Method and system for using reward points to liquidate products

Abstract

Product providers are able to liquidate goods via a transacting entity such as a liquidation broker which acts to exchange a user's reward points for the liquidated goods in a manner that is transparent to both the redeeming user and the product provider. A user selects a product to be liquidated from a product provider and then designates to the transacting entity that reward points, held by a reward account holder in a reward point account on the user's behalf, are to be used towards the purchase of the liquidated product in whole or in part. The transacting entity acts to decrease the number of reward points in the user's reward account, as either designated by the user or by a third party, by the required number of points. The reward account holder conveys consideration to the transacting entity equivalent to the par value of the reward points. In this case, the consumer obtains the product in exchange for reward points having a retail value equivalent to what he would have otherwise paid for the product (a “reference price”), while the reward account holder is required to convey only the par value of the points (which is generally substantially less than the retail value of the points). The product provider is able to liquidate the product and obtain payment (the lower par value of the reward points) equivalent to what it would otherwise have obtained in a prior art liquidation process, auction or trading environment, but without having to go through a typically “liquidation process” with its accompanying brand devaluation and associated costs. The reward account holder is able to eliminate the liability of the reward points previously owed to the user, but pays far less (only at the lower par value) than the retail value of the points assigned by the user. The user may utilize reward points from a single reward points issuer, or he may aggregate points from multiple reward points issuing entities as described herein (cash and/or other consideration may also be combined with points as described herein).

1 . A method of executing a product liquidation transaction comprising the steps of: 
 a. a user having a reward account held by a reward account holder comprising reward points awarded by a reward issuing entity to the user as part of a transaction, the reward points having a par value assigned by the reward account holder equivalent to the amount that the reward account holder will convey upon surrender of said reward points;    b. a product provider offering to sell a product at a liquidation price that is less than a reference price otherwise charged for the product;    c. the user requesting a transacting entity to facilitate the user in obtaining the product by surrendering at least some of the reward points to the reward account holder;    d. requesting the reward account holder to convey to a transacting entity the par value of the surrendered reward points;    e. the transacting entity conveying consideration to the product provider equivalent to the liquidation price of the product; and    f. the product provider causing the product to be conveyed to the user;    whereby the user receives the product from the product provider as a result of surrendering the reward points; the reward points being surrendered with a retail value greater than the par value conveyed by the reward account holder.    
   
   
       2 . The method of  claim 1  wherein the product provider is a merchant.  
   
   
       3 . The method of  claim 1  wherein the product provider is a manufacturer.  
   
   
       4 . The method of  claim 1  wherein the product provider is a wholesaler.  
   
   
       5 . The method of  claim 1  wherein the product provider is a distributor.  
   
   
       6 . The method of  claim 1  wherein the product provider is a liquidator.  
   
   
       7 . The method of  claim 1  wherein the product provider is retailer.  
   
   
       8 . The method of  claim 1  wherein the product provider is broker/trader.  
   
   
       9 . The method of  claim 1  wherein the product provider is a points exchange network.  
   
   
       10 . The method of  claim 1  wherein the steps performed by the transacting entity are performed by a liquidating service.  
   
   
       11 . The method of  claim 1  wherein the steps performed by the transacting entity are performed by the reward account holder.  
   
   
       12 . The method of  claim 1  wherein the steps performed by the transacting entity are performed by the product provider.  
   
   
       13 . The method of  claim 1  further comprising the step of the transacting entity advertising the availability of the product in exchange for reward points.  
   
   
       14 . The method of  claim 13  wherein the liquidation price of the product is equivalent to the par value of the reward points needed to obtain the product.  
   
   
       15 . The method of  claim 13  wherein the liquidation price of the product is equivalent to the par value of the reward points and other consideration.  
   
   
       16 . The method of  claim 14  wherein a transaction fee is conveyed from the user to the transacting entity in exchange for executing the transaction.  
   
   
       17 . The method of  claim 14  wherein a transaction fee is conveyed from the reward account holder to the transacting entity in exchange for executing the transaction.  
   
   
       18 . The method of  claim 14  wherein a transaction fee is conveyed from the product provider to the transacting entity in exchange for executing the transaction.  
   
   
       19 . The method of  claim 1  wherein the reward account holder is a single reward issuing entity.  
   
   
       20 . The method of  claim 1  wherein the reward account holder is an aggregator and the reward account is an exchange account comprising reward point value obtained as a result of exchanging reward points from at least one or more different reward issuing entities.  
   
   
       21 . The method of  claim 1  wherein the reward points represented by frequent flyer miles awarded by an airline.  
   
   
       22 . The method of  claim 1  wherein the reward points represented by cash-back value.  
   
   
       23 . The method of  claim 1  wherein the reward points represented by gift certificates.  
   
   
       24 . The method of  claim 1  wherein the reward points represented by product rebate value.  
   
   
       25 . A system for executing a product liquidation transaction comprising: 
 a. a reward points server computer selectively interconnected over a computer network and associated with a reward account holder, comprising data storage means for storing a reward account associated with a user, the reward account configured to track reward points earned by the user for transactions between the user and a reward issuing entity, wherein the reward points have a par value assigned by the reward account holder equivalent to the amount that the reward account holder will convey upon surrender of said reward points;    b. a product provider server computer selectively interconnected over the computer network and associated with a product provider, comprising means for offering to sell a product at a liquidation price that is less than a reference price otherwise charged for the product;    c. a user computer selectively interconnected over the computer network and associated with a user, comprising means for requesting a transacting entity to facilitate the user in obtaining the product by surrendering at least some of the reward points to the reward account holder;    d. a transaction server computer selectively interconnected over the computer network and associated with a transacting entity, comprising: 
 i. means for requesting the reward account holder to convey to the transacting entity the par value of the surrendered reward points;  
 ii. means for conveying consideration to the product provider equivalent to the liquidation price of the product;  
   whereby the user receives the product from the product provider as a result of surrendering the reward points;    the reward points being surrendered with a retail value greater than the par value conveyed by the reward points issuing entity.    
   
   
       26 . The system of  claim 25  wherein the product provider is a merchant.  
   
   
       27 . The system of  claim 25  wherein the product provider is a manufacturer.  
   
   
       28 . The system of  claim 25  wherein the product provider is a wholesaler.  
   
   
       29 . The system of  claim 25  wherein the product provider is a distributor.  
   
   
       30 . The system of  claim 25  wherein the product provider is a liquidator.  
   
   
       31 . The system of  claim 25  wherein the product provider is retailer.  
   
   
       32 . The system of  claim 25  wherein the transacting entity is a liquidating service.  
   
   
       33 . The system of  claim 25  wherein the transacting entity and the reward account holder are the same entity.  
   
   
       34 . The system of  claim 25  wherein the transacting entity and the product provider are the same entity.  
   
   
       35 . The system of  claim 25  wherein the transaction server computer further comprises means for advertising the availability of the product in exchange for reward points.  
   
   
       36 . The system of  claim 35  wherein the liquidation price of the product is equivalent to the par value of the reward points needed to obtain the product.  
   
   
       37 . The system of  claim 35  wherein the liquidation price of the product is equivalent to the par value of the reward points and other consideration.  
   
   
       38 . The system of  claim 36  wherein a transaction fee is conveyed from the user to the transacting entity in exchange for executing the transaction.  
   
   
       39 . The system of  claim 36  wherein a transaction fee is conveyed from the reward account holder to the transacting entity in exchange for executing the transaction.  
   
   
       40 . The system of  claim 36  wherein a transaction fee is conveyed from the product provider to the transacting entity in exchange for executing the transaction.  
   
   
       41 . The system of  claim 25  wherein the reward account holder is a single reward issuing entity.  
   
   
       42 . The system of  claim 25  wherein the reward account holder is an aggregator and the reward account is an exchange account comprising reward point value obtained as a result of exchanging reward points from at least one or more different reward issuing entities.  
   
   
       43 . The system of  claim 25  wherein the reward points represented by frequent flyer miles awarded by an airline.  
   
   
       44 . The system of  claim 25  wherein the reward points represented by cash-back value.  
   
   
       45 . The system of  claim 25  wherein the reward points represented by gift certificates.  
   
   
       46 . The system of  claim 25  wherein the reward points represented by product rebate value.  
   
   
       47 . The method of  claim 1  wherein the product provider conveys the product to the user directly.  
   
   
       48 . The method of  claim 1  wherein the product provider causes a second party to convey the product to the user.  
   
   
       49 . The method of  claim 48  wherein the product provider gives a credit to the second party in exchange for the second party conveying the product to the user.  
   
   
       50 . The method of  claim 49  wherein the product provider provides an alternative product to the second party in exchange for the second party conveying the product to the user.  
   
   
       51 . The system of  claim 25  wherein the product provider conveys the product to the user directly.  
   
   
       52 . The system of  claim 25  wherein the product provider causes a second party to convey the product to the user.  
   
   
       53 . The system of  claim 52  wherein the product provider gives a credit to the second party in exchange for the second party conveying the product to the user.  
   
   
       54 . The system of  claim 53  wherein the product provider provides an alternative product to the second party in exchange for the second party conveying the product to the user.