Intellectual Property
Retailers have been using reward programs for years. The impact of global goods and services offered via the Internet increases the competition for consumer attention. As a result, consumers are becoming more demanding and expect loyalty incentives.
This is driving businesses to pursue more creative measures to differentiate themselves through innovative customer relationship management (CRM). Smart rewards programs have become the most convenient vehicle to establish continuity between the physical and virtual worlds.
Phoenix Technology loyalty patent claims cover the business process involved in the storage of any consumer incentive stored on a smart chip or device. Together with the end-to-end loyalty system, the patents provide a common platform for allocating and redeeming incentives, regardless of whether a sale is made online or at the local mall.
The patents are influential in accelerating the international trend for loyalty and payment integration on portable devices, including smart cards, laptops, personal digital assistants, cellular phones and other Internet appliances. The technology independent, business process patent is key to Phoenix Technology's end-to-end loyalty solution, designed to meet device evolution from current smart card technology to future generations of smart portable devices.
- U.S. Patent # 5,806,045 issued September 1998
- Australia Patent # 703349 issued October 1999
- Mexico Patent # 200007 issued November 2000
- Japan Patent # 3416141 issued April 2003
- Canada Patent # 2182596 issued in April 2004
In his book, Smart Cards 2010, recognized industry expert Jerry Svigals confirmed that loyalty on a smart card is a significant market driver. He writes:
“Payment transactions using loyalty-incentivized, smart chip devices will grow at an annual rate of 75% over the next five years, to over $1.4 trillion. The revenues from loyalty transaction processing, including servicing and licensing, will exceed $8 billion by 2010, growing from a current nominal base.”
Mr. Svigals has since revised his 2010 projection to $2 trillion in smart payment transactions and $12 billion in smart loyalty transactions.
Loyalty Patent Abstract
U.S. Patent No. 5,806,045
“Method and System for Allocating and Redeeming Incentive Credits between a Portable Device and a Base Device.”
A customer incentive system involving a plurality of service or merchandise providers comprises a customer-carried, portable device, a provider device, and a base device. To earn incentive credits, the customer enters into a transaction with one of the providers participating in the incentive system. A transaction amount is derived from the transaction and, based on this amount, an incentive credit amount is computed. The base device performs this computation by deriving an incentive code and cross-referencing this incentive code with all customer incentive codes stored on the customer-carried device and incentive program codes stored on the provider device to derive an incentive rate. This incentive rate is applied to the transaction amount to derive the incentive amount. The incentive amount is stored on the customer-carried device. To redeem the incentive credits stored on the customer-carried device, the customer enters into a second transaction with the same provider or another participating provider. A second transaction amount is derived from this transaction and the customer may choose to redeem some or all of the incentive credits stored on the customer-carried device to lower the transaction amount. When incentive credits are redeemed, they are subtracted from the incentive amount on the customer-carried device. By using a customer-carried device, transactions may be conducted off-line. Thus, no concurrent communications link with a central authority is needed.
