News Column

Patent Issued for Method and Apparatus for Processing Credit Card Transactions

May 8, 2014



By a News Reporter-Staff News Editor at Computer Weekly News -- Inventor Holdings, LLC (Stamford, CT) has been issued patent number 8706632, according to news reporting originating out of Alexandria, Virginia, by VerticalNews editors.

The patent's inventors are Walker, Jay S. (Ridgefield, CT); Mik, Magdalena (Greenwich, CT); Tulley, Stephen C. (Stamford, CT); Tedesco, Daniel E. (New Canaan, CT); Van Luchene, Andrew S. (Norwalk, CT).

This patent was filed on June 1, 2010 and was published online on April 22, 2014.

From the background information supplied by the inventors, news correspondents obtained the following quote: "Transactions between customers and merchants typically occur at a point-of-sale terminal located at the merchant's place of business. A transaction begins when a customer brings one or more products to the point-of-sale terminal. A sales attendant operating the point-of-sale terminal then totals the amount due for the products. The total typically includes the subtotal of the prices for each product purchased and, in some jurisdictions, a tax in addition to the subtotal amount. The resulting purchase amount is then paid by the customer, thus completing the transaction.

"Customers may typically pay for the purchase by presenting cash, a check, a credit card or a debit card at the merchant point-of-sale terminal. The amount of cash, the amount for which the check is drawn, or the available balance of funds within a financial account associated with the credit card or debit card typically must be sufficient to cover the purchase amount or the transaction can not be processed. When the transaction is paid for with a credit card or debit card, the sales attendant at the point-of-sale terminal must typically obtain an authorization for the charge from the card's issuing bank or from a clearinghouse.

"During this checkout time and continuing through the time the authorization is being processed, the customer is more receptive to the merchant at the point-of-sale while the transaction is completed. Realizing this, many merchants leverage this opportunity by providing so-called 'impulse items' at or near the point-of-sale. Such impulse items usually include high-margin, attractively-packaged goods such as magazines or candy. These items are strategically placed so that a customer may be induced to purchase such items at the last minute. Although such tactics have proven effective for some merchants, by utilizing a customer's checkout time to the merchant's full advantage, incremental sales and profits resulting therefrom could be realized.

"In addition, many retail establishments fail to take full advantage of their day-to-day interactions with customers by not actively seeking their customer's opinions regarding quality of service and/or products offered. This is not to say that merchants generally regard customer opinions as valueless. To the contrary, many merchants provide suggestion boxes, survey forms or the like within the merchant's establishment. For example, in a restaurant environment, a merchant may leave a survey form on a table in an attempt to ascertain a customer's opinion regarding a dining experience. However, such means for gathering data are susceptible to employee tampering and furthermore, provide no incentive for the customer to complete the survey.

"In the example provided, the survey form left on the table may easily be intercepted and discarded by a service personnel member who does not wish for the customer's opinion to be known by a manager. Similarly, a franchisee may neglect to inform a franchisor of negative customer perceptions regarding the franchisee. In light of such facts, many customers within the retail environment regard the means by which their opinion can be heard or addressed as inadequate. Additionally, many customers view such procedures as providing no immediate benefit or remedy. In short, customers are simply not motivated to fill out surveys or write out opinions regarding their perception of a retailer's performance. If retailers were able to more effectively gather information regarding customers' shopping experiences, retail store owners, managers and franchisors could more effectively address customer concerns, thereby ensuring higher rates of customer satisfaction and customer retention.

"In an attempt to increase sales as well as satisfy the demands that customers may have after making a purchase, many retailers offer supplementary product enhancements such as warranties. In many cases, the process whereby a customer is offered and/or sold a warranty is left up to sales attendants at the point-of-sale. Store owners and management personnel are often unaware of whether or not each customer who qualifies for such an enhancement is in fact being presented with its proposal. For example, a sales attendant may neglect to inform a customer of an available product enhancement, such as a warranty, parts sold separately, or other necessary replacement components currently on sale. By consistently offering every qualified customer a supplementary product enhancement or supplemental product which he may find necessary or desirable, retailers could effectively increment purchase totals and thus profits.

"As a proposed solution to the latter stated problem, U.S. patent application Ser. No. 08/994,426, entitled 'METHOD AND APPARATUS FOR PROVIDING SUPPLEMENTARY PRODUCT SALES TO A CUSTOMER AT A CUSTOMER TERMINAL' filed Dec. 19, 1997, discloses a system and method whereby a customer at a point-of-sale terminal is provided with one or more supplemental product offers. The supplemental product offer is transmitted from a central controller directly to a card authorization terminal and displayed to the customer at the customer terminal. During this process, the customer is prompted to enter an 'accept' or 'decline' signal in response to the supplemental product offer. This signal is then transmitted back to the central controller and the customer transaction is consummated accordingly.

"One immediate benefit of the invention disclosed in U.S. patent application Ser. No. 08/994,426 is the ability to effectively remove the sales attendant from the responsibility of providing the supplemental product offer. Although the disclosed invention can provide an effective means for providing supplementary product sale opportunities to customers in a retail environment, further advantages may be realized by processing a supplementary product sale through alternate methods.

"Therefore, a need exists for a transaction processing method and apparatus operable to allow retail organizations to more effectively leverage a customer's time and attention at the point-of-sale. By doing so, retailers as well as customers could realize added benefits beyond those obtained through conventional means."

Supplementing the background information on this patent, VerticalNews reporters also obtained the inventors' summary information for this patent: "It is an object of the present invention to provide a method and apparatus operable to process a credit card transaction in a manner which provides a customer the opportunity to receive one or more charge enhancement offers on a record of charge provided at a point-of-sale terminal. The charge enhancement offers may correspond to either a reduction or an increase in the customer purchase amount.

"According to an aspect of the present invention, a computer controlled by a clearinghouse receives from a merchant point-of-sale terminal a request for authorization of a purchase amount. The purchase amount is to be paid from a financial account (e.g. a credit card account) of a customer. The clearinghouse determines a 'charge enhancement' offer based on the received request. The offer may be determined from one or more factors including the transaction information input at the merchant point-of-sale terminal or the customer's credit history. The clearinghouse computer transmits an authorization for the transaction to the merchant point-of-sale terminal. The clearinghouse computer also transmits the charge enhancement offer to the merchant point-of-sale terminal, which in turn prints on a record of charge indicia representing the offer. In one embodiment, the customer may accept the charge enhancement offer by, for example, signing a separate signature line printed on the record of charge."

For the URL and additional information on this patent, see: Walker, Jay S.; Mik, Magdalena; Tulley, Stephen C.; Tedesco, Daniel E.; Van Luchene, Andrew S.. Method and Apparatus for Processing Credit Card Transactions. U.S. Patent Number 8706632, filed June 1, 2010, and published online on April 22, 2014. Patent URL: http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=27&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1350&f=G&l=50&co1=AND&d=PTXT&s1=20140422.PD.&OS=ISD/20140422&RS=ISD/20140422

Keywords for this news article include: Inventor Holdings LLC.

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Source: Computer Weekly News