store 10 or elsewhere

(as shown). Neither the location of data storage or the assignment of tasks (functions) among

the POS terminals 14-1, 14-2, 14-N, 14-A, 14-B and 14-C, the local POS server 12A, and the

central server 16 is material to the invention. The local POS server 12A and the central POS

server 16 may be interconnected through the Internet 17, for example, using an Internet service

provider. A second store 18 is also illustrated, and similarly has several POS terminals 14-1, 14-2, 14-N, 14-A, 14-B and 14-C, interconnected to a local POS server 12B, with the local

server 12B connected to the central server 16 free of an intervening Internet connection.

In a conventional manner, a customer may select a debit or credit card with

which he or she intends to pay for goods or services that are being purchased at a particular

POS terminal. The account data from the selected card is obtained by reading the card data (for

example, using an optical scanner or a magnetic stripe reader) or entering the data at a keyboard

of the POS terminal, for example. The obtained account data along with the transaction

amount are then submitted to the card issuer for approval and clearing. In the hardware

arrangement of Fig. 1 A, the data flows from the POS terminal to the local server 12 A on to the

central server 16 to a charge card clearing house server 20 which forwards the information to a

particular institution, such as a server of a bank or card issuer 22a, 22b, or 22c. The account data and transaction amount could be sent directly from a POS terminal such as terminal 14-1

or from the local server 12A to the charge card clearing house server 20.

Fig. IB shows another hardware arrangement in which the hardware

components used to implement the system and method of the present invention are virtually

interconnected through Internet connections. In this and the other figures of this application,

the reference numbers are repeated to designate corresponding elements.

In Fig. IB, a multiplicity of terminals 14-1, 14-2, 14-N, 14-A, 14-B and 14-C,

which preferably take the form of personal computers in the homes of shoppers, use the

Internet 17 to access a merchant server 21. In a like manner, the merchant server can

communicate with the charge card clearing house server 20 using a preferably secure Internet

link or another communication link (e.g., private net or telephone). Using their terminals 14-1,

14-2, 14-N, 14-A, 14-B or 14-C, shoppers can access a web site and make a purchase transaction by selecting items for purchase, identifying themselves (and perhaps a delivery

address, which could be an e-mail address), and identifying an account to be charged. The

merchant server/web site may process the transaction itself, or with the assistance of a third

party server/manager 23 through a further connection over the Internet.

Also shown in Fig. IB is an arrangement in which a terminal can access the

third party server/manager 23 directly through their respective Internet connections, wherein

the manager 23 can coordinate the purchase transaction of the shopper, through its own

connection to the charge card clearing house server 20 and its own further connections to web sites of merchant servers.

It should be understood that the particular hardware used is not material to the

invention which can be implemented on a variety of platforms interconnected in a myriad of

ways. What is important is that the hardware be configured to receive, process and/or disseminate information concerning offers of discounts to customers and their fulfillment of

such obligations. In this vein, such information can be handled by a terminal or server having a

processor and memory which stores a series of databases (" tables"), as shown in Fig. 2. The

various tables within the terminal or server 12 are described below.

With reference now to Fig. 3, an in-store terminal is depicted, and includes a

computer 24 (having a processor and memory), input devices 26, 28, and 30, and a display 32.

The input devices may comprise a keyboard 26, an optical scanner 28, and a module 30 having

a numeric keypad and a magnetic stripe reader which permits a customer to swipe a charge

card, enter a PIN number, or enter other information that may be needed at the point of sale.

To facilitate consummation of a purchase transaction, the terminal is positioned

adjacent a checkout counter 34 which includes a continuous-belt 36 for advancing items that a customer has selected for purchase to the operator of a terminal for scanning and the like.

Optionally, an impulse-purchase display rack 38 having items such as gum 40 and magazines

42 is also positioned adjacent the terminal to entice customers at the point of purchase to

include additional items among their selected items at the point of purchase. In Fig. 3, the

customer has placed items, which were selected for purchase on the belt 36. For purposes of

the examples which follow, the items that were selected are included in the data record of Fig.

10A, and include cookies 44, arugula 46, and cheese 48.

B. Discount Offer Process The discount offer process of the present invention is now described in

connection with the purchase of items 44, 46 and 48 by the customer. With reference now to

Figs 3 and 4, a purchase transaction by customer A in accordance with one aspect of the invention includes enticing a customer to make a further purchase, in part, by offering customer

A a discount on (a) one or more of the items 44, 46 and 48 that have been selected for

purchase, (b) some other item to be purchased now, and/or (c) the entire purchase transaction.

The discount being offered, however, is subject to customer A accepting an obligation to make

a further purchase at a later time, that is, in a separate transaction.

At step 50, each of the items 44, 46 and 48 is scanned across the optical scanner

28 to include such item and its price within the memory of the POS terminal. Alternatively, the

items can be included in the memory of the terminal by using the keyboard 26. A selected

account of customer A is obtained at step 52, for example, by swiping a magnetic stripe of a

charge card using the module 30, by scanning it using the optical scanner 28, or by keying in

the account number (or a customer ID number) using the keyboard 26. Customer A is preferably identified from the charge card that is used; however, the customer can be separately

identified at step 52 by any other conventional means for input into the terminal. Having

obtained the customer's identity, an account associated with that customer, and the list of items

that have been selected for purchase, that customer's profile can be retrieved, as at step 54,

along with predetermined conditions which, if satisfied, can trigger a particular discount being

available to customer A for selection. The terminal (or local server 12 which communicates

with the terminal) then determines at step 56 whether the present items 44, 46 and 48 and/or the

customer's profile satisfy the predetermined conditions. If so, then there is a discount to offer

customer A during the present purchase transaction. Such determination can be made by

comparing entries in the various tables, described below, and identifying matches (e.g., item "2345" is associated with discount code "D80,422") or satisfied conditions (e.g., "this customer

is not an MCI customer" by examining the customer's profile).

If the purchases qualify customer A for a discount, then, at step 58, one or more

discount offers are generated (e.g., selected from a list of offers) and are presented via the display 32 or otherwise (for example, via a recorded/voice-emulated announcement, printed

tape, display on the module 30) at step 60. The discount offer includes an obligation, which

must be fulfilled, for example, in a separate transaction, and therefore the customer's

acceptance must be obtained, as at step 62. The acceptance is readily captured by the terminal

using an input device.

If the discount offer is not accepted, or if the purchases did not qualify the

customer for a discount, then the process proceeds to step 64, where the purchase transaction is

completed conventionally, for instance, by tallying the items to be purchased, charging

customer A for the items, and bagging the items so that they may be carried away. On the other hand, if the discount offer is accepted, then the discount is

immediately applied to the purchase transaction at step 66 with customer A paying less than he

or she would have had the discount been rejected. The acceptance of the discount by customer

A is included in the data within the memory of the terminal at step 68, for example, as an entry

in the issued discounts table of Fig. 11, which is described in detail below.

The discount offer process of Fig. 4 accesses, adds to and processes data

contained within the various tables stored by the terminal. Thus, in the foregoing purchase

transaction, as each of the items is scanned at step 50, the inventory table of Fig. 5 is accessed. The inventory table correlates the item code with its current price. The inventory table may

include a descriptive field, as shown, which can be posted on the display 32 and/or printed on

the customer's receipt. Also, after identifying customer A at step 52, his or her customer

profile of Fig. 6 and the conditions table of Fig. 7 can be accessed at step 54.

The customer profile contains information concerning that customer, the

customer's charge card (and charge account), and his or her purchasing habits. The customer

profile preferably maintains information concerning how many discounts were offered,

accepted, and which discounts have been determined as being suitable to offer the customer at

the time of purchase. The conditions table sets forth predetermined criteria that qualify a

customer to be offered a discount on the basis of, for example, a random selection of one or

more of the items selected for purchase, the inclusion of one or more specific items being

purchased in the present transaction, the item among the selected items having the largest profit

(if that item has an existing discount offer or the vendor is willing to provide a discount on that

item), one or more specific items that are not being purchased, spending threshold or frequency

data, or another basis maintained in or discernable by accessing the customer profile of Fig. 6. The foregoing purchase transaction is analyzed at step 56 to determine if there are any

discounts to offer the customers, for example, by comparing the item codes of the selected

items to the conditions table and customer profile and identifying any matches or satisfied

conditions.

With reference to the discount table and the obligations table of Figs. 8 and 9,

respectively, the specifics of the discount to be offered at step 60, and the obligations that must

be assented to in order to receive such discount, are made available at the terminal for

presentation to the customer. In particular, once a discount has been determined to apply to a customer at step 56, the offer is generated for display or presentation to that customer at step 58

using the data and codes in the discount and obligations tables.

The purchase transaction is captured in a record such as shown in Fig. 10A. The record of Fig. 10 A, for example, indicates that customer A selected items 44, 46 and 48 for

purchase, accepted the discount on the cookies 44 and the associated obligation to purchase

more cookies each week over the next six weeks, with the result that the entire purchase price

of the cookies ($3.99) was deducted from the total cost of the selected items. This transaction

was assigned a transaction number "60,001" (see Fig. 10A).

The record of Fig. 10A further shows that customer A was offered discount code

"D21,245", which relates to telecommunications service carriers (see Fig. 8) and that the

discount offer was declined. This discount concerns a service that is unrelated to the present

purchase transaction insofar as customer A was not shopping for a telecommunications service

carrier. However, the identified customer satisfied the requisite condition in the conditions

table of Fig. 7, namely, he is not an MCI customer and so the discount was available to that

customer and, here, the discount was in fact offered to the customer. This was determined prior to the present purchase transaction ("off line") by reviewing the customer profile of Fig. 6, with

the result that the discount code "D21,245" was entered into the customer profile as a potential

discount to offer (see Fig. 15, described below). Each discount that is accepted by the customer

is added to the issued discounts table of Fig. 11 at step 68. Declined discounts can be added as

well (not shown) for data management purposes. The third entry in Fig. 11, transaction number

"60,001", reflects the future obligations of customer A, and that entry includes the identity of

the customer, an account to be charged if the obligation is not fulfilled, and data concerning the

discount that was selected, when it was selected, and the dates by which the obligation is to be

fulfilled. Finally, the transaction is concluded at step 64, with the transaction number "60,001"

being entered into the transaction table of Fig. 12.

C. Obligation Fulfillment Process

The obligation fulfillment process arises in various contexts. First, because it

may be desirable to offer further discounts upon the condition that a prior obligation is fulfilled,

it is useful to determine whether any existing obligation is fulfilled or partially fulfilled by a

present purchase transaction. In this context, the fulfillment check process is done in real-time,

that is, concurrently with a purchase transaction and is described by the flow diagram of Fig.

13. In another context, however, the fulfillment process proceeds at predetermined intervals,

for example, based on data collected up to midnight of a given day. This latter "off-line"

fulfillment check process is directed toward identifying those customers who have failed to

meet their obligations by a specified date, as reflected by the process flow of Fig. 14. These

two process flows are discussed in turn. In discussing the obligation fulfillment check process at the time of a purchase

transaction, we first consider the purchase transaction of another customer, customer B that

occurred on October 31, 1998, as reflected in the sample record of Fig. 10B. That customer

selected cookies (items "2345") for purchase, and nothing else. At the terminal, as a result of

the process steps of Fig. 4, customer B was offered and accepted the discount for the full

purchase price of the cookies in consideration of the obligation to return each week over the

next six weeks to purchase the same type of cookies (item "2345") at each visit. Having

received the discount (i.e. free cookies) in the October 31 purchase transaction, customer B

received the cookies without spending any money, thereby receiving an immediate benefit.

The October 31 purchase transaction (transaction number "60,000") is included in the transaction table (Fig. 12) as the second row entry. Because a discount was issued to customer

B, the issued discount table (Fig. 11) also reflects, as the second row entry in that table, the acceptance of the discount and the associated obligation -in this example-, to make a series of further purchases.

For purposes of discussion, we assume that six days have gone by, so that the

date is now November 6, 1998. With reference now to the process flow of Fig. 13 A, when

customer B returns to the store, the items that he has selected for purchase and his account

identifier are obtained at the terminal at steps 70 and 72, respectively. Steps 70 and 72 may be

processed by the hardware of a terminal (or server 12) in the same manner as at steps 50 and 52

of Fig. 4, described above.

At step 74, a determination is made whether there is an entry in the issued

discounts table (Fig. 11) for the identified customer (customer B, account identifier "4321 4322

4323 4324"). If there is no entry in the issued discounts table, the process flow proceeds to step 76 where the transaction may continue in a conventional manner. Because the process

flow of Fig. 13A is done at the time that a purchase is being made, it preferably is performed in

conjunction with the discount offer process of Fig. 4. In this mode, steps 70 and 72 need not be

performed because they are redundant to steps 50 and 52. Also, in this preferred mode, the

functions performed at step 76 (continue processing the transaction) can include steps 54

through 68 of Fig. 4, namely, the discount offer process steps.

On the other hand, in the event that there is an entry in the issued discounts

table, then a further test is made at step 78 to determine whether the present purchase

transaction has fulfilled or partially fulfilled an existing obligation. This test includes

determining which discounts have been offered to the identified customer (here, customer B), and, for each such discount, determining whether one of the items now included in the memory

of a terminal (i.e. the items selected for purchase) satisfies the obligation included with the discount. The obligation and discount are associated with one another in the discount table of

Fig. 8. The determining steps are performed in a conventional manner by comparing the data

obtained by the terminal for this purchase transaction with the data in the issued discount and

discount tables. Such comparison can be made in the terminal, the server 12, or in other

hardware. Similar data representing past purchases may likewise be examined in determining

whether the obligation is satisfied.

Referring briefly to Fig. 11 , the original transaction in which customer B

selected the cookie discount (discount code "D80,422") is described in the record indicated by

figure numeral 80. On October 31, 1998, the discount was issued, as shown in field 82 of that

record, for transaction "60,000" (field 84). The selected discount is identified by discount code

"D80,422", and includes the obligation to purchase the cookies at least once per week for six weeks (see row 1 of the tables of both Figs. 8 and 9). Each of these data was included in the

record 80 of the issued discounts table when the October 31 purchase was made (see step 68).

At that time or shortly thereafter, the fulfill-by date field 86 and the next fulfill-by date field 88

were completed with regard to the subsisting obligation code "080,422" for the selected

discount. Because the obligation included with the selected discount requires the customer to

perform on multiple occasions (e.g. make purchases, go to a specified store or destination, etc.),

there is an entry in each of the fields 86 and 88 of record 80. In particular, because cookies are

to be purchased once per week for six weeks, the fulfill-by date was set to November 7, 1998

and the succeeding fulfill-by date was set to November 14, 1998 in field 88.

Thus, at step 78 of Fig. 13 A, the determination of whether the present purchase transaction has fulfilled or partially fulfilled an existing obligation includes evaluating the

items that have been selected to determine not only whether the correct item was purchased, but

also to check whether the item was purchased within the specified time period. Step 78

performs the task of determining whether all of the conditions included in the obligation have

been satisfied, a prerequisite to the customer retaining the benefit of the discount. (The

consequences of failing to fulfill an obligation are discussed below.)

In the present example, customer B has partially fulfilled the obligation by

purchasing soft baked cookies 44 having item code "2345" on November 6, 1998. At step 90,

the issued discounts table is updated to reflect this transaction. In particular, fields 92 and 94

of record 80 reflect the date on which this portion of the obligation was fulfilled, and the fact

that the obligation was fulfilled (Obligation Fulfilled?: "Yes"). As a result, the customer will

retain the discount provided on October 31, subject to fulfilling the remaining (subsisting) portion of this obligation. The process flow then proceeds to step 76 to continue processing the

transaction, for example, by performing the steps of the discount offer process.

Fig. 13B shows an optional update process to update the issued discounts table.

The illustrated process is useful in creating certain entries in the issued discounts table, such as

the entries associated with the obligation included with the cookie discount accepted by

customer B. More generally, when an obligation includes a set of acts or further purchases that

the customer is obliged to perform in order to retain a discount that has been provided to him, it

is desirable to create new record entries in the issued discounts table upon fulfilling each part of the obligation. At step 96, the process starts as a function routine called by a main program,

preferably the process of Fig. 13 A as part of step 90, although it can be performed after the

purchase transaction, for example, if the fulfillment check process of Fig. 14 makes the call to this function routine. At step 98, a test is made whether any data is included in the next fulfill-

by date field 88 of a given record of the issued discounts table which is presently being pointed

to. If not, then the obligation was a one-time obligation with a single fulfill-by date and the

process control passes back to the program that made the call to the function routine, at step

100. However, if there is a next fulfill-by date entry in field 88, then a new record 104 is

entered in the issued discounts table at step 102, with the original transaction information from

record 80 carrying forward to the new record, namely, the account identifier, transaction

number, issue date, and discount code. The new record 104 has the data from the next fulfill-

by date field 88 of record 80 (November 14, 1998) included in its fulfill-by date field 86. Thus,

while the obligation (or portion thereof) reflected in record 80 has been fulfilled, the obligation

reflected in record 104 has not, as of yet (November 6 in this example), been fulfilled and

therefore, the discount that was provided to the customer remains subject to retroactive treatment, either by charging the customer's account or by otherwise penalizing the customer

for non-compliance. Thus, the fields 92 and 94 are empty for the record 104. At step 106, a

subsequent fulfill-by date is calculated for record 104, if one is needed, with regard to the issue

date of the discount in field 82 and the terms of its obligation (e.g., six weeks worth of

purchases, etc.) and included in field 88 of the record 104 (in this example, November 21).

Thereafter, program control returns to the calling program, at step 100, as described above.

As an alternative to the process flow of Fig. 13B, a series of records, each

including a fulfill-by date which spans further and further into the future could be made at the

time that the discount is accepted. This may be preferred where a customer agrees to be

penalized each time he fails to meet an obligation.

We now turn to the obligation check process of Fig. 14, which is performed at

the end of the day or once per week, for example. In the process of Fig. 14, a number of

records within the issued discount table are evaluated or reviewed to determine whether the

obligation has been fulfilled by the fulfill-by date specified in field 86 for each such record.

Failed obligations result in a penalty being assessed to the customer. If the process of Fig. 14 is

performed daily, for example, then only those records having that day's fulfill-by date need be

examined. Records having earlier fulfill-by dates can be expunged, marked or flagged so that

they are not examined twice. In any event, a record is accessed at step 120 and examined to

determine at step 122 whether, for instance, the fulfill-by date has passed since the last

evaluation of the records in the database/tables. For each record which is examined, the

"obligation fulfilled" field 94 (Fig. 11) is checked to see whether the obligation has, in fact,

been fulfilled. If the obligation has been fulfilled, the record is updated (e.g., marked) at step

126 and the next record is examined, by accessing it at step 128 and proceeding to step 122

until there are no more records, at which point the process flow of Fig. 14 ends (not shown).

Program control may resume with the program that caused the process of Fig. 14 being started,

for example. On the other hand, if the obligation was not fulfilled by the fulfilled-by date in

field 86, a penalty is applied, at step 130, to a predetermined account of the customer.

Preferably, the penalty is applied by charging the account without user intervention.

Discounts in accordance with the present invention are not obtained merely by

redeeming a discount offer such as a coupon. Rather, to obtain the benefit of an immediate

discount, the customer must agree to do something in the future, such as make a further purchase or go to a particular place (and identify yourself to the system so that your obligation

can be noted as fulfilled). Thus, rather than giving away a benefit to the customer in the hopes

that store or brand loyalty has been fostered, the retailer can regain the cost of the benefit, and

may even penalize a customer, if the customer fails to comply with any agreed-upon terms.

The following description concerns the contingent situation of imposing a penalty for non-

compliance with an obligation.

With reference to Fig. 11, the issued discounts table includes record 140 of

customer A, discussed above. Customer A was the individual who made the purchases shown

in Fig. 3, namely, the cookies 44, the arugula 46, and the cheese 48. Customer A also accepted

the discount for the cookies 44, and its included obligation to purchase more cookies once per

week for six weeks. The discount was issued on October 31 (see field 82) and the (first) fulfill-

by date is November 7, one week later. At the end of the day on November 7, a record

evaluation in accordance with the process of Fig. 14 found no date in field 92 by which the obligation was fulfilled. Since the fulfill-by date 86 has now passed, the obligation was not

fulfilled and the "obligation fulfilled" field 94 indicates "No." Accordingly, customer A is to

be penalized for obtaining the benefit of free cookies (normally having a $3.99 price) without

performing his agreed upon obligation. In contrast, customer B (record 80) satisfied his

obligation which was also due by November 7, and therefore will not be penalized.

The penalty imposed on a customer is known to the customer because it is either

communicated to the customer as part of the discount offer, or because it is an agreed upon

provision in a membership or club contract. The penalty may be restricted to a charge on a selected account of the customer (e.g., the credit card used by the customer at the time that the

discount was accepted, a debit card of the customer, another charge account of the customer, a

checking account, or a bill may be generated and sent by mail, etc.). The penalty may include further charges such as interest or money penalties applied to the selected account. The penalty

may be applied to an account other than the one used to pay for the purchases at the time that

the discount was accepted. The penalty may also be unconventional forms of payment, such as debiting frequent flier miles or a time-credit on a telephone calling-card belonging to the

customer if the obligation is not satisfied. When the obligation includes a stream of

acts/purchases that the customer must fulfill, a penalty as described above may be imposed one

or more times, for example, the first time the customer fails to fulfill an act or purchase or each

time the customer fails to perform an act or make a purchase by the fulfill by date (e.g., the

failure to make a monthly health-club payment). Thus, the penalty imposed on the customer

may equal or exceed the original benefit that was provided.

In a different form of penalty, the customer, as a frequent shopper club member,

might normally enjoy a certain discount on all transactions by identifying himself as a member at the point of purchase. However, the penalty to such a customer for failing to satisfy an

obligation might be to reduce the level of discount that the customer otherwise would have

enjoyed. With this form of penalty, frequent shoppers can achieve greater and greater discount

levels (or tiers in the shopper program) based upon any number of factors (e.g., spending levels,

frequency of store visits) and have to maintain such levels or satisfy other obligations to avoid

being shifted to a different tier with lesser benefits. Alternatively, frequent shoppers can start

at high discount levels and be required to maintain or reach specified goals (e.g., spending

levels, frequency of store visits) in order to retain such benefits, the penalty here constituting a

reduction in benefits (e.g., from a 5% discount on all transactions to a 4% discount).

As can be appreciated, the penalty may be applied at the time of a purchase or at

some other time.

The tier of a customer can be maintained in the customer profile, accessed by a

terminal, and a discount selected in accordance with that customer's tier. In particular, a

separate routine or table may be used to correlate a tier with a discount level. Of course, the

customer profile itself may maintain the current discount level to which the customer is

entitled. Other information in the customer profile including the frequency of visits, the

amount of money spent by the customer at each visit or over time, the number of purchases

being made at each visit, the purchase of specific items by the customer, or the fulfillment of

obligations that were included with accepted discounts, can be used to modify the benefit

(discount) that the customer is entitled to receive.

An obligation is satisfied in accordance with its terms, and the terms on the

obligation vary. In accordance with the invention, a customer's assent must be obtained for any

lawful obligation to perform in the future in order to obtain a discount or premium at the time of the first purchase. One type of obligation which has appeal to sources of goods and services

obliges the customer to repeat the purchase of a specific item. Such an obligation fosters brand

loyalty. Another type of obligation requires the customer to purchase a competing brand within

a specified time period. This type of obligation fosters competition, and may be more effective

than conventional advertising campaigns insofar as the customer retains a benefit only if he or

she buys the competing product. Consider, for example, an offer by one cola company to

purchase its product twice in the next month instead of its rival's (fungible) product, in

exchange for a discount today on the rival product which the customer had selected for

purchase. Further, such an obligation may prompt the customer to regularly purchase a brand

he or she has not or does not regularly purchase. Yet another type of obligation which may appeal to merchants is an obligation to go to a specific store such as the store where the

customer received the discount in the first place (to foster store loyalty), to return to that store sooner than that customer's historical average, or to go to another store (to foster co-marketing

strategies or encourage shopping at related stores such as The Limited® and Victoria Secret®,

two different stores owned by the same company). The obligation may require the customer to

make a purchase, repeat the purchase of the item for which the discount was given, or visit the

store (and identify oneself to the system). Regardless of the form, such obligations bind the

customer to act or spend in a desired manner in exchange for receiving an immediate benefit at

the time of purchase. A combination of these obligation forms can be used, for example, to

encourage the customer to purchase another brand of product from another store. As an

illustration, a customer purchasing pajamas at The Limited® may obtain a discount at the time

of purchase, which is only retained if the customer goes to Victoria Secret® and purchases

undergarments within the next 30 days. Because both of these stores are owned by the same company, the company can more effectively co-market its wares and enjoy more sales by

providing a present customer of one store with an incentive to shop at another store owned by

the company.

Compliance with an obligation or a stream of obligations can be monitored by

the vendor (store or merchant), a credit institution, the entity that maintains the preselected

account of the customer that is to be charged the penalty, or a third party. Compliance may

require access to a store's computer to determine whether a specific purchase was made.

However, compliance may be discernible by reviewing or querying the preselected charge

account of the customer for an entry, which indicates that the customer has made the obligatory

purchase within the specified period of time.

In the following specific examples, a variety of obligations are described in real- world contexts. Each of these examples concerns vendors that customers frequent regularly, but that historically, have not had high customer loyalty. That is to say, consumers typically

patron several of each type of store, based on price and convenience factors. The present

invention, by contrast, provides an incentive to such consumers to return to a particular store or

otherwise act in a desired manner in order to retain benefits that they have already received.

This incentive can foster store loyalty.

EXAMPLE 1 : Grocery Stores, Drug Stores, Supermarkets, And The Like

Substantially as described in detail above, a customer making various purchases

at a store is offered a discount for one of the selected items if he or she agrees to buy the same

item again within a specified time period. The transaction is charged to a charge card of the

customer in an amount (perhaps zero charge) which reflects the accepted discount, thereby providing the customer with an immediate benefit and an incentive to make a specific purchase

in the future in order to retain the discount. If the customer fails to satisfy the agreed upon

obligation, the charge card or other preselected account will be charged a penalty, such as the

full value of the discount that was granted at the time of the initial purchase plus an optional an

additional amount. On the other hand, if the customer satisfies the obligation, then the

promotion was successful which inures to the benefit of the store, the source of the item

purchased, or both.

EXAMPLE 2: Grocery Stores, Drug Stores, Supermarkets, And The Like Again, substantially as described in detail above, a customer may be known

through his or her profile to frequently purchase a particular type of food such as fish, or cereal.

The discount that is offered can include an obligation that the customer return to buy an item

of that type within a specified time period, and perhaps at least a predetermined dollar amount of such an item. The manner of charging the customer and monitoring obligation-compliance

may proceed as described above, and, for ease of discussion, is not referred to in the following

examples.

EXAMPLE 3: Grocery Stores, Drug Stores, Supermarkets, And The Like

Again, substantially as described in detail above, a customer may be known

through his or her profile to infrequently (or never) purchase a specific item (e.g., the customer

ordinarily purchases a generic brand rather than a more expensive, brand-name product of the

same type) or particular food type (e.g., the customer ordinarily purchases frozen vegetables

rather than fresh vegetables). The discount that is offered can include an obligation that the customer returns to buy the newly selected item(s) within a specified time period. The discount

and obligation, therefore, can encourage the customer toward more expensive products, with

the source of such products (e.g., a manufacturer or distributor) potentially reimbursing the

store for the discount, for example, in the expectation that the customer may become loyal to

those products.

EXAMPLE 4: Grocery Stores, Drug Stores, Supermarkets, And The Like

In this example, the customer may be a "frequent shopper" club member of the

store. The store has access to a customer profile, which includes information concerning the

frequency of that customer's visits to that store. The customer may be offered a discount each

time he or she visits the store and makes purchases, which discount provides an immediate benefit to the customer at the time of such purchase. The customer is subject to a retroactive

penalty charge if he fails to return to the store within a specified period of time. The discount

provided to a specific customer may be "tiered" as described above, and be adjusted upwardly

or downwardly as a function of the customer's absolute compliance with his or her obligations,

or the relative compliance (e.g., to maintain c rent tier, customer must satisfy 80% of his or

her obligations).

Instead of frequency of visits, the criterion for retaining a discount on the whole

purchase may be based on the minimum dollar amount spent by the customer during one or

more past purchases.

EXAMPLE 5: Grocery Stores, Drug Stores, Supermarkets, And The Like The customer in this example is offered a product for purchase for free, such as the

magazine 42 on the impulse rack 38 of Fig. 3, provided that the customer agrees to mail to the

publisher the "blow-in" card within the magazine 42 within a prescribed period of time or call a

fulfillment house and give a code printed on his receipt. If the customer agrees, in addition to

completing the purchase transaction, the terminal or other hardware advises the publisher that a

potential subscription has been garnered and that an issue has been tendered to the identified

customer for free (or a discount). If the customer subscribes, in accordance with the assented-to

obligation, the publisher provides the retailer with the fee for collecting the subscription and the cost of the initial magazine. If the customer does not subscribe, he or she is penalized, as described above.

The retailer, knowing the customer's address and charge account, could manage the subscription process by forwarding the requisite information to the publisher. If the customer

cancels the subscription before it expires, the customer would be charged a penalty.

EXAMPLE 6: Movie Theater

Upon paying for a ticket using a charge card, the customer in this example is

offered a premium of (e.g., free) or a discounted price on soda, popcorn, or candy on the condition

that the customer return to see another film at that theater within a specified time period. If the

customer returns, he or she can be offered another discount with yet a further obligation to return.

If the customer does not return as specified, he or she is penalized as described above. In the

competitive market of entertainment, the invention in this industrial application better ensures

loyalty of a patron, that is, motivates an existing customer to return soon. EXAMPLE 7: Restaurant

With limited budgets and time for dining on the one hand and a myriad of

restaurant choices on the other, restaurants benefit from the system and method of the present

invention by providing a customer —who has already opted to dine in that establishment- with a

discount on his or her meal, appetizers, or drinks, or an extended menu, in exchange for a

commitment to return to the restaurant for another meal within a specified time period. The

customer in this example merely has to use a charge card and assent to the discount offer. Non-

compliance with the obligation to return will result in a penalty (e.g., a charge to his credit card

account), as described above.

EXAMPLE 8: Gas/Service Stations, Mini-Marts, And The Like

In the highly-competitive service industry of gasoline stations and mini-marts, the

customer in this application of the invention is rewarded with an immediate discount on gasoline

(e.g., premium gasoline at a reduced price), provided with a discounted or free car wash, or

otherwise rewarded at the time of a purchase with a charge card, on the condition that the customer

return to that station within a specified time period and make a purchase (perhaps of a minimum

dollar amount). A stream of such discounts and obligations can be made to the customer to better

ensure loyalty or patronage.

EXAMPLE 9: Co-Branded Discounts

In this example, customer may be known through his profile to not subscribe to a

particular telecommunications provider, Internet service, Internet access provider, cable TV

providoer, health club, magazine, or insurance carrier (e.g., automobile insurance), for example. The customer may be offered a discount on items selected for purchase if the customer agrees to

subscribe for a period of time, and make a payment or set of payments for such subscription/

service. The retailer or website providing the customer with the discount may be reimbursed for

the discount by the provider of the subscription, or by another third party. The customer will retain

the discount provided at the time of purchase so long as the obligation is fulfilled, or continues to

be fulfilled. Any penalty that is assessed to the customer for non-compliance with the obligation

may be shared by the retailer or website on the one hand and the subscription provider on the other.

The retailer may share in a commission for obtaining the customer's assent to the subscription or service.

It should be understood from the preceding example that access to the customer

profile may be shared among several sources for marketing co-branded offers. The customer may

prefer to not allow his or her customer profile data to be shared with other stores or sources, in which case a co-branded offer can be made blindly (that is, without knowing whether the customer

is already a subscriber or customer) or not at all.

EXAMPLE 10: Dual Co-Branded Discounts

In this example, the customer is provided with conditioned discounts from two

sources, for example, two retailers or one retailer and a service provider. The customer must

satisfy obligations to both in order to retain (and later not be penalized for) a discount that has been

provided. As a specific illustration, a customer obtains a preferred customer discount with a

software store if the customer agrees to subscribe to a particular cellular telecommunications

provider and remain with that provider. In the same transaction, the customer is provided with

discounted rates with the telecommunications provider if the customer agrees to continue purchasing from that retailer on a specific basis (once a month), or perhaps if the customer further

agrees to purchase a specific product such as name brand floppy disks from that retailer (third

brand marketing). Discount retention, penalties, and commission sharing can be as in the prior

example.

EXAMPLE 11: Credit Card Issuer

In this example, a card issuer provides a lower minimum payment, lower interest

rate, credit-card theft protection service, travel club, or other service of value in exchange for the

customer's assent to charge a minimum amount each month on the card, pay minimum balance amount or otherwise act in a manner desired by the card issuer. If the customer fails to meet the

obligation in any given month, he or she is penalized, for example, having to pay a greater interest

rate or by being billed a service charge for membership in the theft protection service, or for some other benefit. The credit card issuer may wish to co-market with other brands, such as airlines,

restaurants, etc.

Turning now to Fig. 15, a background or "off-line" potential-discount offer process

identifies discounts not yet offered, but which may be accepted by a customer. This process may

be selectively run when a source of an item or service desires to have a discount offered to

customers who fit a targeted profile. For example, a cellular telephone service provider may be

interested in persons who are not already their customers but who are customers of a competing

service. Alternatively, the process may be called by another program, for example, before or after

executing the discount fulfillment check process of Fig. 14.

At step 140, a customer profile is accessed, substantially as described above at step

120 of Fig. 14. The criterion or criteria of the source or retailer are compared at step 142 against the entries in the presently accessed customer profile. In the event that the criterion (criteria) are

satisfied, the potential discounts field 144 (see Fig. 6) is updated, at step 146 to enable the terminal

to display or otherwise enable the operator of the terminal to present that offer to the customer at

a later time when the customer has identified himself. Program flow then proceeds to the next

record, at step 148, so that that record can be compared at step 142 as described above. If the

criterion (or criteria) was not satisfied, the process flow would proceed from step 142 to step 148,

without updating the customer profile of the record presently under review.

When the potential discounts field 144 is available to a terminal, any entries therein

can be offered to the customer as a discount. With reference now to Figs. 3, 4, 10A and 12, customer A, who was the one who purchased the cookies and other items, was also offered, but

declined, a discount for telecommunications service, namely, discount code "D21,245". This is

shown in the sample record of Fig. 10A. That offer was available for presentation to the customer based on the data in field 144 of the customer profile, as shown in Fig. 4. The transaction table

of Fig. 12 further reflects this data, and is useful for providing a summary report of a pertinent data

to the discount issuer such as who accepted the discount, the success of the campaign

(accept/decline ratio), and perhaps who was qualified for the offer or who declined it. In any event,

the data in field 144 was included in the customer profile based on a comparison of the customer

profile to predetermined criteria, using a process as in Fig. 15.

The discount offering process and obligation fulfillment process can be managed

by a particular store, a computer server connected to several stores of the same or different store

chain, a credit card issuing bank, a credit card clearing network, or an Internet service provider.

All or part of the purchase transaction may occur over the Internet using, for

example, the type of hardware arrangement depicted in Fig. IB. As understood by those of skill in the art, the customer need not physically visit a store in order to make purchases, identify

himself, and identify an account to be charged. Nor is physical presence in a store necessary to

assent to a discount offer, to receive the items that were selected for purchase, or to fulfill the

associated obligation. This information can be communicated from a physically remote seller (e.g.,

the merchant server/web site 21) and customer locations (e.g., terminals 14-1, 14-2, 14-N, 14-A,

14-B and 14-C) using a communication link such as the Internet 17, computers (namely, terminals

14-1, 14-2, 14-N, 14-A, 14-B and 14-B), and appropriate signals to identify the selected items, the

customer and his or her charge account, and his or her acceptance of a discount that has been

offered. It should be understood that the POS terminal can be a customer's personal computer.

Also, the selected items can be forwarded to the computer of a third-party, or maintained exclusively by the seller's computer.

When the transaction occurs over the Internet, the shopper, using a personal computer or terminal, may access the Internet 17 and arrive at a merchant or web site from which products or services are available for purchase/subscription. The merchant server/web site 21 may

be configured to implement the invention as described above, or may communicate transaction,

item, customer data, and other information to the third-party server/manager 23 which is instead

configured to implement the above-described invention. Alternatively, the shopper may access the

third-party server/manager 23 directly through an Internet connection 17, and the manager 23 can

coordinate the purchase transaction to thereby implement the invention as previously described.

When using the Internet, customer tracking can be facilitated by storing "cookies"

on the customer's hard drive. As is know in the art, "cookies" are typically files, which reflect the

status, profile or other data of the customer and are associated with the customer's computer. In

this manner, a variety of retailers could access the cookies and/or modify them and thereby track their customers in the same way that traditional retailers have tracked customers using frequent shopper cards.

The foregoing description included, in detail, a particular arrangement of

information in the memory of a machine, including tables or databases which are accessed under

control of a program or subroutine, or which access one another directly to satisfy queries

(comparisons of data, existence of data, content of data, etc.). The detailed description, however,

is to enable one of skill in the art to practice the invention, and is not restrictive of the invention,

which is defined solely by the recitations in the appended claims, which claims encompass

methods and systems which include the elements recited in the claims or equivalents thereof.

Claims

What Is Claimed Is:

1. A method, comprising the steps of:

providing the customer with a discount at a time of a first purchase, the

discount including an obligation to make a further purchase at a later time;

associating, in the form of digital data, the customer with the provided

obligation;

reviewing the digital data to identify any failed obligations; and

charging, without user intervention, a predetermined account of the

customer for each failed obligation.

2. The method as in claim 1, including the additional step of obtaining the customer's assent

to the obligation, prior to the step of providing the customer with a discount.

3. The method as in claims 1 , including the step of identifying the customer at the time of the first purchase.

4. The method as in claim 3, wherein the digital data includes past purchases made by the identified customer.

5. The method as in claim 4, wherein the digital data is included as an entry in an issued discount table.

6. The method as in claim 3, wherein the reviewing step includes:

comparing a fulfill-by date of the obligation to a present date;

for each fulfill-by date which has elapsed as compared to the present date,

determining whether the obligation was satisfied by the identified customer; and

marking each obligation which was not satisfied as a failed obligation.

7. The method as in claim 6, wherein the flagged obligation is included in the issued discount table.

8. The method as in claim 3, wherein the obligation is satisfied by the identified customer

when the customer makes the further purchase.

9. The method as in claim 8, wherein the further purchase required to satisfy the obligation

is a purchase of a predetermined item which the customer assents to when the first purchase is

made.

10. The method as in claim 9, including the additional step of charging a source of the

predetermined item in an amount not less than an amount of the discount.

11. The method as in claim 8, wherein the further purchase required to satisfy the obligation

is a purchase from a predetermined vendor which the customer assents to when the first purchase

is made.

12. The method as in claim 3, wherein the reviewing step is performed repeatedly.

13. The method as in claim 3, wherein the predetermined account is charged in an amount

which is at least equal to the amount of the discount.

14. The method as in claim 3, wherein the predetermined account is charged in an amount

which exceeds an amount of the discount.

15. The method as in claim 3, wherein the predetermined account that is charged for each failed

obligation differs from an account used to pay for the first purchase.

16. The method as in claim 3, wherein the obligation includes periodic payments for an item associated with the discount, and further comprising the step of monitoring the predetermined

account of the customer for periodic charges related to the item.

17. The method as in claim 3, wherein the step of charging is performed at a time of a

subsequent purchase.

18. A method comprising, the steps of:

identifying a customer and a selected account associated with the customer;

providing, in a memory, at least one item that was selected for purchase by the

customer from a vendor, at least one item having a predetermined total price; selecting a discount to offer the customer in accordance with a preselected criterion,

the discount including an obligation to make a further purchase at a later time, offering the discount

to the customer;

receiving from the customer an indication of acceptance in response to the step of

offering;

(1) associating, as digital data, the obligation with the customer; and

(2) charging the customer an amount which differs from the predetermined total price.

19. The method as in claim 18, wherein the step of selecting a discount to offer to the customer

comprises randomly selecting an item having a discount associated therewith from at least one item.

20. The method as in claim 18, wherein the step of selecting a discount to offer to the customer

comprises selecting a discount that is associated with an item from at least one item which has a

largest profit.

21. The method as in claim 18, wherein the step of selecting a discount to offer to the customer

comprises identifying whether a specific item was purchased, and, if so, selecting a discount that

is associated with the specific item.

22. The method as in claim 21 , wherein the obligation to make the further purchase obliges the

customer to purchase the specific item during a subsequent purchase.

23. The method as in claim 22, wherein the obligation further obliges the customer to purchase

the specific item from the vendor.

24. The method as in claim 21 , wherein the obligation to make the further purchase, obliges

the customer to purchase a different item.

25. The method as in claim 24, wherein the different item is not among at least one item

selected for purchase.

26. The method as in claim 24, wherein the obligation further obliges the customer to purchase

the different item from the vendor.

27. The method as in claim 24, wherein the obligation further obliges the customer to purchase

the different item from another vendor.

28. The method as in claim 24, wherein the specific item has a first brand and wherein the

different item has a second brand.

29. The method as in claim 28, wherein the different item is fungible for the specific item.

30. The method as in claim 18, wherein the later time by which the customer is obliged to make

the further purchase is determined by setting an obligation fulfill-by date based on a preselected

interval.

31. The method as in claim 18, wherein the digital data is included as an entry in an issued

discount table.

32. The method as in claim 31, including the additional steps, after the step of receiving an

indication of acceptance, of: determining whether there is an entry in the issued discount table for the customer;

and

determining whether a current purchase fulfills an obligation entered in the issued

discount table for the customer, and, if so, then updating the issued discount table to reflect the

current purchase.

33. The method as in claim 18, wherein the obligation includes periodic payments for an item

associated with the discount and further comprising the step of monitoring the selected account of

the customer for periodic charges related to the item.

34. The method as in claim 18, wherein the preselected criterion is a customer profile.

35. The method as in claim 34, wherein the customer profile includes data concerning an

identity of and frequency with which items are purchased by the customer, and wherein the step

of selecting a discount to offer to the customer comprises selecting the discount associated with

a specific item of at least one item which is most frequently purchased.

36. The method as in claim 34, wherein the customer profile includes data concerning an

identity of and frequency with which items are purchased by the customer, and wherein the step

of selecting a discount to offer to the customer comprises selecting the discount associated with

a specific item of at least one item which is least frequently purchased.

37. The method as in claim 36, wherein the specific item is not included in the customer

profile.

38. The method as in claims 35, wherein the obligation to make the further purchase, obliges

the customer to purchase the specific item during a subsequent purchase.

39. The method as in claim 38, wherein the obligation further obliges the customer to purchase the specific item from the vendor.

40. The method as in claim 35, wherein the obligation to make the further purchase, obliges

the customer to purchase a different item.

41. The method as in claim 40, wherein at least one item does not include the different item.

42. The method as in claim 40, wherein the obligation further obliges the customer to purchase

the different item from the vendor.

43. The method as in claim 40, wherein the obligation further obliges the customer to purchase

the different item from another vendor.

44. The method as in claim 34, wherein the customer profile includes data concerning the

customer's relationships with third-parties, and wherein the selecting step comprises selecting the

discount associated with a third-party with which the customer does not have a relationship.

45. The method as in claim 44, wherein the relationship is defined by at least one of a magazine

subscription, a health-club membership, a shopper-club membership, a club membership, a

telecommunications service agreement, Internet service, Internet access, a cable television

subscription, and an insurance contract.

46. The method as in claim 45, including the further step of a vendor charging the third party

whose discount was selected.

47. The method as in claim 46, wherein the amount charged to the third party exceeds a

difference between the predetermined total price and the amount charged to the customer.

48. The method as in claim 34, wherein the customer profile includes data concerning the

customer's purchase history with the vendor and wherein an amount of the discount is set in

accordance with the customer's purchase history.

49. The method as in claim 48, wherein there is a maximum discount amount that can be

accorded to the customer.

50. The method as in claim 48, wherein the vendor has a membership club having plural tiers,

each tier having a predetermined discount level associated therewith and wherein the customer

profile includes a tier data entry defining a tier in which the customer is included, whereby the

amount of the discount is set in accordance with the tier in which the customer is included.

51. The method as in claim 50, wherein the customer's purchase history governs the tier data

entry within the customer profile.

52. The method as in claim 51 , wherein the tier data entry is modified in response to at least

one of:

successive purchase from the vendor, a frequency with which the customer makes purchases from the vendor, a predetermined amount of money charged by the vendor to the customer during

a particular purchase,

an amount of money charged by the vendor to the customer over a period of time,

a the purchase of predetermined items, and

fulfillment of obligations included with accepted discounts.

53. The method as in claim 34, wherein the customer profile includes data concerning the

customer's purchase history with the vendor and wherein discounts available for selection vary

with the customer's purchase history.

54. The method as in claim 53, wherein the vendor has a membership club having plural tiers,

each tier having a set of discounts available for selection, and wherein the customer profile includes a tier data entry defining a tier in which the customer is included, whereby a discounts

available for selection are set in accordance with the tier in which the customer is included.

55. The method as in claim 54, wherein the customer's purchase history governs the tier data

entry within the customer profile.

56. The method as in claim 55, wherein the tier data entry is modified in response to at least

one of:

(a) successive purchases from the vendor,

(b) frequency with which the customer makes purchases from the vendor,

(c) a predetermined amount of money charged by the vendor to the customer during a particular purchase,

(d) an amount of money charged by the vendor to the customer over a period of

time,

(e) a purchase of predetermined items, and

(f) fulfillment of obligations included with accepted discounts.

57. The method as in claim 34, wherein plural sources share access to the customer profile,

whereby specific customers who meet a preset criterion of at least two sources are targetable for

a co-branded offer.

58. The method as in claim 34, wherein the later time specified in the obligation is set in order

to prompt a next visit sooner than the customer's historical average frequency of visits to the

vendor.

59. The method as in claim 18, wherein the digital data includes past purchases made by the

customer.

60. The method as in claim 60, wherein the digital data is included as an entry in an issued

discount table.

61. The method as in claim 18, wherein the amount charged to the customer is charged to a

selected account.

62. The method as in claim 18, wherein the amount charged to the customer is equal to the

predetermined price less an amount of the discount.

63. The method as in claim 18, including the step of garnering a fee from a third party for

providing the customer with the discount.

64. The method as in claim 18, including the step of charging a source of an item for which the

discount was selected in an amount not less than a value of the discount.

65. The method as in claim 36, wherein the obligation to make the further purchase, obliges

the customer to purchase a specific item during a subsequent purchase.

66. The method as in claim 66, wherein the obligation further obliges the customer to purchase

the specific item from the vendor.

67. The method as in claim 36, wherein the obligation to make the further purchase, obliges

the customer to purchase a different item.

68. The method as in claim 68, wherein the different item is not among the at least one item

in the list.

69. The method as in claim 68, wherein the obligation further obliges the customer to purchase

the different item from the vendor.

70. The method as in claim 68, wherein the obligation further obliges the customer to purchase

the different item from another vendor.

71. A method comprising the steps of:

identifying a customer and a selected account associated with the customer;

providing, in a memory, at least one item selected for purchase by the customer

from a vendor;

selecting a premium to offer the customer using a preselected criterion, receiving

acceptance of the premium including an obligation to make a further purchase at a later time; and

in the event that the premium is accepted,

associating, as digital data, the obligation with the customer; and providing the premium to the customer at no additional charge during purchase.

72. A terminal for completing a purchase transaction, the terminal including an electronic

memory and a processor, the terminal being connected to a data store and being configured to

perform the following steps:

identify a customer and at least one charge account associated therewith based upon

an input customer signal;

identify items selected for purchase by the customer based upon an input selected-

item signal, the items having a predetermined total price; select a discount from the data store to offer the customer using a preselected

criterion, the discount including an obligation with which the customer must comply at a later time; obtain an accept signal which signifies that the customer accepted the discount; and

in the event that the accept signal is obtained,

storing in the data store the customer's acceptance of the obligation; and

charging the customer an amount which differs from the predetermined total price.

73. The terminal of claim 73, wherein the terminal is a POS terminal.

74. The terminal of claim 73, wherein the terminal is a computer server.

75. The terminal of claim 73, wherein the data store associates customers with respective

charge accounts.

76. The terminal of claim 76, wherein the data store further associates each customer with any

discounts that the customer has accepted.

77. The terminal of claim 73, wherein the terminal includes an optical code reader which is

used to obtain at least one of the customer signal and the selected-item signal.

78. The terminal of claim 73, wherein the terminal includes a magnetic card-stripe reader

which is used to obtain at least one of the customer signal and the selected-item signal.

79. The terminal of claim 73, wherein terminal is a computer server and wherein the customer

signal and the accept signal are provided to the computer server by a customer at a remote site

connected by a communication link.

80. The terminal of claim 80, wherein the selected-item signal is provided to the computer

server by the customer at the remote site.

81. The terminal of claim 80, wherein the selected-item signal is provided to the computer

server by another server which is operated by a third-party.

82. The terminal of claim 80, wherein the data store is maintained by the computer server.

83. The terminal of claim 80, wherein access to the data store is restricted to the computer

server.

84. The terminal of claim 73, wherein the obligation is to make a further purchase within a

prescribed period of time.

85. The terminal of claim 73, wherein the obligation is to access a specific web site.

86. The terminal of claim 73, wherein the items selected for purchase by the customer were

selected at a first site on the Internet and wherein the obligation with which the customer must

comply at a later time is to link to a second site on the Internet.

87. The terminal of claim 87, wherein the obligation further requires that the customer make the link to the second site on the Internet from the first site.

88. A method, comprising the steps of: receiving data indicating at least one item a customer has selected for purchase, the

at least one item having a total price;

offering a discount in exchange for the customer participation in a future transaction

having a predetermined condition;

receiving a response to the offer discount;

charging the customer the total price if the response indicates rejection; and

charging the customer a first amount that is less than the total price if the response

indicates acceptance.

89. The method of claim 89, further comprising: determining whether the customer has participated in a transaction having the

predetermined condition.

90. The method of claim 90, further comprising:

charging the customer if the customer has not participated in a transaction having the

predetermined condition.

91. The method of claim 91 , in which the customer is charged a difference between the total

price and the first amount if the customer has not participated in a transaction having the predetermined condition.