Method of administering a rebate system

[00002] This application claims priority on Provisional Application Ser. No. 60/084,954, which was filed on May 11, 1998.

[00003] This application was filed with a microfiche appendix comprising 7 fiches and 367 frames.

[00004] 1. Field of the Invention

[00005] This invention relates to rebate systems. More particularly, this invention relates to a method of administering a rebate system wherein cash value of a rebate is placed in an omnibus trust account.

[00006] 2. The Prior Art

[00007] Rebate incentive programs provide sponsoring companies an opportunity to promote the sales of the sponsoring company's products or services. Such programs involve a participant purchasing a product from a merchant and then receiving a rebate from the sale. For example, with an instant rebate if one buys a product, the merchant credits the purchaser so that the consumer pays less than the marked price for the product. Some rebates require the consumer to purchase the product then mail a form to a rebate clearing house to receive the rebate. Such rebates provide an immediate incentive to the purchaser. However, they have the disadvantages of not providing an incentive for regular brand loyalty and not providing feedback to the merchant regarding the buying habits of the consumer. Furthermore, mail-away rebates have the disadvantage of requiring the consumer to expend extra effort to secure the rebate, making the product less desirable to the consumer.

[00008] Rebate cards provide a merchant the ability to grant rebates on every purchase of a product. Such rebate cards typically include a magnetic stripe that includes purchase-relevant information. Typically, such information includes an account identifier and demographic information about the consumer. In using a rebate card, the consumer presents the card at the point of sale, the card is swiped through a card reader, the information is transmitted to a central computer and the computer credits the consumer's rebate account. At a later date, the rebates accumulated over a predetermined period of time are disbursed to the consumer in the form of a check. Such rebate cards usually are merchant-specific and, therefore, the consumer has a relatively low incentive to use them. Some proposed rebate card systems would allow several different merchants to subscribe to a system, which accumulates rebates from all of the merchants, thereby allowing accumulation of a sizeable amount. However, such systems have the disadvantage of not storing the accumulated rebates in an independent and secure institution. Therefore, they have the perception of being unreliable and may not be workable under current regulatory environments.

[00009] Nowhere does the prior art disclose a method of administering a rebate card wherein the total accumulated cash value of a consumer's rebates is stored in an omnibus trust account.

[00010] The above-noted disadvantages of the prior art are overcome by the present invention, which in one aspect is a method of administering a rebate system in which rebate-related information is electronically transmitted from a rebate issuing entity and is received by a central processing authority. The rebate-related information includes information identifying a consumer and information relating to a purchase made by the consumer from the rebate issuing entity. The central authority determines an amount of a rebate that is to be credited to the consumer, based on information previously provided by the rebate issuing entity. The rebate issuing entity is invoiced for the amount of the rebate, wherein the amount is payable to an omnibus trust account, wherein a trustee has exclusive control over the omnibus trust account and the trustee is authorized to transfer a credit from the omnibus trust account to the consumer.

[00011] In another aspect, the invention is a computer for administering a rebate system. The computer is programmed to accept information received electronically, including indicia of a consumer and indicia of a purchase made by the consumer from a rebate issuing entity. The computer determines an amount corresponding to a rebate based on the information accepted from the electronic card reader and on information previously provided by the rebate issuing entity. Then it generates a record of an invoice for transmittal to the rebate issuing entity that sets forth an amount payable by the rebate issuing entity corresponding to the rebate. Upon an indication that the rebate issuing entity has paid the amount, the computer generates a command to transfer the amount of the rebate to an omnibus trust account, wherein the omnibus trust account is held by a trustee for the benefit of the consumer. Then, upon an indication of a preselected criterion, the computer will generate an authorization that instructs the trustee to transfer a credit from the omnibus trust account to a receiving entity.

[00012] These and other aspects will become apparent from the following description of the preferred embodiment taken in conjunction with the following drawings, although variations and modifications may be effected without departing from the spirit and scope of the novel concepts of the disclosure.

[00016] A preferred embodiment of the invention is now described in detail. Referring to the drawings, like numbers indicate like parts throughout the views. As used in the description herein and throughout the claims that follow, the meaning of “a,” “an,” and “the” includes plural reference unless the context clearly dictates otherwise. Also, as used in the description herein and throughout the claims that follow, the meaning of “in” includes “in” and “on” unless the context clearly dictates otherwise.

[00017] As shown in FIG. 1, the invention 100 involves the interrelationship of several entities, including: at least one consumer 110, at least one merchant 120, or other rebate issuing entity (e.g., a shopping center, a mall, a manufacturer, a financial institution, etc.); a controlling authority 130 (such as a rebate program management company); a financial institution 140; and a charitable organization 150. The consumer 110 is issued a rebate card by the controlling authority 130 that entitles the consumer 110 to rebates from the merchant 120 on some or all of the consumer's 110 purchases. The merchant 120 is a subscriber to the controlling authority's 130 system, but pays the rebates to the financial institution 140. The financial institution 140 receives rebate funds from the merchant 120, which are allowed to accumulate and which the financial institution 140 subsequently pays to the consumer 110.

[00018] Because many different types of rebate issuing entities could employ the invention, it is understood that the invention does not merely support merchant-specific rebate plans, but allows for a variety of rebate plans. For example, a shopping mall could have a set rebate for all of the purchases made at every store at the mall. Similarly, an auto dealer could offer one rebate for purchases of new cars (e.g. 0.6%); another rebate for purchases of trucks (e.g. 0.9%); another for purchases of used cars (e.g. 2.0%); and still another rebate for parts and service (e.g. 5.0%).

[00019] In operation, the consumer 110 makes purchases from a subscribing merchant 120, who swipes 112 the consumer's 110 rebate cart through a card reader and issues a receipt documenting the rebate to the consumer 110. Generally, the merchant will provide the consumer 110 a receipt memorializing the transaction and entitlement to a rebate. Typically the card reader reads information from the card, including information identifying the consumer 110 and information relating to the purchase (e.g., information indicating the cash amount of purchase, the skew numbers of the goods being sold, the location of the sale, an identification of the department making the sale, etc.) and transfers the information to a central transaction accumulator, or other such electronic system. Periodically, the transaction accumulator reports 122 this rebate-related information, along with information regarding other rebates, to the controlling authority 130. The controlling authority 130 would be a central rebate transaction management organization that handles rebates from several different merchants.

[00020] The controlling authority 130 determines the amount of the rebate that is to be credited to the consumer 110 account, based on information previously provided by the merchant 120. Such information could include: a rebate that is to be applied to various goods; a graduated rebate that depends on the amount spent; a rebate that is to be applied to certain classes of goods; and any other scenario under which a rebate is to be applied to the purchase of goods. The controlling authority 130 will invoice 132 the merchant 120 for the amount of the rebate.

[00021] The merchant 120 then pays 124 the invoiced amount of the rebate to the financial institution 140, which then puts the amount in an omnibus trust account wherein a trustee has exclusive control over the trust account. If the payment is made by check, it is sent to a lock-box entity, which ensures that the check clears and that there are no charge-backs. Once the funds for the rebate have been received, they are transferred into the trust account. If the payment is made through an electronic funds transfer, then the funds are directly transferred into the trust account. For the sake of efficiency, an omnibus trust account is employed, thereby relieving the financial institution 140 from expending the overhead associated with maintaining individual accounts for each participating consumer 110. Upon receipt of the payment 124, the financial institution 140 reports 142 payment of the invoice to the controlling authority 130, or an accounting entity, which maintains a record of all rebates due each consumer 110.

[00022] Periodically, the controlling authority 130 will invoice 134 the trustee for the administrative fees incurred in running the program. The financial institution 140 will then pay 144 the administrative fees to the controlling authority 130. Also, the controlling authority 130 will periodically authorize 136 payment by the trustee of an accumulated rebate to the consumer 110, as well as payment of a portion of the accumulated rebate to a charitable organization 150 (if the consumer 110 so desires). If instructed to do so by the trustee, the financial institution 140 will determine the portion to be paid to the charitable organization 150 (based on the consumer's 110 instructions) and will pay 148 that amount to the charitable organization 150. The consumer 110 may be allowed to select which of several charitable organizations is to receive the portion of the accumulated rebate. Once paid, the financial institution 140 or the controlling authority 130 will issue a receipt for the charitable contribution, allowing the consumer 110 to claim a tax deduction. The financial institution 140 will then pay 146 the remainder of the accumulated rebate due to the consumer 110. The transfer to the consumer 110 could be in the form of, e.g., a draft for a cash amount or in the form of a savings bond.

[00023] As shown in FIG. 2, the invention may be implemented as a computer program 200, that includes the following operations: once the merchant swipes 202 the consumer's rebate card, the card reader transmits 204 the information about the sale to the controlling authority. The computer then accepts the information from the electronic card reader, or transaction accumulator, and calculates 206 the amount corresponding to a rebate based on the information accepted from the electronic card reader and on information previously provided by the merchant. The computer also generates a record of an invoice for transmittal to the merchant that sets forth an amount payable by the merchant corresponding to the rebate. The computer performs a test 208 to determine if the merchant has paid the rebate. If the merchant has not paid, then the computer waits until paid. If the merchant has paid, then the computer generates a command 210 to transfer the amount of the rebate to an omnibus trust account and generates a record of the transfer. The computer will also invoice 212 the trust account for administrative fees.

[00024] Periodically, or upon receiving an indication of other preselected criteria, the computer will deduct 214 the charitable contribution from the record of the consumers accumulated rebate and generate an instruction to the trustee to pay that amount to the charitable organization 216. A record of the transfer will be sent to the consumer, thereby providing the consumer with a mechanism for claiming a tax deduction for the rebate. The computer will then authorize 218 the trustee to disburse the accumulated rebate due the consumer, minus any administration fees and minus the amount of the charitable contribution.

[00025] If the computer is instructed to pay the rebate periodically, it will perform the following computer-executable operations: determine a current date; compare the current date to an anniversary date that is a preselected date (e.g., the consumer's birthday) plus a preselected period (e.g., yearly, monthly or quarterly) after the preselected date. If the current date is the same or after the anniversary date then the computer generates an indication that the preselected criterion has been met and the trustee will be instructed to pay out the rebate.

[00026] As shown in FIG. 3, when the controlling authority instructs the trustee to transfer a credit from the omnibus trust account to a receiving entity (e.g., the consumer or a charitable organization) the computer executes the following operations 300: perform a test 302 to determine if the consumer has indicated a desire to transfer a portion of the credit to a charitable organization. If the test 302 indicates the consumer desires to transfer a portion of the credit to a charitable organization, then the computer will perform the following computer-executable operations: look up an identification of the charitable organization 304; look up a fraction rebate corresponding to the portion to be transferred 306; calculate a charitable contribution amount to be transferred to the charitable organization so as to equal the accumulated rebate multiplied by the fraction 308; generate an authorization that instructs the trustee to transfer the charitable contribution amount to the charitable organization 310; calculate a consumer amount to be transferred to the consumer so as to equal the accumulated rebate minus the charitable contribution amount 312. If, on the other hand, the test 302 indicates the consumer does not desire to transfer a portion of the credit to a charitable organization, then the computer sets 314 the consumer amount equal to the accumulated rebate. The computer then calculates the credit 316 so as to equal the consumer amount minus an administration fee.

[00027] The microfiche appendix discloses a functional design for the database employed in one commercial embodiment of the invention. The disclosed design would operate as an ORACLE® database, which would typically run on a computer employing the WINDOWS-NT® operating system running on a PENTIUM®-based processor. It will be understood that the disclosed embodiment could employ any one of many combinations of database programs, operating systems and processors without departing from the scope of the invention.

[00028] The above described embodiments are given as an illustrative examples only. It will be readily appreciated that many deviations may be made from the specific embodiment disclosed in this specification without departing from the invention. Accordingly, the scope of the invention is to be determined by the claims below rather than being limited to the specifically described embodiment above.