United States Patent 1
`Nichtbergeret al.
`
`[11] Patent Number:
`[45] Date of Patent:
`
`4,882,675
`Nov. 21, 1989
`
`[54]
`
`[75]
`
`PAPERLESS SYSTEM FOR DISTRIBUTING,
`REDEEMING AND CLEARING
`MERCHANDISE COUPONS
`
`Inventors: Steven Nichtberger, New Rochelle;
`Kevin McGlynn, Yorktown Heights,
`both of N.Y.; Corey Snook,
`Huntington Beach, Calif.
`
`[73]
`
`Assignee:
`
`Steven Nichtberger, New Rochelle,
`N.Y.
`
`[21]
`
`[22]
`
`[51]
`
`[52]
`
`[58]
`
`[56]
`
`Appl. No.: 674,847
`Filed:
`Nov. 26, 1984
`
`Tint, C18 ...sscccscsesssersesee GO6F 7/04; GO6F 15/21;
`GO7F 7/00; GO7F 7/08
`WLS. Cle .ssscsescerssesessseseserneseserees 364/401; 364/479;
`235/381; 235/382; 235/493; 235/494;
`340/825.35
`Field of Search ...........cscseess 364/401, 478, 479;
`235/381, 382, 487, 493, 494; 340/825.35; 194/2,
`.
`4R
`
`References Cited
`
`U.S. PATENT DOCUMENTS
`
`3,959,624 5/1976 Kaslow .........-sesssssssessees 235/487 X
`4,124,109 11/1978 Bissell et all.
`.......sssssrsssoree 194/4R
`4,186,438
`1/1980 Bensonetal.
`.- 364/200
`4,247,759
`1/1981 Yuris etal....
`.- 235/381
`4,412,631 11/1983 Haker .......ccsscssscssssssesssesenseee 221/66
`4,449,186 5/1984 Kelly et al.
`...
`.- 364/401 X
`4,554,446 11/1985 Murphy etal.........sesso 235/487
`
`
`
`4,723,212 2/1988 Mindrum etal. ........ss0 364/401
`
`FOREIGN PATENT DOCUMENTS
`0001373
`3/1985 World Int. Prop. O.
`.
`
`OTHER PUBLICATIONS
`
`Sugarman, C. “A Scroll through the Futuremarket”,
`Washington Post, May 28, 1986, E1,4.
`
`Primary Examiner—Clark A. Jablon
`Attorney, Agent, or Firm—Darby & Darby
`
`ABSTRACT
`[57]
`Cents-off merchandise couponsare distributed and re-
`deemed immediately and electronically. An electronic
`display of coupons valid for use in a particular store is
`presented to customers in that store. When a customer
`makes a selection of coupons from thedisplay, the selec-
`tion is recorded. The customer is subsequently identi-
`fied at a store checkout station as the one who made the
`selection. In a preferred embodiment, the identification
`is made by scanning a special card adapted for use with
`the system. The items purchased in the store by the
`customer are recorded, and any matches between the
`coupons selected and the items purchased are deter-
`mined electronically. The customer is immediately
`credited in accordance with the terms of the matched
`coupons. Redeemed coupons are periodically cleared
`electronically.
`
`25 Claims, 39 Drawing Sheets
`
`
`
`IMAGE CAPTURE
`SYSTEM
`
`LOCAL COA
`UNIT
`
`
`
`
`AUTOMATED UPC
`SCANNING CHECKQUT
`SYSTEM
`
`SCANNING CHECKOUT
`SYSTEM
`
`
` AUTOMATED UPC
`
`
`eee meee wesc ewerenesses
`bnewecmeeeenweneremeed
`LOCATED AT EACH STORE
`1
`LOCATED AT EACH STORE!
`
`LOCATED AT EACH STORE
`(bce wwmmanenenancenun
`
`PROVI-1023 - Page 1
`
`PROVI-1023 - Page 1
`
`

`

`U.S. Patent
`
`Sheet 1 of 39
`Nov.21, 1989
`’‘t$4t4ttt441'a‘i‘'’t'144'44at4a'L
`
`4,882,675
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`PROVI-1023 - Page 2
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`PROVI-1023 - Page 2
`
`
`
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`
`
`
`
`
`
`
`
`
`

`

`US. Patent
`
`Nov.21, 1989
`
`Sheet 2 of 39
`
`4,882,675
`
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`PROVI-1023 - Page 3
`
`PROVI-1023 - Page 3
`
`
`
`
`
`
`
`
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 30f39 4,882,675
`
`
`
`COUPON + AD
`TMAGE
`
`CAPTURE
`
`FIG. 3
`
`PROVI-1023 - Page 4
`
`PROVI-1023 - Page 4
`
`

`

`US. Patent
`
`c99989
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`Nov.21, 1989
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`Sheet 4 of 39
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`
`PROVI-1023 - Page 5
`
`PROVI-1023 - Page 5
`
`
`
`
`
`
`

`

`U.S. Patent
`
`Nov.21, 1989
`
`Sheet 5 of 39
`
`4,882,675
`
`BTHALSASINOYOSHD
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`PROVI-1023 - Page 6
`
`PROVI-1023 - Page 6
`
`
`
`
`
`
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 6 of 39 4,882,675
`
`
`
` t
`
`MANUAL
`|
`PROCESS
`ee eee
`
`420 FIGURE
`
`CONNECTOR
`
`122
`
`PROVI-1023 - Page 7
`
`PROVI-1023 - Page 7
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 70f39 4,882,675
`
`
`
`OPERATIONAL?
`
`DIAGNOSTIC
`
`ROUTINES
`
`:
`
`no.
`
`mens
`
`~WAINTENANCE
`STATUS FILE
`(MEMORY)
`
`ATTEMPT 10
`REPOAT STATUS
`TO HOST
`
`RECORD
`RESULTS
`
`SYSTEM
`
`9
`
`FIG. 7
`
`PROVI-1023 - Page 8
`
`PROVI-1023 - Page 8
`
`

`

`US. Patent Nov.21, 1989
`
`Sheet 80f39
`
`4,882,675
`
`440
`
`142
`
`{4d
`
`146
`
`OPERATIONAL
`
`PROGRAM
`
`LOAD
`
`OA
`
`PARAMETER
`FILE
`
`
`
`REVIEW EACH
`
`|
`ENTRYON FILE
`
`COUPONS AND ADS
`
`
`
`
`
`PARAMETER FILE
`
`2
`
`150
`
`APPROPRIATE
`
`FILES
`
`PARAMETER
`FILE
`
`DELETE
`CORRESPONDING
`IMAGE, TEXT
`AND SPEECH
`FILES
`
`DELETE
`STALE ENTRY
`
`158
`
`FIG.
`
`8
`
`PROVI-1023 - Page 9
`
`PROVI-1023 - Page 9
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 90f39 4,882,675
`
`
`
`158
`
`{62
`
`460
`
`RECORD ON FILE
`
`EVIEW EACH
`
`R
`
`472
`
`|
`464
`
`
`
`DELETE THAT
`|
`SELECTION FROM no/SPAM
`
`
`
`(pelrariON,
`TRANSACTION
`
`
`RECORD
`Ne
`YES
`
`
`
`syTONHOM
`{78etAS NO
`TRANS
`FLAG ON?
`
`
`
`
`
`
`ES
`
`REDEMPTION
`
`466
`
`470
`
`
`DELETE THAT
`ENTIA
`
`TRANSACTION
`RECORD
`
`
`NO/
`
`DATE IN
`TRANSACTION
`NUMBEA LESS
`THAN 7 DAYS
`AGO?
`
`YES
`
`474
`
`FIG. 9
`
`PROVI-1023 - Page 10
`
`PROVI-1023 - Page 10
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 10 0f 39 4,882,675.
`
`
`
`174
`
`462
`
`476
`
`REGRGANIZE
`~ FILES + INDEX
`TO MINIMIZE
`
`INDICATOR \
`SEARCH TIME
`
`PARAMETER
`FILE
`
`LOAD
`PROMOTION
`
`
`
`
` MODIFY “INSERT
`CARD" PROMPT 10 ves/PROMOTION
`
`
`
`INDICATOR
`INCLUDE LIST OF
`
`OTHER VALID
`ON?
`CAAD TYPES
`
`
`190
`
`146
`
`PARANETER
`
`186
`
`188
`
`
`NO
`ADVERTISEMENTS
`
`LOAD PARAMETERS
`FOR TODAY'S
`
`494
`
`FIG.
`
`10
`
`~ PROVI-1023 - Page 11
`
`PROVI-1023 - Page 11
`
`

`

`Sheet 11 0f39
`4,882,675
`U.S. Patent—Nov. 21, 1989
`494
`
`
`PERFORM THE
`
`FOLLOWING STEPS
`FOR EACH AD
`
`
`SCREEN AND THEN
`KEEP REPEATING
`
`196
`
`202
`
`204
`
`ADVERTISEMENT
`
`IMAGE
`
` LOAD
`
`ADVERTISEMENT
`GRAPHTOS
`
`_
`
`206
`
`
`
`LOAD AND
`OVERLAY
`TEXT
`
`ADVERTISEMENT
`TEXT
`OVERLAY
`FILE
`
`ADVERTISEMENT
`SPEECH
`DATA FILE
`
`el4
`
`FIG.
`
`11
`
`PROVI-1023 - Page 12
`
`PROVI-1023 - Page 12
`
`

`

`US. Patent
`
`Noy.21, 1989
`
`Sheet 12 of39
`
`4,882,675
`
`ADVERTISEMENTS
`
`"INSERT CARD"
`PROMPTS
`
`
`
`2l4 DISPLAY
`
` ETURN CARD
` DETERMINE
`
`
`222
`
`AND DISPLAY
`"INSERT AGAIN"
`
`TO FIG. 44
`
`TO FIG. 12
`
`FORMAT OF
`CARD
`
`FIG.
`
`12
`
`PROVI-1023 - Page 13
`
`PROVI-1023 - Page 13
`
`

`

`US. Patent
`
`Nov.21, 1989
`
`Sheet 13 0f39
`
`4,882,675
`
`228
`
`
`
`PROMOTION OFF:
`SPECIAL CARD"
`PROHPT
`
`FORMAT?
`
`YES
`
`SPECIAL EDIT
`ROUTINE
`
`UW)
`TO FIG. 42
`
`PERFORM MODULUS
`VERIFICATION OF
`CARD NUMBER
`
`.
`
`Uy)
`
` 232
`TO FIG. 24
`
`PROMPT
`
`DISPLAY
`"INVALID CARD®
`
`NO/
`
`
`
`CARD NUMBER
`VALID?
`
`YES
`
`TO FIG. 12
`
`
`
`COMPARE TODAY'S
`DATE 10 CARO'S
`
`EXPIRATION
`
`248
`
`FIG.
`
`413
`
`246
`
`PROVI-1023 - Page 14
`
`PROVI-1023 - Page 14
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 14 0f39 4,882,675
`
`
`
`248
`
`202
`
` DISPLAY
`
`CARD
`EXPIRED?
`
`“EXPIRED CARD"
`
`PROMPT
`
`
`
`
`
`
`TO FIG. {2
`
`COMPARE TODAY'S
`DATE TO CARD'S
`TINE PERIOD
`LAST USED
`
`206
`
`CARD UNUSED
`DURING CURRENT
`TIME PERIOD?
`
`
`DISPLAY
`
`
`“MUST WAIT TO
`NEXT TIME
`
`
`PERIOD"
`
`
`PROMPT
`
`
`
`TO FIG. 42
`
`DISPLAY
`COUPON
`SELECTION
`INSTRUCTIONS
`
`
`
`FIG.
`
`14
`
`PROVI-1023 - Page 15
`
`PROVI-1023 - Page 15
`
`

`

`US. Patent
`
`Nov. 21, 1989
`
`Sheet 150f39
`
`4,882,675
`
`TRANSACTION
`
`(NEXT SESSION
`NUMBER)
`
`446
`
`446
`
`COMPARE DATE +
`
`SESSION NUMBER
` PARAMETER
`FILE
`
`SPECTAL
`COUPON
`WINNER?
`TO FIG. 22
`
`264
`
` ASSIGN
`
`
`
`
`
`COUPONS
`
`PARAMETER
`~
`FILE
`
`
`
`LOAD PARAMETERS
`FOR TODAY'S
`
`PROVI-1023 - Page 16
`
`PROVI-1023 - Page 16
`
`

`

`
`
`US.Patent—Nov. 21, 1989 Sheet 16 of 39 4,882,675
`
`
`
`280
`
`282
`
`eon STEPS
`FOR EACH coLPONxF|SCREEN J
`
`TODAY'S SET
`
` 290
`292
`FILE
`
`COUPON
`
`COUPON
`TEXT
`OVERLAY
`
`LOAD
`COUPONS
`
`LOAD AND
`OVERLAY
`TEXT
`
`300
`
`FIG.
`
`16
`
`PROVI-1023 - Page 17
`
`PROVI-1023 - Page 17
`
`

`

`US. Patent
`
`Nov. 21, 1989
`
`Sheet 17 0f39
`
`4,882,675
`
`300
`
`
`PARAMETER
`
`FILE
`
`
`
`DETERMINE # OF
`REMAINING
`
`COUPONS TO BE
`ISSUED FOR EACH
`
`
`
`309
`
`306
`
`BLANK QUT THAT
`Cour NO/REMAINING
`
`SCREEN DISPLAY
`AND PREVENT
`NUMBER > 0?
`ITS SELECTION
`
`146
`
`
`
`
`
`
`
`
`
`DISPLAY COUPON
`SCREENS AND
`"MAKE SELECTION*
`PROMPTS
`
`ct one
`COUPON FROM
`EACH SCREEN
`
`|
`i
`
`EQUATE LOCATION
`TOUCHED ON
`SCREEN TO
`COUPON SELECTED
`
`
`
`
`PROVI-1023 - Page 18
`
`PROVI-1023 - Page 18
`
`

`

`US. Patent
`
`Nov. 21, 1989
`
`Sheet 18 0f 39
`
`4,882,675
`
`318
`
`312
`
`
`
`DISPLAY
`REPEAT
`SELECTION®
`
`PROMPT
`
`VALTD
`COUPON
`SELECTION?
`
`RECORD COUPON
`NUMBER UNDER
`TRANSACTION
`
`TO FIG. 16
`
`
`
`NUMBER To FIG. 47
`
`
`SELECTED PARAMETER
`
`6
`
`DECREMENT
`
`COUNTERS FOR
`
`EACH COUPON
`
`FILE
`
`FIG.
`
`18
`
`PROVI-1023 - Page 19
`
`PROVI-1023 - Page 19
`
`

`

`
`
`US. Patent—Nov.21, 1989 ‘Sheet 19 of39 4,882,675.
`
`
`
`328
`
`330
`
`PARAKETER
`
`|
`
`LOAD NECESSARY
`DATA FOR EACH
`COUPON SELECTED
`
`146
`
`162
`
`RECORD TO FILE
`
`SELECTION
`
`SELECTION SELECTION
`
`TAKE COUPON
`REMINDER
`
`|
`
`PRINT COUPON
`
`REMINDER
`AND DISPENSE
`
`
`UPDATE
`SPECIAL CARD
`NITH DATE
`
`NEXT VALID
`
`340
`
`YES
`
`
`
`SPECIAL
`CAAD USED?
`
`
`NO
`
`,
`
`FIG.
`
`419
`
`PROVI-1023 - Page 20
`
`PROVI-1023 - Page 20
`
`

`

`US. Patent
`
`eve
`
`Nov.21, 1989
`
`Sheet 20 of 39
`
`oAISNOTATHd
`
`idOud
`
`
`HBGRNNCHDLaw
`“liv;aes
`§.HaNss!
`oeeery.
`S/OTASUdeG
`
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`
`SNTSTAUSA0V
`
`4,882,675
`
`yh“S04ol2h“SIdOl1vatsot(3)
`
`be914Oc91a
`
`PROVI-1023 - Page 21
`
`PROVI-1023 - Page 21
`
`
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 21 of 39 4,882,675
`
`
`
`146
`
`358
`
`|
`PARAVETER
`
`SPECTAL
`COUPON
`IMAGE
`FILE
`
`SPECTAL
`COUPON
`
`SPECIAL
`
`N
`
`LOAD
`SPECIAL COUPON
`
`PARAMETERS
`
`LOAD
`SPECIAL COUPON
`GRAPHICS
`
`.
`
`PROVI-1023 - Page 22
`
`PROVI-1023 - Page 22
`
`

`

`US. Patent
`
`Nov. 21,1989
`
`Sheet 22 of 39
`
`4,882,675
`
`374
`
`376
`
`
`
`DISPLAY
`
`SPECTAL
`COUPON
`
`380
`
`378
`
`SPECTAL
`
`
`WRITE
`
`SPECIAL COUPON
`WINNER: RECORD
`TO FILE
`
`
`
`
`
`
`wees onaasneee
`
`PRINT
`
`SPECIAL COUPON
`AND DISPENSE
`
`382
`
`366
`
`
`SPECIAL
`CARD
`
`PROVI-1023 - Page 23
`
`PROVI-1023 - Page 23
`
`

`

`
`
`US. Patent—Nov. 21,1989 Sheet 23 of 39 4,882,675
`
`
`
`388
`
`CARD
`
`REMOVE
`
`TO FI6. 44
`
`FIG. 24
`
`PROVI-1023 - Page 24
`
`PROVI-1023 - Page 24
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 24 0f 39 4,882,675
`
`
`
`RECEIVE
`REQUEST FAOM
`CHECKOUT SYSTEM
`FOR SELECTION
`DATA
`
`462
`
`396
`
`400
`
`402
`
`
`
`SEARCH
`
`FILE FOR
`TRANSACTION
`
`a
`FILE
`
`RETURN
`"RECORD NOT
`FOUND" HESSAGE
`
`No
`
`462
`
`YES
`
`406
`
`FILE
`
`FLA6_AECORD
`USE
`AS IN
`
`COUPON
`SELECTION
`
`410
`
`FIG. 25
`
`PROVI-1023 - Page 25
`
`PROVI-1023 - Page 25
`
`

`

`4f2
`
`
`
`
`
`
`
`RECEIVE
`REDEMPTION
`RECORD FROK
`CHECKOUT SYSTEM
`
`US. Patent
`
`Nov. 21, 1989
`
`|
`
`Sheet 25 0f39
`
`4,882,675
`
`410
`
`RETURN
`TRANSACTION
`RECORD
`
`RECEIVE
`CONFIRMATION OF
`RECEIPT
`QR RETRANSMIT
`
`Al4
`
`446
`
`
`
`420
`
`448
`
`FIG. 26
`
`PROVI-1023 - Page 26
`
`PROVI-1023 - Page 26
`
`

`

`US. Patent
`
`Nov. 21,1989
`
`Sheet 26 of39
`
`4,882,675
`
`4e2
`
`424
`
`
`
`
`
` COUPON
`
`SELECTION
`FILE
`
`SEND
`CONFTAMATION
`OF RECEIPT
`
`FLAG
`SELECTIONS
`REDEEHED
`
`426
`
`430
`
`
`REMOVE
` COUPON
`
`FLAG FROM
`SELECTION
`
`TRANSACTION
`FILE
`
`RECORD
`
`
`
`SYSTEM
`
`434
`
`RECEIVE
`REQUEST FOR
`
`REDEMPTION DATA
`
`FROM HOST
`
`
`
`FIG.
`
`2/7
`
`PROVI-1023 - Page 27
`
`PROVI-1023 - Page 27
`
`

`

`U.S. Patent
`
`Nov. 21, 1989
`
`Sheet 27 of 39
`
`4,882,675
`
`134
`
`MAINTENANCE
`
`STATUS
`
`436
`
`438
`
`RESPOND
`WITH
`MAINTENANCE
`
`STATUS
` RECEIVE
`
`CONFIRMATION
`OF RECEIPT
`OR RETRANSMIT
`
`420
`
`
`
`COUPON
`REDEMPTION
`PILE
`
`444
`
`448
`
`MARK
`END OF FILE
`
` TRANSMIT
`
`DATA 10
`HOST
`(WITH CONTROLS)
`
`PROVI-1023 - Page 28
`
`PROVI-1023 - Page 28
`
`

`

`U.S. Patent
`
`Nov. 21, 1989
`
`Sheet 28 of 39
`
`4,882,675
`
`450
`
`CONFIRMATION
`OF RECEIPT
`
`420
`
` RECETVE
`OR RETRANSMIT
`
` DELETE
`RECORDSBEFORE
`
` RECEIVE
`REPEAT FOR EACH
`
`RECEIVE
`INFORMATION
`
`ON NEW FILE 10
`BE TRANSFERRED
`
`WARKER AND
`
`INSTRUCTION TO
`RECEIVE NEW
`FILES AND
`
`FROM HOST
`
`FIG.
`
`2g
`
`PROVI-1023 - Page 29
`
`PROVI-1023 - Page 29
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 29 of 39 4,882,675
`
`
`
`468
`
`UNCOMPACT
`DATA
`
`YES
`
`APPROPATATE
`FILE
`
`460
`
`RECEIVE
`NEW FILE
`
`464
`
`NO
`
`466
`
` WRITE
`TO DISK
`
`472
`
`SEND
`CONFIRMATION
`OF RECEIPT
`
` 462
`
` 470
`
`
`
`
`FIG. 30
`
`PROVI-1023 - Page 30
`
`PROVI-1023 - Page 30
`
`

`

`474
`
`
`
`
` UPDATE
`PARAMETER
`
`FILE pS RECEIVED?
`
`
`
`US. Patent—Nov.21, 1989 Sheet 30 0f 39 4,882,675
`
`
`
`476
`
`NES
`
`~
`
`FINAL
`SEGHENT
`
`TO FIG. 29
`
`FIG. 31
`
`PROVI-1023 - Page 31
`
`PROVI-1023 - Page 31
`
`

`

`4,882,675
`U.S. Patent—Nov. 21, 1989
`Sheet 31 of 39
`
`FILE
`
`ORD NOT
`FOUND" MESSAGE
`
`COUPON
`SELECTION
`
`162
`
`RECEIVE
`REQUEST FROM
`CHECKOUT SYSTEM
`FOR SELECTION
`DATA
`
`RECORD
`
`SEARCH
`FILE FOR
`SELECTION
`
`482
`
`484
`
`486
`
`NO
`
`YES
`
`490
`
`FLAS RECORD
`ASIN USE
`
`|
`
`492
`
`FIG. 32
`
`PROVI-1023 - Page 32
`
`PROVI-1023 - Page 32
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 32 of 39 4,882,675
`
`
`
`146
`
`492
`
`494
`
` CHECK
`
`PARAMETER FILE
`PARAMETER
`
`FOR PURCHASE
`FILE
`
`DATA CAPTURE
`INDICATOR
`
`
`500
`
`
`FLAG SELECTION
`RECORD FOR
`
`FULL PURCHASE°
`DATA CAPTURE
`
`.
`
`496
`
`INDICATOR
`
`ON?
`
`
`
`
`498
`
`502
`
`RECEIVE
`CONFIRMATION OF
`
`OA RETRANSMIT
`
`FIG. 33
`
`PROVI-1023 - Page 33
`
`PROVI-1023 - Page 33
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 33 0f 39 4,882,675
`
`
`
`506
` RECEIVE
`
`504
`
`REDEMPTION
`RECORD FROM
`CHECKOUT SYSTEM
`
`508
`
`420
`
`
`COUPON
`
`REDEMPTION
`
`FILE
`
`ADD
`TO FILE
`
`510
`
`FULL
`PURCHASE DATA
`
`
`APPENDED?
`
`
`PURCHASE
`Pie
`
`
`10 FIG. 35
`
`516
`
`518
`
`ADD 10
`
`PURCHASE FILE
`
`FIG. 34
`
`PROVI-1023 - Page 34
`
`PROVI-1023 - Page 34
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 34 of 39 4,882,675
`
`
`
`520
`
`
`SEND
`CONFIRMATION
`OF RECEIPT
`
`FLAG
`SELECTIONS
`REDEEMED
`
`162
`
`462
`
`
`COUPON
`
`SELECTON
`
`FILE
`
`
`
`
`RECEIVE
`
`REQUEST FOR
`REDEMPTION DATA
`FROM HOST
`
`FIG. 35
`
`PROVI-1023 - Page 35
`
`PROVI-1023 - Page 35
`
`

`

`US. Patent
`
`Nov. 21, 1989
`
`Sheet 35 of 39
`
`434
`
`420
`
`420
`
`
`
`WATENCE
`
`TATUS
`FILE
`
`528
`
`
`
`
`RESPOND
`NITH
`MAINTENANCE
`STATUS
`
`
`RECETVE
`
`CONFIRMATION
`OF RECEIPT
`
`OR RETRANSHIT
`
`COUPON
`REDEMPTION
`FILE
`
`"MARK
`END OF FILE-
`
`
`
`(WITH CONTROLS)
`
`TRANSMIT
`DATA TO
`HOST
`
`530
`
`532
`
`534
`
`536
`
`PROVI-1023 - Page 36
`
`PROVI-1023 - Page 36
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 36 of 39 4,882,675
`
`
`
`538
`
`RECEIVE
`CONFIMATION
`OF RECEIPT
`OR RETRANSMIT
`
`420
`
`542
`
` DELETE
`HARKER AND
`RECORDS BEFORE
`IT
`
`544
`
`540
`
`
`
`
` RECEIVE
`REQUEST FOR
`PURCHASE DATA
`FROM HOST
`SYSTEM
`
`
`
`
`516
`
`546
`
`MARK
`END OF FILE
`
`FIG. 37
`
`PROVI-1023 - Page 37
`
`PROVI-1023 - Page 37
`
`

`

`US. Patent
`
`Nov. 21, 1989
`
`Sheet 37 0f 39
`
`4,882,675
`
`PURCHASE
`FILE
`
`548
`
`TRANSMIT
`DATA 10
`HOST
`(WITH CONTROLS)
`
`RECEIVE
`CONFIRMATION -
`OF RECEIPT
`
`516
`
`
`
`OA RETRANSMIT
`
`
`
`316
`
`
`DELETE
`MARKER AND
` PURCHASE
`RECORDSBEFORE
`FILE
`
`
`
` RECEIVE
`INSTRUCTION TO
`RECEIVE NEW
`FILES AND
`REPEAT FOR EACH
`
`
`
`558
`
`FIG. 38
`
`PROVI-1023 - Page 38
`
`PROVI-1023 - Page 38
`
`

`

`
`
`US. Patent—Nov.21, 1989 Sheet 38 of 39 4,882,675
`
`
`
`558
`
`660
`
`RECETVE
`INFORMATION
`ON NEW FILE TO
`BE TRANSFERRED
`FROM HOST
`
`RECEIVE.
`NEW FILE
`
`562
`
`564
`
`570
`
`UNCOMPACT
`DATA
`
`568
`
`566
`
`
`
`
`
`
`APPROPATATE
`FILE
`
`FIG. 39
`
`PROVI-1023 - Page 39
`
`PROVI-1023 - Page 39
`
`

`

`
`
`US. Patent—Nov. 21, 1989 Sheet 39 of 39 4,882,675
`
`
`
`572
`
`574
`
`
`
`
`
`SEND
`CONFIRMATION
`OF RECEIPT
`
`576
`
`
`
`FINAL
`SEGHENT
`RECEIVED?
`
`
`
`UPDATE
`PARAMETER
`FILE
`
`YES
`
`PROVI-1023 - Page 40
`
`PROVI-1023 - Page 40
`
`

`

`1
`
`4,882,675
`
`PAPERLESS SYSTEM FOR DISTRIBUTING,
`REDEEMING AND CLEARING MERCHANDISE
`COUPONS
`
`This invention relates to the distribution, redemption
`and clearing of coupons andthelike. More particularly,
`the invention relates to a highly-effective and efficient
`method and apparatus whereby coupons (suchas cents-
`off merchandise coupons) can be distributed, redeemed
`and cleared electronically.
`BACKGROUND OF THE INVENTION
`
`Coupons are an important marketing tool for many
`consumer goodsandservices including, but not limited
`to, products sold in supermarkets, drugstores and hard-
`warestores. “Couponing” constitutes a substantial busi-
`ness per se and makes an even greater contribution to
`gross national product by its stimulation of sales of
`promoted goodsandservices.
`Most couponsoffer “cents off’ the purchase price of
`promoted merchandise. There are at present seven
`major conventional channels plus a few relatively new
`systems employing mechanized devices for the distribu-
`tion of cents-off merchandise coupons.
`The most widely used and fastest growing conven-
`tional channel is the Sunday newspaper free-standing
`insert (FSI), which accounted for 33% ofall coupons
`distributed in the U.S. during 1983.
`Althoughthis means ofdistribution offers widespread
`exposure, many of the individuals exposed are not im-
`mediately in the market for the promoted merchandise,
`and the redemption rate typically runs a mere 4.6%, so
`that by far most of the coupons printed and distributed
`at considerable cost are effectively wasted. In addition,
`about 20% of the redemptions are not in accordance
`with the terms of the coupons. Such misredemptions or
`fraudulent redemptions may be accidental or intentional
`on the part of the customer and with or without the
`connivanceoftheretailer. In some cases theretailer or
`personnel employed by the retailer may clip coupons
`from a newspaperand “redeem” them for personal gain.
`The cost of misredemptions in the U.S. in 1983 was
`approximately $350 million. Finally, the retailer’s cost
`of shipping and handling each coupon currently aver-
`ages an estimated $0.078. This expense is in addition to
`the costs paid to and borne by other businesses involved
`in the distribution-redemption and clearing cycle. One
`such additional cost, which is borne by the coupon
`issuer, is for making test counts of coupons returned to
`the issuer by the clearinghouse. This cost amounts to
`about $0.02 per coupon redeemed andcleared.
`This channel of distribution is characterized by the
`further problem that there is no control, other than the
`coupon expiration date, which is typically a fairly re-
`mote future date, over the timing of coupon redemp-
`tions. It sometimes happens that coupon redemptions
`exceed projections, resulting in excessive coupon ex-
`pense. Once the couponsare issued, thereis little that
`can be done to protect against this expense,
`Another problem characteristic of this channel of
`distribution is lack of exclusivity. While a particular FSI
`may offer exclusivity (for example, soap coupons lim-
`ited to one brand or one manufacturer’s brands), other
`FSIs in the same newspaper may include competing
`coupons.
`,
`Still another problem ofthis channel ofdistribution is
`“double couponing”, which is a practice of retailers of
`
`20
`
`25
`
`35
`
`40
`
`45
`
`50
`
`60
`
`65
`
`2
`giving double (or someother multiple) of the face value
`of a cqgupon. The practice of double couponing is an
`effective marketing tool until all stores in an area double
`coupon. At that point the competitive advantage is lost
`and the practice becomes a problem for the retailer.
`Double couponing costs an estimated 0.66% of super-
`market sales, which is clearly a serious matter in this
`- industry, which reports profits of only about 0.85% of
`sales.
`A second mass-media distribution channel for cents-
`off merchandise couponsis a single offer in a manufac-
`turer’s advertisement in a newspaper. This channel ac-
`counted for 23% of couponsdistributed in 1983.
`A third such channel is multiple newspaperoffers in
`a co-op format, which accounted for 15% of coupons
`distributed in 1983.
`A fourth such channel is magazine coupons (notin-
`cluding pop-out type), which accounted for 13% of
`couponsdistributed in 1983.
`A fifth such channel is newspaper couponsprinted in
`the body of the paper, which accounted for 6% of cou-
`pons distributed in 1983.
`The redemption rate for each of the second through
`fifth channels listed above is less than 4.6%, and the
`drawbacks of each (misredemptions, expense, lack of
`control, lack of exclusivity, double couponing,etc.) are
`as substantial as those described above in connection
`with the Sunday newspaperfree-standing insert.
`Another conventional channel of coupondistribution
`is direct mail, which accounted for 3.8% of coupons
`distributed in 1983. The redemption rate for this chan-
`nel is 9.3%, which is higher than therates for any of the
`channels discussed previously, but, as compared to
`those channels, the cost of redemption and exposure to
`fraud are as great, the distribution cost is far greater,
`and the other drawbacks are comparable.
`In-package and on-package coupons accounted for
`6.2% ofall coupons distributed in the U.S. during 1983.
`The redemption rate ranges from 12.7% to 18.1%, de-
`pending on the location of the coupon. This is higher
`than for direct mail, but the shortcomings (misredemp-
`tions, expense, etc.) are similar to those described
`above.
`Recently, in-store coupon distribution systems em-
`ploying mechanical devices have been developed. In
`these systems, a plastic card (such as a credit or debit
`card) with a magnetic stripe or UPC codeis required to
`initiate the coupon selection process. The selected cou-
`pons are physically issued to the customer in-store and
`redeemed by the customer at a checkoutstation after
`completion of shopping. While the coupon redemption
`tates for these systems are far higher than for any previ-
`ous system, misredemptions and the cost of redemp-
`tions, clearing and test counting are problems which the
`conventional mechanized distribution systems do not
`solve.
`Moreover, the current system of clearing coupons —
`whichare distributed and redeemed in accordance with
`any of the methods described above involves physically
`sending redeemed coupons to a clearing house. The
`clearing house returns the couponsto the manufacturer
`(issuer) and issues debits and credits to the manufacturer
`and retailer, or factors coupons for the retailer. This
`physical handling of coupons is expensive, cumber-
`some, error prone andslow.
`
`PROVI-1023 - Page 41
`
`PROVI-1023 - Page 41
`
`

`

`3
`
`4,882,675
`
`OBJECTS OF THE INVENTION
`
`Anobject of the inventionis to alleviate the problems
`of conventional coupon distribution, redemption and
`clearing systems outlined above and, in particular, to
`provide such a system whereby redemption rates are
`increased, the cost of coupon distribution, redemption
`and clearing is reduced, and fraudulent redemptions of
`the type that are characteristic of conventional coupon
`distribution and redemption systems are eliminated.
`Otherobjects of the inventionare to provide a system
`which (a) enables close control over the number and
`timing of coupon redemptions, (b) makes it possible for
`a coupon issuer to obtain exclusivity for the issuer’s
`coupons, and (c) eliminates the problem of double cou-
`poning.
`Still other objects of the invention include, but are
`notlimited to, the following:
`to provide a system in which a customerselects cou-
`pons at homeor upon entering a particular store and
`redeems the coupons upon completion of shopping in
`that store or later, but within the period of validity of
`the coupon;
`to provide a system wherein couponselections by a
`customer who has properly identified himself are re-
`corded electronically, are later matched electronically
`with the customer’s purchases, and are electronically
`credited against the customer’s bill and entered in the
`store’s accounting system and in a central system that
`advises and bills the manufacturer;
`to provide a coupon distribution and redemption
`system which is compatible with, or integrated into, an
`electronic cash register system or an automated check-
`out (UPC code scanning) system;
`to provide a coupon distribution and redemption
`system which can identify users of the system before
`they make coupon selections and offer different cou-
`pons to different users of the system on the basis of
`already-obtained demographic data about the users.
`A coupon distribution and redemption system ac-
`cording to the invention is characterized by increased
`impulse sales to new product users, and increased re-
`tailer willingness to aggressively merchandise products
`promoted by the system, since use of the system by the
`retailer is a source of profit in addition to the profit
`madeonthesales of the merchandise; complete control
`of coupondistribution and substantial control of coupon
`redemption, including control of the quantity of cou-
`pons distributed per period of time and perlocation, and
`control of the time period, quantity and location of
`redemption; controlled market-by-market consumer
`awareness programs, including FSI advertising of cou-
`pons offered; avoidance of stockouts on heavily pro-
`moted items; and avoidance of the need to change the
`prices on promoted products.
`SUMMARY OF THE INVENTION
`
`The foregoing and other objects are achieved in ac-
`cordance with the invention by providing apparatus for
`distributing and redeeming couponsandthe like. The
`apparatus comprises display, selection and recording
`means for presenting to a customer a display of cou-
`pons, for enabling the customer to make a selection of
`couponsfrom the display, and for recording the selec-
`tion.
`Identification and checkout means is provide for
`identifying the customer at a store checkout station as
`
`4
`the one who madetheselection and for recording items
`purchased in the store by the customer.
`Matching and crediting means is provided for deter-
`mining any matches between the couponsselected and
`the items purchased and for crediting the customer in
`accordance with the terms of the matched coupons.
`A central processing unit responsive to the matches
`debits the coupon issuing entity and credits the store
`with respect to the matched coupons.
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`FIG.1 is a block diagram of the overall system ac-
`cording to the invention;
`FIG.2 is a flowchart showing the protocol in accor-
`dance with which special cards preferably used in ac-
`cordance with the invention in lieu of selected magnetic
`stripe cards are issued;
`FIG.3 is a flowchart showing coupon and advertise-
`ment image capture and distribution in accordance with
`the invention;
`FIG. 4 is a flowchart illustrating coupon selection
`and redemption in accordance with the invention;
`FIG.5 is a block diagram of a local coupon distribu-
`tion and redemption (CDR) unit constructed in accor-
`dance with the invention;
`FIG.6 is a key to the symbols employed in FIGS.
`7-40; and
`FIGS. 7-40 comprise a flowchart showing the opera-
`tion of the CDR unit of FIGS. 1 and 5.
`
`DETAILED DESCRIPTION
`
`35
`
`40
`
`45
`
`355
`
`60
`
`65
`
`A. Summary of System Operation
`For the purpose of description, the invention is de-
`scribed in connection with the selection (distribution)
`and redemption of coupons in a store such as a super-
`market where, currently, cents-off merchandise cou-
`pons are commonly used. As explained in a subsequent
`section of the specification, other arrangements for
`selecting/distributing couponsare also contemplated by
`the invention.
`FIG. 1 represents a system in accordance with the
`invention. An operations center, shownat 8, cooperates
`with a plurality of local stations 10. Each of these local
`stations 10 will be located at a supermarket (in this
`example) where the couponsare to be distributed and
`redeemed. The operations center 8 typically will be
`centrally located with a view toward ease of communi-
`cation between it and eachofthe local stations 10. For
`convenience, only a single operations center 8 is illus-
`trated although the functions of the operations center
`may be broken up into any desired numberofindividual
`centers.
`The operations center 8 contains a data entry system
`12, an image capture system 14 and a central processing
`unit 16. The specific functions of each of these units is
`described below. Generally, the data entry system is
`used to establish the data base which enables card issu-
`ance and the generation (if desired) of various reports
`on such subjects as, for example, demographic informa-
`tion relating to the individuals who have redeemed the
`coupons.
`The image capture system 14 essentially is responsible
`for enabling video images of the coupons to be pres-
`ented at the separate stores. The central processing unit
`(CPU) 16 has a wide range of functions, generaily han-
`dling the clearing process controls information flow to
`the local units and in the operations centeritself.
`
`PROVI-1023 - Page 42
`
`PROVI-1023 - Page 42
`
`

`

`5
`Each of the local stations 10 may be considered to
`consist of an automated UPC scanning checkout system
`18 and a local coupon distribution and redemption
`(CDR) unit 20. The local CDR unit 20 presents an
`electronic display to the customerof the coupons which
`are available for redemption after the customerinserts a
`card as described below into the unit. The card may
`include a UPC code which identifies the user and a
`magnetic stripe on which information can be recorded.
`The customerthen selects the coupons which he or she
`wishes to redeem. The CDR unit 20 records the selec-
`tion and makes information identifying the customer
`and the selected couponsavailable to each of the check-
`out stations which comprise the checkout system 18 of
`the supermarket. A receipt may be printed for the user’s
`convenience, identifying the selected coupons.
`;
`After the user has made his or her purchases, he or
`she goes to one of the checkoutstations and presentshis
`or hercard to the attendantat the station. The attendant
`causes the card to be read by a suitable card reader
`(such as a UPC card scanner) and the checkout system
`18 then automatically credits the customer for the cou-
`pons the customer has selected where there are corre-
`sponding purchases against which the couponsare to be
`applied.
`Thereafter, information regarding the redeemed cou-
`pons is transmitted to the central processing unit 16
`which then automatically debits the manufacturer who
`distributed the coupons and credits the supermarket
`corresponding to the local station 10 at which the cou-
`pon was redeemed.
`Hence,in the preferred embodiment, selection (distri-
`bution), redemption and clearing are accomplished au-
`tomatically without handling of paper coupons by cus-
`tomer or store and thus without the possibility of the
`types of fraud which now plague the industry.
`In the following portion of the specification, the op-
`erations of the individual blocks shown in FIG. 1 are
`described in detail. There are numerous modifications
`and embellishments of the preferred embodiment which
`are possible within the scope of the invention. Some of
`these are described at the end of the specification in the
`section entitled “Modifications and Embellishments.”
`
`B. Special Card Issuance Summary
`FIG. 2 is a flowchart summarizing the procedure
`employedto issue a special card for use with the inven-
`tion. Preferably, the card will identify the customer
`(e.g. by UPC code) and include magnetic tracks identi-
`fying the customer and on which data can be recorded
`as described below. As used herein, the term “special
`card” refers to such a card with the customeridentifia-
`ble by both UPC and magnetic shripe readers, as op-
`posed to a standard credit card (for example) which
`today contains a magnetic stripe but generally does not
`include an UPC codeto identify the customer.
`Completed requests for applications for a special card
`represented at 22 are received by mail and from partici-
`pating merchants. The requests forwarded by mer-
`chants maybe filled in on the receipts discussed above.
`They contain the customer’s name, address and tele-
`. phone number and are key-entered as indicated at 24
`into the data entry system 12 (FIG. 1). Edit checks
`verify that all required information is received. A tem-
`porary customer numberis also assigned. This data is
`then passed to the central processing unit 16.
`The central processor 16 edits the incoming file and
`compares each record against the customer master file
`
`15
`
`20
`
`25
`
`40
`
`45
`
`|
`
`65
`
`4,882,675
`
`6
`for potential duplications. For each valid new request,
`an application 26 is generated and mailed to the cus-
`tomerand the “temporary” customerrecord is added to
`the customer temporary masterfile 28.
`When completed applications containing the demo-
`graphic data are returned by the customer, they are
`read by a mark-