Settlement systems and methods wherein a buyer takes possession at a retailer of a product purchased using a communication network

Abstract

Settlement systems and methods are provided wherein a buyer takes possession of a product at a retailer. In one embodiment, a purchasing system arranges through a communication network for a buyer to purchase a product from a seller at a first price. The purchasing system also arranges for the buyer to take possession of the product at a retailer that offers the product for sale at a second price. Payment of an amount based on the first price is received from the buyer, and the purchasing system arranges for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

Claims

What is claimed is:

1. A method of operating a purchasing system, comprising:

arranging through a communication network for a buyer to (i) purchase a product from a seller at a first price, and (ii) take possession of the product at a retailer that offers the product for sale at a second price, wherein the retailer is not the seller;

receiving from the buyer a payment of an amount based on the first price; and

arranging for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

2. The method of claim 1, wherein the settlement price is based on the second price.

3. The method of claim 2, wherein the settlement price is equal to the second price.

4. The method of claim 2, wherein the settlement price is a percentage of the second price.

5. The method of claim 2, wherein the settlement price is more than the second price.

6. The method of claim 2, wherein the settlement price is further based on a commission amount.

7. The method of claim 1, wherein the settlement price is not solely a function of the second price.

8. The method of claim 1, wherein the settlement price is not based on the second price.

9. The method of claim 1, wherein said receiving payment from the buyer comprises charging a financial account associated with the buyer.

10. The method of claim 9, wherein the payment is received at a tune based on when the purchasing system arranges for the buyer to purchase the product.

11. The method of claim 9, wherein the payment is received at a time based on when the buyer takes possession of the product at the retailer.

12. The method of claim 9, wherein said receiving payment comprises receiving payment of an amount based on the first price plus a penalty amount.

13. The method of claim 12, wherein the penalty amount is imposed when the buyer has not took possession of the product from the retailer within a predetermined period of time.

14. The method of claim 13, wherein the penalty amount is based on a cost associated with shipping the product to the buyer.

15. The method of claim 1, wherein said arranging for the buyer to purchase the product comprises:

receiving a buyer offer, including a buyer-defined first price and information about the product, from the buyer; and

determining if the buyer offer will be accepted.

16. The method of claim 15, wherein the information about the product includes at least one of: a product category; a product class; a product feature; a product manufacturer; and a product identifier.

17. The method of claim 15, wherein the buyer offer includes a payment identifier.

18. The method of claim 15, wherein said determining comprises at least one of: (i) sending information about the buyer offer to at least one seller; and (ii) locally determining if the buyer offer will be accepted.

19. The method of claim 1, wherein the first price is set by the seller.

20. The method of claim 1, wherein the first price is set by the buyer.

21. The method of claim 1, wherein the first price is set by the purchasing system.

22. The method of claim 1, wherein said arranging for the buyer to purchase the product comprises evaluating at least one of: the first price; the settlement price; a seller price; a subsidy amount; a commission amount; and a minimum acceptable price.

23. The method of claim 22, wherein said evaluation further comprises evaluating a minimum profit amount.

24. The method of claim 23, wherein said evaluation comprises comparing the minimum profit amount to the first price less the settlement price.

25. The method of claim 23, wherein said evaluation comprises comparing the minimum profit amount to the first price and the subsidy amount less the settlement price.

26. The method of claim 23, wherein the minimum profit amount is a negative amount.

27. The method of claim 22, wherein said arranging for the buyer to take possession of the product comprises selecting at least one product from a plurality of possible products.

28. The method of claim 22, wherein said arranging for the buyer to take possession of the product comprises selecting at least one retailer from a plurality of possible retailers.

29. The method of claim 22, wherein said arranging for the buyer to take possession of the product comprises selecting a plurality of retailers.

30. The method of claim 22, wherein said evaluation comprises:

comparing the first price with a minimum acceptable price; and

comparing the minimum profit amount to the first price and the subsidy amount less the settlement price.

31. The method of claim 22, wherein said arranging for the buyer to purchase the product is only performed if(i) first price is at least equal to the minimum acceptable price; and (ii) the minimum profit amount is at least equal to the first price and the subsidy amount less the settlement price.

32. The method of claim 1, wherein said arranging for the buyer to purchase the product comprises arranging for the seller to sell the product to the buyer at a seller price.

33. The method of claim 32, wherein said arranging for the seller to sell the product further comprises evaluating a minimum acceptable price below which a product will not be sold.

34. The method of claim 33, wherein the minimum acceptable price is set by the seller.

35. The method of claim 33, wherein the minimum acceptable price is set by the purchasing system.

36. The method of claim 32, wherein the first price is not equal to the seller price.

37. The method of claim 33, comprising exchanging payment of a seller amount with the seller, the seller amount being based on the first price and the settlement price.

38. The method of claim 1, wherein said arranging for the buyer to take possession of the product comprises sending redemption information to buyer.

39. The method of claim 1, wherein said arranging for the buyer to take possession of the product comprises:

receiving from the retailer information related to an attempt to take possession of the product; and

sending to the retailer a verification authorizing the buyer to take possession of the product.

40. The method of claim 1, wherein said arranging for the retailer to receive payment of the settlement price comprises paying the settlement price to the retailer.

41. The method of claim 40, wherein said arranging for the buyer to take possession of the product comprises selecting a plurality of retailers and the settlement price is paid to the retailer at which the buyer took possession of the product.

42. The method of claim 1, wherein said arranging for the buyer to purchase the product comprises arranging for a seller to sell the product to the buyer, and said arranging for the retailer to receive payment of the settlement price comprises arranging for the retailer to receive payment of the settlement price from the seller.

43. The method of claim 1, further comprising receiving payment of a subsidy amount from a subsidy provider.

44. The method of claim 43, wherein the subsidy provider comprises at least one of: a manufacturer of the product; a seller of the product; the retailer; and a third party subsidy provider.

45. The method of claim 43, wherein said arranging for the buyer to purchase the product comprises arranging for a product manufacturer to sell the product to the buyer at a seller price, and said receiving payment of a subsidy amount comprises adjusting a seller amount exchanged with the manufacturer.

46. The method of claim 43, wherein said arranging for the buyer to purchase the product comprises arranging for the retailer to sell the product to the buyer at a seller price, and said receiving payment of a subsidy amount comprises adjusting the settlement price paid to the retailer.

47. The method of claim 43, wherein the subsidy amount is variable and further includes a maximum subsidy amount.

48. The method of claim 43, wherein the subsidy amount is associated with a plurality of transactions performed by the purchasing system.

49. The method of claim 1, further comprising receiving payment of a commission amount from a commission provider.

50. The method of claim 49, wherein the commission provider comprises at least one of: a manufacturer of the product; a seller of the product; the retailer; and the buyer.

51. The method of claim 49, wherein the commission amount is based on at least one of: a predetermined amount; a percentage of the first price; a percentage of the settlement price; and a percentage of a seller price.

52. The method of claim 49, wherein said receiving payment of the commission amount comprises adjusting at least one of: the first price; the settlement price; and a seller amount exchanged with a seller.

53. The method of claim 1, wherein the settlement price is not equal to the second price.

54. The method of claim 1, wherein the first price is not equal to the second price.

55. The method of claim 1, wherein the first price is not equal to the settlement price.

56. The method of claim 1, further comprising subsidizing the purchase of the product.

57. The method of claim 56, wherein the purchasing system subsidizes the purchase of the product based on at least one of: subsidies provided to other buyers; past subsidies provided to the buyer; and a maximum purchasing system subsidy amount.

58. The method of claim 1, wherein the purchasing system arranges for a plurality of buyers to take possession of a plurality of products at the retailer.

59. The method of claim 58, wherein the purchasing system arranges for the retailer to receive a payment corresponding to each settlement price as each of the plurality of products is provided.

60. The method of claim 58, wherein the purchasing system arranges for the retailer to receive a payment corresponding to a plurality of settlement prices after the retailer has provided a plurality of products.

61. A method of operating a purchasing system, comprising:

receiving, from a buyer through a communication network, information about a product to be purchased from a seller at a first price;

receiving payment based on the first price from the buyer;

arranging for the buyer to take possession of the product at a retailer that offers the product for sale at a second price, wherein the retailer is not the seller;

sending to the retailer verification information enabling the retailer to authorize the buyer to take possession of the product; and

arranging for the retailer to receive payment of a settlement puce in exchange for providing the product to the buyer.

62. The method of claim 61, wherein the received information comprises a buyer offer, the first price is a buyer-defined price, and the information about the product includes at least one of: a product category; a product class; a product feature; and a payment identifier.

63. The method of claim 62, further comprising determining if the buyer offer will be accepted.

64. The method of claim 63, wherein said determining comprises at least one of:

(i) sending information about the buyer offer to at least one seller; and

(ii) locally determining if the buyer offer will be accepted.

65. The method of claim 1, wherein said arranging for a buyer to purchase a product comprises evaluating at least one of: the first price; the settlement price; a seller price; a subsidy amount; a commission amount; and a minimum acceptable price.

66. The method of claim 61, further comprising:

receiving a subsidy amount from a subsidy provider, wherein the subsidy amount is at least equal to the difference between the first price and the settlement price.

67. The method of claim 1, wherein said sending to the retailer verification information comprises:

sending redemption information to the buyer;

receiving from the retailer information related to an attempt to take possession of the product; and

sending to the retailer a verification authorizing the buyer to take possession of the product.

68. The method of claim 67, wherein the redemption information and the information related to an attempt to take possession of the product comprise a redemption code.

69. The method of claim 68, wherein the redemption code is a pseudo payment identifier.

70. The method of claim 69, wherein the pseudo payment identifier is one of a pseudo: credit card number; debit card number; and banking account number.

71. The method of claim 69, wherein the pseudo payment identifier is uniquely associated with the purchase of the product by the buyer.

72. The method of claim 71, wherein said receiving from the retailer the pseudo payment identifier comprises receiving the identifier through a credit card processing system.

73. The method of claim 71, wherein the pseudo payment identifier is provided on a voucher, and the retailer sends the voucher to the purchasing system as a record of charge.

74. The method of claim 71, wherein said arranging for the buyer to take possession of the product at a retailer further comprises adjusting a spending limit associated with the pseudo payment identifier.

75. The method of claim 74, wherein said adjusting a spending limit comprises establishing a minimum spending amount and a maximum spending amount based on the settlement price.

76. The method of claim 75, wherein the information related to an attempt to take possession of the product comprises a purchase price and said sending a verification is only performed if the purchase price is more than the minimum spending amount and less than the maximum spending amount.

77. The method of claim 74, wherein said adjusting comprises adjusting the spending limit based on one of: the second price; the settlement price; and the first price.

78. The method of claim 77, wherein said adjusting is further based on one of: a penalty amount; and a tax amount.

79. The method of claim 74, wherein said adjusting is based on one of (i) an average; and (ii) the highest of a plurality of settlement prices or retail prices associated with the product.

80. The method of claim 74, wherein the spending limit is re-adjusted when the buyer takes possession of the product at the retailer.

81. The method of claim 67, wherein the information received from the retailer comprises:

a sixteen digit pseudo credit card number, including four digits associated with the purchasing system and twelve digits associated with the buyer's purchase of the product; and

an expiration date.

82. The method of claim 67, wherein said receiving payment of the buyer price from the buyer is only performed after said sending of the verification to the retailer.

83. The method of claim 67, further comprising:

receiving, after the verification is sent to the retailer, payment of a subsidy amount from a subsidy provider.

84. A method of operating a purchasing system, comprising:

receiving, from a buyer through a communication network, a buyer offer, including information about a product to be purchased, a first price and a payment identifier;

determining if the buyer offer will be accepted by evaluating at least one of: the first price, a settlement price to be paid to a retailer in exchange for providing the product to the buyer, a seller price to be paid to a seller of the product, a subsidy amount to be paid by a subsidy provider, a commission amount to be paid by a commission provider, and a minimum acceptable price;

receiving from the buyer payment of the first price using the payment identifier;

sending a pseudo payment identifier to the buyer;

receiving the pseudo payment identifier from the retailer;

sending to the retailer a verification authorizing the buyer to take possession of the product; and

arranging for the retailer to receive payment of the settlement price.

85. The method of claim 84, further comprising:

adjusting a spending limit associated with the pseudo payment identifier when the pseudo payment identifier is sent to the buyer; and

re-adjusting the spending limit when the buyer takes possession of the product at the retailer.

86. A purchasing system device, comprising:

a processor; and

a storage device coupled to said processor and storing instructions adapted to be executed by said processor to:

arrange through a communication network for a buyer to (i) purchase a product from a seller at a first price, and (ii) take possession of the product at a retailer, different from the seller, that offers the product for sale at a second price;

receive from the buyer a payment of an amount based on the first price; and

arrange for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

87. A purchasing system apparatus, comprising:

means for arranging through a communication network for a buyer to (i) purchase a product from a seller at a first price, and (ii) take possession of the product at a retailer, different from the seller, that offers the product for sale at a second price;

means for receiving from the buyer a payment of an amount based on the first price; and

means for arranging for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

88. A medium storing instructions adapted to be executed by a processor to perform a method for operating a purchasing system, said method comprising:

arranging through a communication network for a buyer to (i) purchase a product from a seller at a first price, and (ii) take possession of the product at a retailer, different from the seller, that offers the product for sale at a second price;

receiving from the buyer a payment of an amount based on the first price; and

arranging for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

89. A method of using a purchasing system, comprising:

arranging with the purchasing system, through a communication network, to purchase a product from a seller at a first price;

paying an amount based on the first price to the purchasing system;

receiving redemption information from the purchasing system;

providing the redemption information to a retailer that offers the product for sale at a second price; and

taking possession of the product at the retailer.

90. A method of operating a purchasing system, comprising:

arranging through a communication network for a buyer to render payment equal to a first price, through the communication network, to a seller for a product, the product being offered for sale by the seller for the first price;

arranging for the buyer to take possession of the product at a retailer that offers the product for sale at a second price; and

arranging for the retailer to receive payment of a settlement price in exchange for providing the product to the buyer.

91. The method of claim 90, wherein the settlement price is the first price when the seller is the retailer.

92. The method of claim 90, further comprising:

determining if the seller is the retailer.

93. The method of claim 92, wherein the seller is a party other than the retailer and the settlement price is based on the second price.

94. The method of claim 92, wherein the seller is the retailer and the settlement price is based on the first price.

95. The method of claim 92, wherein the seller is the retailer and the settlement price is based on the second price.

96. A method of operating a purchasing system, comprising:

arranging through a communication network for a buyer to (i) purchase a product from a seller at a first price, and (ii) take possession of the product at a retail that offers the product for sale at a second price, wherein the retailer is not the seller;

arranging for the buyer to provide to the retailer a payment of an amount based on the first price; and

arranging for the retailer to receive payment of an amount based on a difference between the first price and a settlement price in exchange for providing the product to the buyer.

97. A method of operating a purchasing system, comprising:

arranging through a communication network for a buyer to (i) purchase a product from a seller at a first price, and (ii) take possession of the product at a retail that offers the product for sale at a second price, wherein the retailer is not the seller;

determining if the second price is less than the first price; and

if the second price is less than the first price, arranging for the buyer to purchase the product from the seller at no more than the second price.

Description

FIELD OF THE INVENTION

The present invention relates to the sale of products. In particular, the present invention relates to settlement systems and methods wherein a buyer takes possession at a retailer of a product purchased using a communication network.

BACKGROUND OF THE INVENTION

Typically, a buyer visits one or more retailers to shop for a product. When the buyer finds the product he or she is looking for, at a reasonable price, the buyer purchases the product from the retailer. This traditional method of providing products to buyers, however, may require that the buyer visit a number of retailers to determine what should be considered a reasonable price for the product.

Moreover, the traditional method of selling a product to a buyer requires that a retailer attract buyers, such as by spending money on advertising. For example, when a new retail store opens for business, many buyers will not know what products the store sells. In addition, traditional methods do not let a product manufacturer establish a pricing relationship directly with buyers when the product is provided to buyers through one or more retailers. For example, a manufacturer may sell a product to a retailer (perhaps through a distributor) that ultimately decides the price at which the product is sold to buyers.

Recently, products have been sold to buyers through communication networks, such as with online transactions completed through the Internet. Internet sales have been growing steadily over the past few years, and are expected to continue increasing because buyers are attracted to the ease and convenience of shopping online. For example, a buyer can shop online from the comfort of home at any time of day or night.

Another advantage of online shopping is that pricing comparisons are less time consuming. For example, a Web service can compile prices from various sources (e.g., Web merchants and/or retail stores that are not online) for various products. This lets a buyer easily find and select, for example, a retail store that offers the lowest price for a product. Although this will save a buyer time, only regular retail prices (which the buyer would eventually be able to find without the Web site) are typically reported—without providing any other pricing advantage. As price information becomes more accessible, buyers are growing more price sensitive and demand that products be sold at lower prices.

Having a product shipped to a buyer, which is the conventional mode of delivering a product purchased online, presents several drawbacks. For example, many buyers are not home during the day and cannot sign for, or otherwise arrange to receive, the product from a delivery service. In addition, the shipping service itself presents an additional cost that, depending on the product, may offset any savings made possible by shopping online. Finally, some products simply cannot be delivered at all, such as a service provided to buyers.

With respect to a buyer, another disadvantage of online shopping is the delay involved with receiving a product. The online shopping community has not effectively captured the impulsive and impatient buyer market, because a buyer is more likely to impulsively purchase a product when he or she can take immediate possession (instead of waiting several days for delivery). In other words, a buyer who wants a product immediately is likely to visit a retailer and not buy the product online.

With respect to retail stores that are not online, online shopping presents additional problems. For example, the store is typically left completely out of any online shopping transaction. In addition to losing the potential profit from the sale of the product itself, the store loses any chance of selling the buyer additional items during a visit, such as peripherals for the product or even unrelated items that attract the buyer's attention while he or she is in the store. This would still be a problem even if the store invested the time and money required to establish an online shopping service. Moreover, the store's online service may simply shift sales that would have otherwise occurred at the actual store (as opposed to attracting new buyers).

With respect to manufacturers, the availability of online shopping does little to solve the problem of establishing a pricing relationship directly with buyers. Some manufacturers have attempted to establish such a relationship by establishing an online shopping service. However, manufacturers that establish such a service compete directly with their retailer's traditional distribution channel and therefore risk alienating retailers that also sell the manufacturer's product. Additionally, establishing such a service requires a manufacturer to take on additional cost and responsibility in attracting and servicing customers directly.

In U.S. patent application Ser. No. 09/337,906 filed Jun. 22, 1999 and entitled "Purchasing Systems and Methods Wherein a Buyer Takes Possession at a Retailer of a Product Purchased Using a Communication Network", applicants disclose methods and systems wherein a purchasing system solves many of the problems discussed above. However, when a buyer purchases a product using such a purchasing system, a need exists for further systems and methods to distribute payments, or "settle," between, for example, the purchasing system, the buyer, the seller and the retailer.

SUMMARY OF THE INVENTION

To alleviate the problems inherent in the prior art and to facilitate the distribution of payments when a buyer purchases a product using a purchasing system, the present invention introduces settlement systems and methods wherein a buyer takes possession at a retailer of a product purchased using a communication network.

In one embodiment of the present invention, a purchasing system arranges through a communication network for a buyer to purchase a product from a seller at a first price. The purchasing system also arranges for the buyer to take possession of the product at a retailer that offers the product for sale at a second price. Payment of an amount based on the first price is received from the buyer, and the purchasing system arranges for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

With these and other advantages and features of the invention that will become hereinafter apparent, the nature of the invention may be more clearly understood by reference to the following detailed description of the invention, the appended claims and to the several drawings attached herein.

BRIEF DESCRIPTION OF THE DRAWINGS

FIGS. 1A to 1C are block diagrams illustrating the distribution of payments between a purchasing system, a buyer, a seller and a retailer according to embodiments of the present invention.

FIGS. 1D to 1E are block diagrams of settlement systems in which a buyer takes possession of a product at a retailer according to embodiments of the present invention.

FIG. 2 is a block schematic diagrams of a buyer device according to an embodiment of the present invention.

FIG. 3 is a block schematic diagram of a purchasing system device according to an embodiment of the present invention.

FIG. 4 is a block schematic diagram of a retailer device according to an embodiment of the present invention.

FIG. 5 is a block schematic diagram of a seller device according to an embodiment of the present invention.

FIG. 6 is a block schematic diagram of a credit card processing system device according to an embodiment of the present invention.

FIG. 7 is a tabular representation of a portion of a product database according to an embodiment of the present invention.

FIG. 8 is a tabular representation of a portion of a subsidy database according to an embodiment of the present invention.

FIG. 9 is a tabular representation of a portion of a settlement price database according to an embodiment of the present invention.

FIG. 10 is a tabular representation of portions of the product, subsidy and settlement price databases according to an embodiment of the present invention.

FIG. 11 is a tabular representation of a portion of a retailer database according to an embodiment of the present invention.

FIG. 12 is a tabular representation of a portion of a seller database according to an embodiment of the present invention.

FIGS. 13A and 13B are a tabular representation of a portion of an accepted offer database stored at a purchasing system device according to an embodiment of the present invention.

FIG. 14 is a tabular representation of a portion of a retailer account database stored at a purchasing system device according to an embodiment of the present invention.

FIG. 15 is a tabular representation of a portion of a seller account database according to an embodiment of the present invention.

FIG. 16 is a tabular representation of a portion of a pricing database according to an embodiment of the present invention.

FIG. 17 is a tabular representation of a portion of an accepted offer database stored at a retailer device according to an embodiment of the present invention.

FIG. 18 is a tabular representation of a portion of a purchasing system account database according to an embodiment of the present invention.

FIG. 19 is a tabular representation of a portion of a seller product database according to an embodiment of the present invention.

FIG. 20 is a tabular representation of a portion of an issuer database according to an embodiment of the present invention.

FIG. 21 is a tabular representation of a portion of an issuer account database according to an embodiment of the present invention.

FIG. 22 is a tabular representation of a portion of a retailer account database stored at a credit card processing system device according to an embodiment of the present invention.

FIG. 23 is a tabular representation of a portion of a third party subsidy database according to an embodiment of the present invention.

FIG. 24 is a tabular representation of a portion of a third party account database according to an embodiment of the present invention.

FIG. 25 is a flow chart illustrating a settlement system method in which a buyer takes possession of a product at a retailer according to an embodiment of the present invention.

FIG. 26 is a flow chart illustrating a purchasing system method according to an embodiment of the present invention.

FIGS. 27A to 27C are flow charts illustrating a purchasing system method according to another embodiment of the present invention.

FIG. 28 is a flow chart illustrating a pseudo payment identifier batch settlement method according to an embodiment of the present invention.

FIG. 29 is a flow chart illustrating a retailer method according to an embodiment of the present invention.

FIG. 30 is a flow chart illustrating a seller method according to an embodiment of the present invention.

DETAILED DESCRIPTION OF THE INVENTION

The present invention is directed to settlement systems and methods wherein a buyer takes possession of a product at a retailer. Turning now in detail to the drawings, FIGS. 1A to 1C are block diagrams illustrating the distribution of payments according to embodiments of the present invention.

The settlement system 10 illustrated in FIG. 1A includes a purchasing system 30 that arranges for a buyer 20 to purchase a "product" from a seller 50 at a first price. As used herein, a "product" may be, for example, a new or used consumer product such as an electronic device. A product may also be any other good or service that a buyer can take possession of at a retailer 40. In the case of a service, the product may be, for example, a car tune-up that the buyer "takes possession of at" (i.e., receives the service from) a car service center. A product may also be a package of multiple items and/or services. For example, a product may be a television and a Video Cassette Recorder (VCR). In this case, the purchasing system 30 may arrange for the buyer to take possession of both items at a single retailer 40 or at different retailers.

Note that, as used herein, a "retailer" may be any entity capable of providing a product to a buyer. For example, a retailer might be a single retail shop, a chain of consumer electronic "superstores," one or more retail stores within a chain, a franchiser, a franchiser, or even a warehouse where products are stored.

The actual amount provided from the buyer 20 to the purchasing system 30 may not be equal to the first price. For example, the first price may be adjusted based on an applicable tax or penalty, as will be described. In general, from the perspective of the buyer 20, a payment of an amount associated with the first price is provided to the purchasing system 30 in exchange for the right to take possession of the product at the retailer 40.

According to one embodiment of the present invention, the retailer 40 agrees to provide the product to the buyer 20 in exchange for a "settlement" price. The settlement price may be, for example, a second price at which the retailer 40 normally offers the product for sale (i.e., the "retail" price). Note that according to one embodiment of the present invention, the settlement price is a predetermined amount agreed to between, for example, the retailer 40 and the purchasing system 30.

The retailer 40 may accept a settlement price lower than the retail price in order to, for example, have an opportunity to sell additional products to the buyer 20 when the buyer visits the retailer 40 to take possession of the product. The retailer 40 may instead require payment of a settlement price higher than the retail price in order to, for example, compensate the retailer 40 for the expense of processing a transaction involving the purchasing system 30. In either case, the settlement price may be based on, for example, a percentage of the retail price or the retail price adjusted by a predetermined amount. Of course, the settlement price does not need to be a function of the retail price.

According to one embodiment of the present invention, the purchasing system 30 provides a payment of an amount based on the settlement price to the retailer 40. According to another embodiment of the present invention, the seller 50 provides a payment of an amount based on the settlement price to the retailer 40 (as shown by a dashed line in FIG. 1A).

According to an embodiment of the present invention, the settlement price provided to the retailer 40 may not be equal to the first price provided by the buyer 20. As a result, payment of a "seller amount" may need to be exchanged between the seller 50 of the product and the purchasing system 30. For example, the buyer 20 may purchase a television from the seller 50 for $100. The retailer 40 may provide the television to the buyer in exchange for payment of a settlement price of $90. In this case, the purchasing system 30 may receive the first price ($100) from the buyer 20, provide the settlement price ($90) to the retailer 40 and provide a seller amount to the seller 50 based on the difference between the first price and the settlement price (i.e., $10). If the retailer 40 had instead required payment of a $120 settlement price, the seller 50 may have provided payment of a seller amount ($20) to the purchasing system 30 instead.

According to another embodiment of the present invention, the buyer 20 agrees to purchase the product at a first price and the seller agrees to sell the product at a "seller" price which may be different from the first price. In this case, the purchasing system 30 may profit from the difference between the seller price and the buyer price, if any. As shown in FIG. 1A, the purchasing system may also receive payment of a commission amount from a commission provider 70. The commission provider 70 may be, for example, the buyer 20, the seller 50, the retailer 40, a product manufacturer or a combination thereof. The commission amount may be, for example, a percentage of the first price, the seller price or the settlement price, or a predetermined amount.

According to another embodiment of the present invention, a subsidy provider 60 provides payment of a subsidy amount to subsidize the purchase of the product by the buyer 20. The subsidy provider 60 may be, for example, the seller 50, the retailer 40, a product manufacturer, a third party or the purchasing system 30.

By way of example, consider a buyer 20 who arranges through the purchasing system 30 to purchase a 35 millimeter (mm) camera from a seller 50 for $150. The purchasing system 30 determines that the camera is available at a retailer for a settlement price of $175. A subsidy provider 60, such as the manufacture of the camera, has agreed to provide a $35 subsidy for each camera sold. In this case, the purchasing system 30 "settles" the transaction by receiving $150 from the buyer 20 and $35 from the subsidy provider 60 and providing $175 to the retailer 40. In such a scenario, the purchasing system 30 has collected payment of $185 ($150 from the buyer 20 and $35 from the subsidy provider 60) and provided payment of $175, leaving it with an excess of $10. The purchasing system 30 may retain this $10 as profit, provide the $10 to the manufacturer of the product, store the $10 in associate with the buyer for use as a subsidy amount in a future transaction of the buyer, or any combination thereof.

The settlement system 12 illustrated in FIG. 1B includes a purchasing system 32 that sells a product to a buyer 22 at a first price. That is, the purchasing system 32 is also acting as the seller 50 shown in FIG. 1A. As before, the retailer 42 agrees to provide the product to the buyer 22 in exchange for payment of a settlement price, and the purchasing system may receive additional payments from a subsidy provider 62 and a commission provider 72.

The settlement system 14 illustrated in FIG. 1C includes a purchasing system 34 that arranges for a retailer 44 to sell a product to a buyer 24 at a first price. That is, the retailer 44 is also acting as the seller 50 shown in FIG. 1A. As before, the purchasing system may receive additional payments from a subsidy provider 64 and a commission provider 74. In this case, however, the retailer 44 agrees to provide the product to the buyer 24 in exchange for payment of a seller price (which may be equal to or based on the first price), not a settlement price.

Thus, the present invention comprises a settlement system and method for collecting and distributing funds amongst buyers, sellers, and retailers participating in transactions through a purchasing system.

Settlement Systems

FIGS. 1D to 1E are block diagrams of settlement systems in which a buyer takes possession of a product at a retailer according to embodiments of the present invention.

The system 16 shown in FIG. 1D includes a number of buyer devices 200 coupled to a purchasing system device 300 through a communication network 100. The buyer devices 200 may be, for example, Personal Computers (PCs), Personal Digital Assistants (PDAs), wired or wireless telephones, one-way or two-way pagers, kiosks, Automated Teller Machines (ATMs), watches enabled to communicate with the network 100, or any other appropriate communication device. The communication network 100 may be, for example, a Local Area Network (LAN), a Wide Area Network (WAN), a wireless network, a Public Switched Telephone Network (PSTN), or an Internet Protocol (IP) network such as the Internet, an intranet or an extranet.

According to one embodiment of the present invention, the purchasing system device 300 receives a buyer offer, including a buyer-defined offer price, related to a product to be purchased. The buyer offer may be "binding" in that if a seller agrees (perhaps within a predefined period of time from the time the buyer submits his or her offer), to accept the offer the buyer cannot revoke the offer. The buyer provides a payment identifier when submitting his or her offer and agrees that the purchasing system may automatically utilize the payment identifier to collect the buyer defined offer price if a seller accepts the offer. One example of a buyer offer, called a Conditional Purchase Offer (CPO), is described in U.S. Pat. No. 5,794,207 and U.S. patent application Ser. No. 08/889,319, the entire contents of which are hereby incorporated by reference. A CPO may be, for example, an electronic message from a buyer including an offer price for a product. If a seller agrees to the CPO, the buyer pays the offer amount to the purchasing system and takes possession of the product at a retailer. The purchasing system, in turn, provides a payment of the settlement price to the retailer.

In addition to an offer price, the buyer offer can include other information, such as a product category, a product class, one or more product features, or a product manufacturer and product identifier (e.g., model number). For example, the buyer offer may indicate that the buyer will pay $500 (the offer price) for a television (the product category) made by a well-respected manufacturer and having a 32 inch screen (the product class) and surround sound (a product feature).

The buyer offer may be received from a buyer device 200 through the communication network 100, and the purchasing system device 300 arranges for the buyer to purchase the product from a "seller," such as the product manufacturer, a retailer, the purchasing system or any other party. The purchasing system device 300 also arranges for the buyer to take possession of the product at a retailer.

According to an embodiment of the present invention, the buyer pays the purchasing system in exchange for the right to take possession of the product at the retailer. The retailer receives a payment, which may or may not be based on the amount paid by the buyer, from a party other than the buyer, such as the purchasing system or product manufacturer, in exchange for providing the product to the buyer.

In another embodiment of the present invention, the purchasing system device 300 communicates with the buyer device 200 through the communication network 100 to establish a first price for a product between the buyer and a seller. The purchasing system device 300 also arranges for the buyer to take possession of the product at a retailer, different from the seller, that offers the product for sale at a second price. Verification information, which enables the retailer to authorize the buyer to take possession of the product, is transmitted from the purchasing system device 300 to a retailer device 400. The verification information may be, for example, a one way hash function transmitted to the retailer (either once or periodically). The retailer can then evaluate a redemption code provided by the buyer, using the one way hash function, to determine if the buyer is authorized to take possession of the product.

The verification information may also be, for example, a response to information (sent from the retailer device 400 to the purchasing system device 300) about an attempt to take possession of a product, or a batch of authorized codes sent to the retailer device 400 each night. The buyer provides a payment, based on the first price, to the purchasing system in exchange for the right to take possession of the product at the retailer. The purchasing system, in turn, provides payment to the retailer for allowing the buyer to take possession of the product.

According to another embodiment of the present invention, the purchasing system device 300 arranges for a buyer to purchase a product and transmits redemption information, including a "redemption code," to the buyer device 200, such as through the communication network 100. As used herein, a "redemption code" may be, for example, a unique alphanumeric sequence of digits. In general, however, the redemption code may be anything capable of being identified, such as a one or two dimensional bar code, that represents the right of the buyer to take possession of the product at a retailer. As used herein, the phrase "bar code" includes any machine readable information. The redemption information can also include information that enables the creation of a voucher. For example, a printer attached to a PC may be used to print a voucher including the redemption code.

According to still another embodiment of the present invention, information related to an attempt to take possession of the product, including the redemption code, is sent from a retailer device 400 to the purchasing system device 300. In this case, the purchasing system device 300 sends back a verification, authorizing the buyer to take possession of the product, to the retailer device 400. Although FIG. 1D shows the purchasing system device 300 communicating with the retailer device 400 through the same communication network 100 used by the buyer device 200, those skilled in the art will recognize that a different communication network may be used instead.

A more detailed description of one embodiment of the present invention will now be provided with respect to FIG. 1E. As before, the system 18 includes a number of buyer devices 210 (such as PCs executing browser application software) coupled to a remote purchasing system device 310 (such as a Web server) through the Internet 110. The purchasing system device 310 also communicates through the Internet 110 with a number of seller devices 510 and retailer devices 410. Those skilled in the art will understand that devices in communication with each other need not be continually transmitting to each other. On the contrary, such devices need only transmit to each other as necessary, and may actually refrain from exchanging data most of the time. For example, a device in communication with another device via the Internet may not transmit data to the other device for weeks at a time.

Although embodiments of the present invention will be described with respect to information exchanged using a Web site, according to other embodiments of the present invention information may instead be exchanged using, for example: a telephone; a facsimile machine; e-mail; a WebTV interface; a cable network interface, or a wireless device. Information exchanged between a buyer and purchasing system device 310, as well as between a retailer and the purchasing system device 310, may also use a Voice Response Unit (VRU) or Interactive VRU (IVRU). Examples of IVRUs include the Vision 2001 and the Insight IVR/Web from Interactive Voice Technologies, Corp. and the OmniVox for Windows NT from APEX Voice Communications. An IVRU lets a user of a DTMF (Dual Tone Multi-Frequency) tone generating telephone, also known as "push button" telephone, communicate with a computer. The DTMF signals received from a user's telephone are interpreted by an IVRU server, and the server may also communicate with the user by generating and transmitting voice or other audio signals, such as a list of IVRU menu options.

The purchasing system device 310 arranges for the buyer to purchase the product, for example, when a buyer offer is received from a buyer device 200 through the communication network 100.

Based on the buyer offer information, the purchasing system device 310 may select a particular product (such as a manufacturer and model number) from a plurality of possible products. In addition to the buyer offer information, the purchasing system device 310 may also consider other factors when selecting a particular product, such as, for example: (i) the expected availability of products at retailers; (ii) the actual availability of product at retailers—which may be done by communicating with the retailer devices 410; (iii) retail prices of products at various retailers—which again may be done by communicating with the retailer devices 410; (iv) subsidy information associated with products; and (v) retailer settlement prices. As used herein, a "subsidy" is an amount a party (such as a manufacturer, a retailer or the purchasing system) is willing to contribute towards the buyer's purchase of a product.

The purchasing system device 310 may likewise select one or more retailers from a plurality of possible retailers. In this case, the purchasing system device 310 may consider, for example: (i) the location (e.g., address) of the buyer; (ii) the location of the retailers; (ii) the expected availability of the product at various retailers; (iii) the actual availability of the product at various retailers; (iv) retail prices of the product at the retailers; (iv) retailer subsidy information; and (v) retailer settlement prices.

To determine whether or not the buyer offer is acceptable and/or how the buyer offer will be accepted (e.g., which product at which retailer), the purchasing system device 310 may compare the offer price with the settlement price associated with a product that successfully meets the buyer's offer information. A potential seller may also have a minimum acceptable price, which is the lowest price that the seller (as opposed to the retailer or the purchasing system) will let the product be sold for (e.g., to prevent brand name dilution).

In making this comparison, the purchasing system device 310 may also take into account supplemental price information, such as a manufacturer subsidy amount, a retailer subsidy amount, a purchasing system subsidy amount, and/or a "third-party" subsidy amount associated with the product. As used herein, a third-party subsidy amount may be, for example, an amount that a third-party agrees to provide towards the purchase of a product in exchange for a promise regarding, an action by, or information about the buyer. For example, a credit card issuer may agree to add $50 towards the purchase of a home stereo if a buyer submits a credit card application to the issuer. See, for example, U.S. patent application Ser. No. 08/943,483 filed Oct. 3, 1997 and entitled "System and Method for Facilitating Acceptance of Conditional Purchase Offers", the entire contents of which are hereby incorporated by reference.

According to embodiments of the present invention, the purchasing system device 310 arranges for the buyer to take possession of the product at a retailer. This may be done, for example, by sending to the buyer redemption information, including a redemption code such as a "pseudo" credit card number, debit card number or a checking account number. A redemption code may be a "pseudo" credit card number if, for example, it can be entered into (and processed by) a retailer device, such as a Card Authorization Terminal (CAT) device, as if it was a real credit card number. In this case, the purchasing system device 310 may authorize the buyer to take possession of the product using a credit authorization request received from a credit card processing system device 610.

The redemption information can also include a condition that must be met by the buyer, such as a geographic limitation or an expiration date. Penalty information, such as a 10% increase in the price of the product charged to the buyer, may also be included in the event the buyer violates one of the conditions of the sale. The redemption information may also enable the creation of a coupon-like voucher. For example, the redemption information may let the buyer print out a voucher that can be presented to the retailer when taking possession of the product.

Note that the redemption information may include information associated with a number of products, as well as a number of retailers. For example, a single voucher might indicate that the buyer can take possession of a VCR at either of three local retailers. In this case, the redemption code may be redeemable for one of several different products, depending on the retailer at which the buyer takes possession of the product. Accordingly, the redemption information (e.g., a voucher), may include several different Stock Keeping Unit (SKU) numbers, model names and/or model numbers. According to another embodiment, the voucher may include several separate products (e.g., a television or a VCR) or several equivalent products (e.g., several different television brands, more than one of which may be available at a single retailer).

The redemption information may also include supplemental offer information. For example, the voucher may include an offer to purchase a pack of three VCR tapes for $1 to the buyer if the buyer takes possession of the VCR at a particular retailer.

When the buyer presents the voucher to a retailer, the retailer device 410 sends information related to an attempt to take possession of the product (such as the redemption code included on the voucher) to the purchasing system device 310. The retailer devices 410 may comprise, for example, inventory systems that periodically update the purchasing system device 310 and/or Point Of Sale (POS) devices, such as a POS controller that communicate with POS terminals (not shown in FIG. 1B) and the purchasing system device 310 during the redemption process. A POS terminal may include an optical bar code scanner to read bar codes on products and/or vouchers and a card reader to read cards such as magnetic strip cards that have magnetizable strips or surfaces on which data can be recorded. One such card reader is the OMNI™ 1450 payment terminal, manufactured by VeriFone, Inc., which includes a built-in, magnetic-stripe reader, a Personal Identification Number entry pad (e.g., one used buy a buyer to enter a debit card PIN) and an integrated smart card reader.

The purchasing system device 310 may communicate with the retailer device 410 in substantially real time during the redemption of a voucher. That is, a POS controller may connect to the purchasing system device 310 when a buyer is attempting to take possession of the product. In another embodiment, the retailer device 410 and the purchasing system device 310 communicate periodically, such as every night at midnight. For example, the purchasing system device 310 may communicate with each retailer device 410 each day regarding buyer redemption codes, redeemable at the retailer, that have been issued. Likewise, the retailer device 410 can in turn transmit to the purchasing system device 310 a list of the redemption codes that have been redeemed at the retailer that day. In some embodiments, the retailer is the seller who accepts a buyer's offer. In such an embodiment, the retailer device 410 could also perform the function of, or be in communication with another server that performs the function of, a potential seller. For example, the retailer device 410 may be in communication with or perform at least some of the functions of the seller device 510.

When the retailer device 410 sends information related to an attempt to take possession of the product (such as a redemption code) to the purchasing system device 310, the information can be used to authorize the buyer to take possession of the product. That is, the purchasing system device 310 can send a verification back to the retailer device 410 authorizing the retailer to let the buyer take possession of the product. The purchasing system device 310 may also provide a payment to the retailer in exchange for providing the product to the buyer. In this case, of course, the amount paid to the retailer may or may not be equal to the offer amount paid by the buyer. For example, suppose the purchasing system arranges for a buyer to purchase a television for $300, and the buyer takes possession of the television at a retailer (one of several indicated on the voucher) that typically sells that television for $320. In this case, the purchasing system may pay the full retail price (i.e., $320) to the retailer.

The purchasing system device 310 may communicate with the seller devices 510, for example, to send information about a buyer offer in attempt to find a seller. The purchasing system device 310 may also communicate with the seller devices 510 to determine and distribute seller amounts (e.g., the amount owed to or due from the seller as a result of a sale made through the purchasing system). Such a determination and distribution may be made, for example, on a sale-by-sale or periodic (e.g., batch) basis.

Note that some or all of the actions associated with the purchasing system device 310 may be performed by a retailer, a product manufacturer, or a party other than the retailer and product manufacturer.

Buyer Device

FIG. 2 illustrates a buyer device 210 that is descriptive of the buyer device shown in FIG. 1E according to one embodiment of the present invention. The buyer device 210 comprises a processor 220, such as one or more Pentium® processors, coupled to: a communication port 240 configured to communicate through a communication network (not shown in FIG. 2); an input device 242 (such as a keyboard or mouse); a display 244; and a printer 246. The communication port 240 may be used to communicate with, for example the purchasing system device 310.

By way of example, the program may be a Web browser application used by a buyer to "visit" a purchasing system Web site. The buyer can arrange with the purchasing system to purchase a product from a seller at a first price, and to pay an amount based on the first price to the purchasing system. The buyer may receive redemption information from the purchasing system, such as information that lets the buyer print out a voucher using the printer 246. The buyer could then provide the voucher to a retailer that offers the product for sale at a second price and take possession of the product.

The printer 246 shown in FIG. 2 is optional. If the buyer device 210 does not have the printer 246 attached, the buyer may write down a redemption code. For example, the buyer may write down a redemption code and input it using a kiosk at the retailer. The kiosk could then communicate with the purchasing system device 310, such as through an Internet connection, and print a voucher for the buyer.

According to another embodiment of the present invention, the buyer can take possession of the product without using a printed voucher. For example, the buyer may simply tell the POS terminal operator the redemption code. The operator inputs the redemption code using the POS terminal and the process continues as if the buyer had used a printed voucher. Also, if the buyer stores the redemption code in the buyer device 210 or a portable buyer device (e.g., a PDA or magnetic stripe card), the buyer may communicate the redemption code directly from the buyer device to the POS terminal, such as by using an Infra-Red (IR) communication link.

Purchasing System Device

FIG. 3 illustrates a purchasing system device 310 that is descriptive of the purchasing system device shown in FIG. 1E according to one embodiment of the present invention. The purchasing system device 310 comprises a processor 320, such as one or more Pentium® processors, coupled to: a communication port 340 configured to communicate through a communication network (not shown in FIG. 3); an input device 342 (such as a keyboard or mouse); a display 344; and a printer 346. The communication port 340 may be used to communicate with, for example: (i) a plurality of seller devices 510; (ii) a plurality of buyer devices 210; and/or (iii) a plurality of retailer devices 410. The sellers may comprise, for example, product manufacturers and/or retailers. The buyers may comprise, for example, individuals who access a Web site and submit offers to purchase products (i.e., buyer offers). Such a Web site could be hosted by a server at the purchasing system device 310 or hosted by a server coupled to the purchasing system device 310.

The processor 320 is also in communication with a data storage device 330. The data storage device 330 (as well as the other storage devices disclosed herein) may comprise any appropriate combination of magnetic, optical and/or semiconductor memory, and may include Random Access Memory (RAM), Read-Only Memory (ROM) and/or a hard disk. The processor 320 and the storage device 330 may each be (i) located entirely within a single computer or other computing device; (ii) connected to each other by a remote communication medium, such as a serial port cable, telephone line or wireless frequency transceiver; or (iii) a combination thereof. In one embodiment, the purchasing system device 310 may comprise one or more computers that are connected to a remote server computer for maintaining databases.

The data storage device 330 stores a program 325 for controlling the processor 320. The processor 320 performs the instructions of the program 325, and thereby operates in accordance with the present invention, and particularly in accordance with the methods described in detail herein. For example, the processor may arrange through the communications port 340 for a buyer to purchase a product from a seller at a first price, and to take possession of the product at a retailer, different from the seller, that offers the product for sale at a second price. The processor 320 may also arrange for the purchasing system to receive from the buyer a payment of an amount based on the first price, and arrange for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer.

The program 325 (as well as the other programs disclosed herein) may be stored in a compressed, uncompiled and/or encrypted format. The program 325 furthermore includes program elements that may be necessary, such as an operating system, a database management system and "device drivers" used by the processor 320 to interface with peripheral devices. Appropriate device drivers and other necessary program elements are known to those skilled in the art and are not described in detail herein.

As shown in FIG. 3, the storage device 330 also stores: a product database 700 (described in detail with respect to FIG. 7); a subsidy database 800 (described in detail with respect to FIG. 8); a settlement price database 900 (described in detail with respect to FIG. 9); a retailer database 1100 (described in detail with respect to FIG. 11); a seller database 1200 (described in detail with respect to FIG. 12); an accepted offer database 1300 (described in detail with respect to FIG. 13); a retailer account database 1400 (described in detail with respect to FIG. 14); a seller account database 1500 (described in detail with respect to FIG. 15); a third party subsidy database 2300 (described in detail with respect to FIG. 23); and a third party account database 2400 (described in detail with respect to FIG. 24). The schematic illustrations and accompanying descriptions of these and other databases presented herein are exemplary, and any number of other database arrangements could be employed besides those suggested by the figures.

As will now be described, the purchasing system device 310 shown in FIG. 3 lets a buyer establish a price for a product online (e.g., through the Internet) with a seller (e.g., a product manufacturer or a retailer) before taking possession of, or "picking up," the product at a convenient retailer. The purchasing system device 310 may issue the buyer a redemption code, such as code included on a printed voucher, that is redeemable for the product at one or more "participating" local retailers. That is, the purchasing system has agreements with these retailers such that the retailers agree to honor purchasing system vouchers for specific products.

According to an embodiment of the present invention, each participating retailer establishes "settlement prices" for those products it will exchange for vouchers. The settlement price is the amount that the purchasing system must provide to the retailer in exchange for honoring a voucher. A retailer may set the settlement price below, at or above the product's retail price. The retailer may, for example, set the settlement price below the retail price for a give product to increase the likelihood of the purchasing system accepting a buyer's offer for the product and arranging for the buyer to take possession of the product at the retailer, thus generating additional traffic for the retailer (i.e., the buyers who come to the store to take possession of product purchased through the purchasing system).

In another embodiment of the present invention, a product manufacturer (acting as a seller) can bypass a retailer's pricing structure and establish a price for a product directly with a buyer without the burden of delivering the product to the buyer. Similarly, an embodiment of the present invention lets a retailer (acting as a seller) establish a price for a product with a particular buyer without lowering the price for the product typically charged at a retail store. This can attract new buyers without giving a discounted price to all customers who visit the retail store.

According to an embodiment of the present invention, the purchasing system device 310 arranges for a buyer to purchase a product from a seller at a first price. This may be done, for example, by receiving a buyer offer, included a buyer-defined first price, and information about the product to be purchased. Note that, as used herein, information may be "received" by, for example: (1) the purchasing system device 310 from a buyer device 210; or (2) a software application or module within the purchasing system device 310 from another software application, module or any other source. The purchasing system device 310 may then decide whether or not a buyer offer will be accepted or information about the buyer offer may be routed to one or more seller devices 510. Systems and methods related to such a decision are more filly described in U.S. patent application Ser. No. 09/337,906 filed Jun. 22, 1999 and entitled "Purchasing Systems and Methods Wherein a Buyer Takes Possession at a Retailer of a Product Purchased Using a Communication Network".

A buyer offer received by the purchasing system device 310 may include, for example: (i) product requirements; (ii) a buyer-defined offer price; and (iii) a payment identifier (e.g., a credit card account number). The buyer can specify product requirements by providing, for example: (i) a category of product (e.g., a television); (ii) a class of product (e.g., class 1 encompassing the top three manufacturers or all 21 inch screen televisions); (iii) a product manufacturer of a product; (iv) a model number of a product; and/or (v) features that the product must include (e.g., surround sound).

The buyer's product requirements determine which products stored in the product database 700 (if any) can be used to accept the buyer offer. If the purchasing system device 310 finds a product that matches the buyer's offer, the purchasing system device 310 decides whether or not to accept the offer (such as by comparing the buyer price, adjusted for any subsidies, with the settlement price).

According to another embodiment of the present invention, the purchasing system device 310 arranges for a buyer to purchase a particular product by offering a product at a seller-defined price to the buyer. The buyer then simply indicates that the price is acceptable and arranges to purchase the product (e.g., by providing a payment identifier). According to still another embodiment of the present invention, the purchasing system offers a product having at least one product requirement (e.g., a 27" television and surround sound from a well-known manufacturer) at a seller-defined price to the buyer without specifying the particular product that will be used to fulfill the requirement. In this case, the product requirements may be selected by the buyer, the purchasing system or a seller.

The purchasing system device 310 also arranges for a buyer to take possession of the product at a retailer that offers the product for sale at a second price. This may be done, for example, by sending redemption information to the buyer, including a redemption code and information that enables the creation of a purchasing system voucher.

According to an embodiment of the present invention, the purchasing system receives from the buyer a payment of an amount based on the first price. The payment may be received, for example, using a payment identifier supplied by the buyer. The payment may be received, for example, at a time based on when the purchasing system device arranges for the buyer to purchase the product. The payment may instead be received, if desired, at a time based on when the buyer takes possession of the product at the retailer (in which case the buyer may not be charged interest until after he or she takes possession of the product).

The purchasing system device 310 also arranges for the retailer to receive payment of an amount based on a settlement price in exchange for providing the product to the buyer, such as by communicating with the retailer device 410.

Retailer Device

FIG. 4 is a block schematic diagram of a retailer device 410 according to an embodiment of the present invention. The retailer device 410 includes a processor 420 (e.g., one or more Pentium® computers) coupled to: a communication port 440 (which may be used to communicate through a communication network, not shown in FIG. 4); an input device 442 (such as a keyboard, a mouse, a touch screen, an entry pad, a bar code reader, a magnetic stripe reader and a smart card reader); a display 444 (such as a monitor or alphanumeric display); and a printer 446 (such as a printer capable of printing a receipt or coupon). The processor 420 is also coupled to a storage device 430 that stores a program 425 containing instructions adapted to be executed by the processor 420 to perform at least one embodiment of the present invention.

The processor 420 of the retailer device 410 may also communicate with a POS controller and/or a number of POS terminals (not shown in FIG. 4). In another embodiment, the retailer device 410 itself may be a POS controller or a POS terminal.

As shown in FIG. 4, the storage device 430 also contains a pricing database 1600 (described in detail with respect to FIG. 16); an accepted offer database 1700 (described in detail with respect to FIG. 17); and a purchasing system account database 1800 (described in detail with respect to FIG. 18).

The accepted offer database 1700 may include, for example, buyer offers made through the purchasing system that have been accepted. The purchasing system account database 1800 may include, for example, an amount of payment expected in exchange for providing a product to a buyer. The pricing database 1600 may include, for example: the products the retailer will provide to buyers that purchase the product through the purchasing system: a retail price for each of those products; and a settlement price for each of those products. The settlement price may be used, for example, to determine the amount of payment the retailer expects from the purchasing system in exchange for providing a product to a buyer. If the retailer is the seller that accepted a buyer offer, the settlement price may not be needed.

In addition, a retailer that participates in the purchasing system as both a seller and a product provider may need to determine, when a given product is being provided to a buyer, whether or not the retailer is acting as the seller. This may be done using a database or by communicating with the purchasing system device 310. For example, a retailer may both: (i) sell a particular television through a purchasing system; and (ii) let buyers, who purchased the television through the purchasing system from a different seller, take possession of the television at the retailer's store. In this case, when a buyer visits the retailer to take possession of a product, it must be determined whether the retailer should receive from the purchasing system: (i) a seller price (which may be equal to or based on the first price established by the buyer through the purchasing system); (ii) the buyer price (if the retailer, acting as a seller, sold the television to the buyer through the purchasing system); or (iii) the settlement price (if the retailer is merely letting the buyer take possession of the television at the retailer's store).

Seller Device

FIG. 5 is a block schematic diagram of a seller device 510 according to an embodiment of the present invention. The seller device 510 includes a processor 520 (such as one or more Pentium® processors) coupled to: a communication port 540 (which may be configured to communicate through a communication network, not shown in FIG. 5); an input device 542 (such as a keyboard or mouse); a display 544 (such as a monitor); and a printer 546 (such as a laser printer). The processor 520 is also coupled to a storage device 530 that stores a program 525 containing instructions adapted to be executed by the processor 520 to perform at least one embodiment of the present invention.

The seller device 510 communicates with the purchasing system device 310 using the communication port 540, for example, to send information to be added to the product database 700. The information may include, for example: (i) what products the seller wants sold through the purchasing system; (ii) the settlement price that the seller is willing to accept for each of the products (if the seller is the retailer); (iii) in one embodiment, the quantity of a product that is available for sale through the purchasing system and/or the region in which the product or quantity of the product is available; and (iv) a minimum acceptable price (e.g., when the seller is a product manufacturer). The seller device 510 may receive such data from the seller's personnel via the input device 542. Alternatively, the seller device 510 may, based on a program or subroutine, determine: (i) what products to offer for sale through the purchasing system; (ii) the settlement prices for those products; and (iii) the quantity and regions of availability of the products. The seller device 510 may make such a determination based on, for example, the seller's current inventory and revenue management rules or predetermined rules input by the seller's personnel. Note that the seller may determine which products to offer a subsidy amount for based on current or predicted sales or other market conditions (e.g., a new model being introduced). The seller may also indicate subsidy information on a transaction basis (e.g., how much of a subsidy the seller is willing to provide for each product sold through the purchasing system) and/or on a product basis (e.g., a maximum amount the seller is willing to provide across a number of products sold).

The seller device 510 additionally receives data from the purchasing system device 310 through the communication port 540. The received data may include: (i) the amount of payment owed by (or due to) the seller for products sold through the purchasing system; and (ii) reports regarding the demand for products and prices offered for the products from buyers using the purchasing system device 310. Such data may be provided to the seller's personnel on the display 544 or reports printed out with the printer 546.

As shown in FIG. 5, the storage device 530 also contains a seller product database 1900 (described in detail with respect to FIG. 19), which may identify the products available for sale through the purchasing system device 310. The seller device 510 may also store the "collected demand" for products (or for product descriptions that match the seller's products) directly as buyer offers are received from the purchasing system device 310. For example, the purchasing system device 310 may have 100 outstanding offers for a particular television model at a certain average price. While a seller may not wish to sell a single television at that price, it may agree to do so because the sale will involve 100 televisions (and therefore provide sufficient profit).

According to one embodiment of the present invention, when a buyer offer is received by the seller device 510, the seller device 510 queries the seller product database 1900 to determine, for example, whether: (i) there is a record whose product description successfully fulfills the product specified in the buyer's offer; and (ii) the offer price is at least equal to minimum acceptable price for that product. If the query results in a product that fulfills the buyer's offer, the seller accepts the offer and transmits the acceptance to the purchasing system device 310.

A seller may add inventory to the seller product database 1900 database: (i) automatically, for example, based on market conditions, such as the seller's current inventory or sales data (e.g., how many units of a particular product have sold within a predefined time period); or (ii) manually, on an ad hoc basis (e.g., based on current sales and inventory or on what the seller currently wishes to promote). According to one embodiment, when inventory of a product remains essentially stagnant for a predefined amount of time (i.e., the product is not selling well), the product is automatically made available to the purchasing system or the minimum acceptable price associated with that product may be reduced (such as by 10%).

Note that in the case where the retailer is the seller, the seller device 510 and the retailer device may be the same device, and the storage device 530 may contain the databases shown both in FIGS. 4 and 5. In other words, the functions of the seller device 510 and the retailer device 410 may be combined into one device or divided amongst the seller devices 510 and retailer devices 410 in ways other than described herein.

Credit Card Processing System Device

FIG. 6 is a block schematic diagram of a credit card processing system device 610 according to one embodiment of the present invention. The credit card processing system device 610 includes a processor 620 (such as one or more Pentium® processors) coupled to: a communication port 640 (which may be configured to communicate through a communication network, not shown in FIG. 6); an input device 642 (e.g., a keyboard and mouse); a display 644 (e.g., a monitor); and a printer 646. The processor 620 is also coupled to a storage device 630 that stores a program 625 containing instructions adapted to be executed by the processor 620 to perform at least one embodiment of the present invention.

The credit card processing system device 610 communicates with the purchasing system device 310 and the retailer device 410 using the communication port 640.

As shown in FIG. 6, the storage device 630 also contains an issuer database 2000 (described in detail with respect to FIG. 20); an issuer account database 2100 (described in detail with respect to FIG. 21); and a retailer account database 2200 (described in detail with respect to FIG. 22).

One embodiment of the present invention is directed to the use of a pseudo payment identifier, such as a pseudo credit card number, as a redemption code. In the conventional credit card market, each credit card issuer is assigned a unique four digit identifier. When a customer uses a credit card at a retailer, the retailer transmits the customer's account number (a sixteen digit number) to the credit card issuer through a CAT to authorize the purchase. The retailer authorizes: (i) that the customer has an account with the issuer that is in good standing (e.g., the card has not been reported stolen); and (ii) there is enough available funds in the account to cover the present purchase. The retailer sends the purchase amount, the credit card number, and the retailer identifier along with the request for authorization. The request for authorization is transmitted to a credit card processing system that determines the issuer of the credit card account (using the first four digits of the account number), and, in many cases, forwards the request for authorization to the appropriate issuer. The issuer checks the account, based on the account number received, and sends an approval or denial signal to the credit card processing system, which forwards the signal to the retailer. If the transaction is approved, the issuer may also place a "freeze" on the amount of funds in the customer's account equal to the transmitted purchase amount. As used here, a freeze is any pre-authorization of a charge that will be made to the buyer's account at a later time.

Note that the customer's account has not been actually charged at this point. Subsequently, on a periodic basis (e.g. once per night or week), the retailer sends a Record of Charge (ROC) to the credit card processing system, which transmits the ROC to the appropriate issuer for collection of funds. The credit card processing system transmits the funds received from the issuer to the retailer, and the issuer charges the appropriate customer accounts for the appropriate amounts, based on the received ROC. That is, the freeze or authorization for the purchase amount is removed from the account and replaced with an actual charge. The actual charge may be less than the authorized amount (e.g., the retailer may have authorized more than the actual purchase amount).

Note that the participating retailers may not have a direct (e.g., Internet) connection to the purchasing system. According to one embodiment of the present invention, the retailer uses the credit card networks and methods described above to authorize a redemption code.

For example, the purchasing system may register with the credit card processing system as an issuer, and be assigned a unique four digit code. The purchasing system then issues redemption codes that are in the format of a conventional sixteen digit credit card account code, with the first four digits identifying the purchasing system. When a customer arrives at a retailer to take possession of a product, the retailer enters the redemption code into the CAT as if it was a conventional credit card account number. The retailer transmit the redemption code and an appropriated retailer identifier to a credit card processing system. The credit card processing system recognizes that the purchasing system is the "issuer" of the card (by the first four digits of the redemption code) and transmits a request for authorization to the purchasing system, including the redemption code and the retailer identifier. The purchasing system retrieves the buyer's record, based on the received redemption code, and checks to see whether the redemption code is valid (e.g. has been issued but not yet redeemed), and that the received retailer identifier identifies one of the retailer identifiers stored in association with the redemption code. If so, the purchasing system marks the redemption code as "redeemed" and transmits an approval, or authorization, signal to the credit card processing system, which then forwards it to the retailer. When the retailer receives the authorization, the buyer is authorized to take possession of the product. The retailer may also store the redemption code, product identifier, and other transaction data for subsequent settlement with the purchasing system.

According to another embodiment of the present invention, the retailer treats the purchasing system voucher as a ROC. That is, the retailer periodically sends redeemed purchasing system vouchers to the credit card processing system for collection of funds. The credit card processing system forwards both conventional ROCs and purchasing system vouchers to the appropriate issuer as indicated by account identifiers. Accordingly, the credit card processing system forwards the purchasing system vouchers to the purchasing system.

When the purchasing system receives a voucher, it charges the buyer's account as appropriate. According to one embodiment, the purchasing system freezes the funds in the buyer's account upon accepting the buyer's offer and does not charge the account until it receives the voucher from the retailer. Alternatively, the purchasing system charges the buyer's account: (i) when the buyer's offer is approved; or (ii) when the request for authorization is received from a retailer. The purchasing system transfers the appropriate amount of funds to the retailer (e.g. the total of the settlement prices for the products included on the received vouchers). If necessary, the purchasing system may also collect or transmit funds to the manufacturer at this time.

Note that a retailer may want to determine the validity of a voucher at the POS to prevent fraudulent use, such as over-redemption of a voucher, by unscrupulous buyers. For example, consider a buyer who establishes a $200 price with a manufacturer for a television. A hold is put on the buyer's credit card for $200, and a voucher for the television is issued to the buyer. The buyer prints out three copies of the voucher and redeems all three at various retailers, and each of the retailer settles with the purchasing system device 310 off-line or through a back channel at the end of the day. The purchasing system device 310 determines that it now owes the retailers an additional $400 (for the two additional, unauthorized transactions). However, the purchasing system device 310 may find that the additional $400 charge cannot be authorized because the buyer is over his or her credit limit. One advantage of the embodiments of the present invention that utilize the banking network to verify redemption codes is that a retailer can verify a redemption code at the POS without additional equipment other than what the retailer typically uses in conventional transactions. According to this embodiment, the retailer may communicate with the purchasing system 310 at the time of redemption over the existing banking network using a CAT that is typically connected to each POS at the retailer. Of course, the retailer may instead communicate directly with the purchasing system at the time of redemption through other networks, such as the Internet. Note also that each issued and outstanding pseudo credit card number redemption code may be associated with a unique transaction, and, according to one embodiment of the present invention, the purchasing system device 310 tracks available pseudo credit card numbers. In another embodiment, a printed voucher may include: (i) the issued redemption code in the format of a payment number; (ii) the product identifier and description; and (iii) the retailers at which the redemption code is redeemable. Note that a redemption code may be associated with either a single retailer or a number of retailers.

Product Database

As will now be described, FIG. 7 is a tabular representation of a portion of a product database 700 that may be stored at the purchasing system device 310 (as described with respect to FIG. 3) according to an embodiment of the present invention. The table 700 includes entries defining products that may be sold through the purchasing system. The table 700 also defines fields 702, 704, 706, 708 for each of the entries. The fields specify: a product identifier 702; a minimum acceptable price 704; a seller identifier 706; and a retailer identifier 708. Those skilled in the art will understand that the table 700 (as well as the other tables discussed herein) may include any number of entries and fields and data arrangements other than that described with respect to FIG. 7 (as well as described with respect to the other FIGS. included herein).

The product identifier 702 may be, for example, an alphanumeric field that uniquely identifies each product available through the purchasing system. The product identifier 702 may identify a specific product (e.g., a particular television), a specific type of product (e.g., a particular product manufacturer and model number), or a plurality of products that fulfill a product requirement (e.g., televisions with 25" to 27" screens).

The minimum acceptable price 704 is the amount below which the product will not be sold. The minimum acceptable price 704 may be set by the seller or by the purchasing system, based on, for example, the settlement price and a subsidy amount provided by the seller. The minimum acceptable price may be used, for example, by a product manufacturer to protect against brand name dilution.

The seller identifier 706 may be, for example, an alphanumeric field that uniquely identifies the seller of the product, and the retailer identifier 708 may be an alphanumeric field that uniquely identifies one or more retailers at which a buyer can take possession of the product associated with the product identifier 702. The retailer identifier 708, which may be provided by the seller, can represent retail stores at which a product is usually available. The retailer identifier may, for example, identify a particular retailer store (e.g., based on retailer name and address) or may identify a chain of sores (e.g., just name, regardless of address). The purchasing system may also generate this list by asking a retail store which products are available at that store. The list could also be based on, for example, the product category (e.g., televisions should be available at a consumer electronics superstore) or historical inventory patterns and trends of known retailers. The list could be based on which retailers have agreed to let purchasing system buyers take possession of the product (corresponding to the product identifier) in exchange for a settlement price. The list could further include retailers who have agreed to act as sellers of the corresponding product. For example, product "132-01" can be obtained at any of the five retailers listed in the retailer identifier 708 (i.e., in the first two records).

According to another embodiment of the present invention, the seller (e.g., the product manufacturer) may also provide a subsidy amount (not shown in FIG. 7). Note that both the purchasing system and the manufacturer may have a minimum acceptable price associated with a product. In this case, both prices may be stored or only the higher of the two prices may be stored.

It should be noted that some products may be picked up at one of several retailers, as indicated by the multiple entries in the retailer identifier field 708. However, if the retailer is the seller, the retailer identifier field may only contain a single entry for that retailer (as shown in the second entry in the table 700).

It should be noted that product "P132-01" has two different associated minimum selling prices, one associated with a retailer seller and one associated with a manufacturer seller (as shown in by the first two entries in the table 700). If the purchasing system generates revenue from the margin between the buyer's price and the settlement price, a buyer offer may be accepted using the lowest possible minimum acceptable price 704. Considering product "P132-01", for example, if a buyer names a price of $200 and one seller has an associated minimum acceptable price 704 of $110 and another seller has a minimum acceptable price 704 of $190, the purchasing system may accept the buyer offer using the seller with the $110 minimum selling price, because that may increase the purchasing system's profit.

The minimum acceptable price 704 may be set by the purchasing system in another embodiment of the present invention based on, for example, the settlement price(s) associated with the product and any subsidy amounts associated with the product. For example, a product having a settlement price of $200 and a subsidy amount of $20 may be assigned a minimum acceptable price 704 of $220.

Subsidy Database

Referring to FIG. 8, a table 800 represents an embodiment of the subsidy database that may be stored at the purchasing system device 310 (FIG. 3). The table 800 includes entries defining products that may be sold through the purchasing system. The table 800 also defines fields 802, 804, 806 for each of the entries. The fields specify: a product identifier 802; a subsidy amount 804; and a seller identifier 806.

In addition to the product identifier 802 (which may be based on, or similar to, the product identifier 702 described with respect to FIG. 7) and the seller identifier 806 (which may be based on, or similar to, the product identifier 706 described with respect to FIG. 7), the table 800 includes the subsidy amount 804 the seller is willing to provide to the purchasing system to subsidize a buyer's purchase of the product. For example, the seller "S13204" shown in FIG. 8 will provide $50 towards a buyer's purchase of a product with the identifier of "P132-01."

Note that a product may be available from different sellers who provide different subsidy amounts. Note also that a seller may in fact offer no subsidy amount for a product. In this case, the product/seller may not be stored in the subsidy database—or may be stored with a subsidy amount 804 of "$0." The seller may also, according to one embodiment of the present invention, provide a maximum subsidy amount per period of time (e.g., $50 per purchase up to $5,000 per month). This information could be tracked by the purchasing system device 310.

According to one embodiment of the present invention, the purchasing system may not need to use all of a subsidy amount (including a subsidy amount from a seller or a third party subsidy amount) to arrange for a buyer to purchase a product. In this case, the portion of the subsidy amount that is not needed may be, for example, kept by the purchasing system (e.g., for an additional profit) or provided to the buyer. According to another embodiment, the portion of the subsidy amount that is not needed for the present transaction may be placed into an account associated with the buyer. In this way, the buyer may be allowed to use this extra amount to subsidize another purchase made through the purchasing system.

Note also that a seller may set a minimum acceptable price (e.g., to prevent name brand dilution) and yet still agree to provide subsidies toward purchases of the product to increase sales volume.

Settlement Price Database

Referring to FIG. 9, a table 900 represents an embodiment of the settlement price database that may be stored at the purchasing system device 310 (FIG. 3). The table 900 includes entries defining products that may be sold through the purchasing system. The table 900 also defines fields 902, 904, 906 for each of the entries. The fields specify: a product identifier 902; a retailer identifier 904; and a settlement price 906.

In addition to the product identifier 902 (which may correspond to, be based on, or similar to, the product identifier 702 described with respect to FIG. 7), the table 900 includes the retailer identifier 904 which uniquely identifies a retailer at which the product is, or should be, available and a settlement price 906 representing the amount that must be provided to the retailer in exchange for providing the corresponding product to the buyer. For example, $150 must be provided to the retailer "R218-99" shown in FIG. 9 in exchange for providing a product with the identifier of "P132-01" to a buyer. Note that a product may be available from different retailers who require different settlement prices.

According to an embodiment of the present invention, the purchasing system device 310 uses this database to determine the amount of payment to be provided to the retailer at which a buyer took possession of a product. In other embodiments, this database may be used by the purchasing system device 310 to select retailers, such as to determine the lowest settlement price associated with a product. For example, if a buyer offer price of $175 was accepted by the manufacturer and retailer A has an agreement to receive $200 for the offered product, while retailer B has an agreement to receive $210, the purchasing system device 310 may determine that the buyer may only take possession of the product at retailer A to minimize the loss to the manufacturer—and possibly to boost revenue earned by the purchasing system for its role as a transaction facilitator.

Note that in addition to an arrangement between the retailer and the purchasing system to specify, for example, a product and the settlement price, the retailer may also have an arrangement directly with a product manufacturer. An arrangement between a retailer and a manufacturer may specify an additional subsidy amount that the manufacturer will provide to the retailer for one or more of the manufacturer's products. This, of course, could result in the retailer agreeing to accept a lower settlement price from the purchasing system.

By way of example, consider a retailer that typically sells a particular manufacturer and model television for a retail price of $200. The retailer can enter into an agreement with the purchasing system to honor vouchers for that television in exchange for a settlement price of $180. The retailer might agree to accept $180 to increase sales, or potential sales, from buyers sent to store by the purchasing system.

The retailer may also make an agreement with the television manufacturer to receive $10 for each television provided to a buyer when a redemption code is redeemed. The manufacturer may, for example, provide such a subsidy to encourage the retailer to agree to a lower settlement price with the purchasing system—increasing the likelihood that the television will be sold through the purchasing system device 310. Note that the settlement price does not need to be less than the retail price, and the manufacturer could provide a subsidy directly to the purchasing system instead of, or in addition to, the retailer.

FIG. 10 illustrates the first record 750 from the product database 700, the first record 850 from the subsidy database 800, and the first four records 950 from the settlement price database 900, to illustrate how a minimum acceptable price may be calculated by the purchasing system device 310.

As shown in the subsidy database record 850, the subsidy amount for the product "P132-01" is $50. As shown in the product database records 950, the settlement prices from various retailers for this product are $150, $145, $160, and $150. Thus, the highest settlement price the purchasing system may have to provide to a retailer for the product is $160. If a buyer takes possession of the product at retailer "R084-34," the purchasing system may need $110 from the buyer to break even on the sale (i.e., $110 from the buyer+$50 subsidy from the manufacturer=$160, which is the settlement price for retailer "R084-34). Accordingly, the purchasing system device 310 set the minimum acceptable price at $110 as shown in the product database record 750. If the buyer takes possession of the product at retailer "R218-99," "R982-19" or "R753-93," the purchasing system would derive a profit of $10, $15, and $10, respectively (assuming the purchasing system keeps the difference).

According to one embodiment of the present invention, the purchasing system only collects an amount required to break even on the transaction (although a separate commission fee may be charged). Thus, the purchasing system may not collect the entire subsidy amount available from the seller, but instead collect only as much as the purchasing system needs to avoid a loss. In other words, the subsidy amount may be a maximum subsidy amount that the purchasing system may collect.

The purchasing system may even determine that a loss is acceptable on some transactions, and thus lower the minimum acceptable price. The purchasing system may, for example, determine the minimum acceptable price based on an average or lowest settlement price.

Retailer Database

Referring to FIG. 11, a table 1100 represents an embodiment of the retailer database that may be stored at the purchasing system device 310 (FIG. 3). The table 1100 includes entries defining a particular retailer at which a buyer make take possession of a product purchased through the purchasing system. The table 1100 also defines fields 1102, 1104, 1106, 1108 for each of the entries. The fields specify: a retailer identifier 1102; a retailer name 1104; a retailer type 1106; and a retailer address 1108.

The retailer database 1100 may be used by the purchasing system device 310 to retrieve information about a retailer. In particular, the retailer database 1100 may store identifiers and contact information of retailers, as well as the retailer type 1106 reflecting whether only a single store (as opposed to or all stores) in a chain participate in the purchasing system program. According to another embodiment of the present invention, instead of indicating which individual stores in a chain participate, the retailer database 1100 may store an indication which stores in a chain do not participate, or store a separate table of all available stores in a chain.

The purchasing system device 310 can use this database, for example, to retrieve retailer contact information to be printed on the voucher. The information may be also used to determine if a retailer is close enough to a buyer to be included on the voucher, using algorithms which are well known in the art.

Seller Database

Referring to FIG. 12, a table 1200 represents an embodiment of the seller database that may be stored at the purchasing system device 310 (FIG. 3). The table 1200 includes entries defining a seller that sells products through the purchasing system. The table 1200 also defines fields 1202, 1204, 1206 and 1208 for each of the entries. The fields specify: a seller identifier 1202; a seller name 1204; a seller type 1206; and a seller address 1208.

The purchasing system device 310 may use the seller database 1200 to determine the seller type (i.e., whether the seller is a manufacturer or a retailer) and other information pertaining to a seller (such as the seller address for offer routing purposes or billing).

The seller database 1200 may be used, for example, to determine whether a number of settlement prices (in the case of a manufacturer seller type) or a single price (associated with a retailer seller type) should be used when determining whether or not a buyer offer will be accepted. In addition, when the purchasing system authorizes a retailer to provide a product to a buyer, this database may be used to determine whether or not the seller is the retailer (such as by using the seller type 1206). In the case of a seller other than the retailer, the settlement price is provided to the retailer. On the other hand, when the retailer also acted as the seller, a seller price (which may be based on, or equal to, the first price) may instead be provided to the retailer. If the seller was a retailer—but not the same retailer at which the buyer took possession of the product—the settlement price may still be provided to the retailer at which the buyer took possession of the product.

Accepted Offer Database (Stored at Purchasing System Device)

Referring to FIGS. 13A and 13B, a table 1300 represents an embodiment of the accepted offer database 1300 that may be stored at the purchasing system device 310 (FIG. 3). The table 1300 includes entries defining a transaction (i.e., a buyer's purchase of a product through the purchasing system). The table 1300 also defines fields 1301, 1302, 1304, 1306, 1308, 1310, 1312, 1314, 1316, 1317, 1318, 1320, 1322, 1324 for each of the entries. The fields specify: an offer identifier 1301; a redemption code 1302; a buyer name 1304; a buyer e-mail address 1306; a buyer postal address 1308; a buyer's price 1310; an offer status 1312; a seller identifier 1314; an authorized retailer identifier 1316; a redemption retailer identifier 1317; a product identifier 1318; an authorized amount 1320; a charged amount 1322; and a payment identifier 1324.

When a buyer offer is accepted by a seller, or fulfilled by the purchasing system, the purchasing system device 310 may communicate the acceptance to the appropriate buyer device 210 and store the details of the accepted offer in the accepted offer database 1300. For example, the offer identifier 1301, the redemption code 1302, the buyer name 1304, the buyer e-mail address 1306, the buyer postal address 1308, the buyer's price 1310, the seller identifier 1314, the authorized retailer identifier 1316, the product identifier 1318 and the payment identifier 1324 may all be stored at this time. In addition, the offer status 1312 may be updated at this time (e.g., to "accepted").

The purchasing system device 310 may then collect payment from the buyer, such as by using the payment identifier 1324. For example, a bold may be immediately placed on the buyer's funds (e.g., authorizing a credit line of the credit card account) for the offer price and the amount authorized 1320. The buyer's account may not actually be charged, as reflected in the charged amount 1322, until the buyer takes possession of the product. The purchasing system device 310 may instead charge the buyer's account when the offer is accepted, if desired.

It should be noted that the amount of funds charged or put on hold (i.e., authorized or "frozen") may be greater than the offer price. For example, an expected sales tax, such as a tax based on the buyer's home address, may be added to the offer price. In addition, the amount of frozen funds may be greater than offer price to account for unforeseen circumstances that may subsequently occur. For example, a penalty may be imposed on the buyer if the buyer does not take possession of the product by a certain date or within a predetermined period of time. The amount of the penalty, in this case, may be based on a cost associated with shipping the product to the buyer.

As a result, in one embodiment of the present invention, if the purchasing system device 310 charges the buyer's account when the offer is accepted, the charged amount 1322 may not be correct based on the actual redemption conditions of the transaction at the retailer. For example, the retailer may determine that the buyer has waited too long to take possession of the product and a penalty amount needs to be assessed to the buyer. In this case, the purchasing system device 310 may place an additional charge on the buyer's account to correct the amount.

In another example, the buyer may arrive at the retailer to take possession of a product purchased through the purchasing system only to realize that the retailer is currently offering the product at a clearance price below the first price (e.g., the price the buyer agreed to pay for the product through the purchasing system). The purchasing system may have not been aware of the retailer's plans to offer the product at the clearance price which the first price was established with the buyer. In such a case, the purchasing system may determine the difference between the clearance price and the first price and refund the buyer the difference (plus any resulting difference in the sales tax). The settlement system may provide such a refund to the customer by placing a credit equal to the difference (and any difference in sales tax) onto the buyer's financial account that was originally charged for the purchase.

If any penalty is imposed on the buyer the penalty amount could be disbursed to, for example: (i) the settlement system; (ii) the retailer at which the buyer takes possession of the product; (iii) the retails at which the buyer could have taken possession of the product; (iv) the seller (e.g., a product manufacturer); or (v) any combination thereof.

According to an embodiment of the present invention, collecting payment (based on the actual redemption conditions) may comprise charging the offer price using the payment identifier 1324 (e.g., associated with a credit card account, debit account, checking account or electronic currency protocol) provided with the buyer offer. According to another embodiment, the appropriate amount is charged to a financial account provided by the buyer at the retailer (which may be different from the payment identifier stored in this database) when the buyer takes possession of the product.

Note that when a buyer goes to a retailer to take possession of a product, it is possible that he or she will find that the retailer's in-store price is less than the price arranged with the purchasing system (e.g., the item may be on sale). In this case, the purchasing system can guarantee, if desired, the buyer that he or she will be charged the lower of the two prices. Thus, the purchasing system device 310 may compare the product's retail price at the time of redemption with the buyer's price 1310, and make sure that the buyer's financial account is only charged the lower of the two prices. In the case where the buyer was charged for the product at the time the sale was arranged with the purchasing system, the purchasing system may credit the difference back to the buyer's account.

Additionally, the purchasing system device 310 may distribute payment, such as by using an Electronic Fund Transfer (EFT) transaction, to the retailer that provided the product to the buyer (i.e., one of the retailers listed in the authorized retailer identifier 1316) when the purchasing system receives an indication that the buyer has taken possession of the product. If the buyer offer was accepted by a seller (besides the retailer), the purchasing system device 310 can also collect any payment necessary (e.g., a subsidy from the manufacturer). For example, this may be the case when the amount paid to the retailer by the purchasing system exceeds the buyer's price 1310.

The purchasing system device 310 might also collect an additional payment from the seller as a "commission fee" for handling the offer. Such a commission fee could, of course, comprise a fixed percentage of the buyer price (or seller, settlement or retail price) and/or a flat fee.

The purchasing system device 310 may also track the fulfillment, acceptance, and redemption of buyer offers. According to the present invention, the purchasing system device 310 collects and disburses payment for products sold through the system as appropriate. For example, the purchasing system device 310 may: (i) collect payment from a buyer when the buyer's offer is fulfilled by a seller; (ii) disburse payment for the product to the retailer at which the redemption code is redeemed; and (iii) collect a commission fee from the seller that accepted the buyer's offer.

Because a particular redemption code may be redeemable at several retailers, the disbursement of payment may be finalized once the buyer takes possession of the product at a local retailer. That is, when the purchasing system device 310 determines that the buyer has taken possession of the product (e.g., a retailer notifies the purchasing system device 310, either in substantially real time or periodically, of the redemption codes that have been redeemed in their stores), the collection and disbursement of funds between the appropriate parties is finalized and the offer status 1312 is updated as appropriate (e.g., to "redeemed" for the redemption code 1302).

Note that, as illustrated in FIGS. 13A and 13B, the buyer's price 1310 (e.g., the price the buyer established when arranging to purchase the product to the purchasing system) may be different than the authorized amount 1320. For example, the transaction having an offer identifier 1301 of "O332-001" involved a buyer's price of $300 and an authorized amount of $330. The extra $30 may act as a cushion against conditions, unforeseen at the time the buyer established the price, that may exist when the buyer takes possession of the product (e.g., the an unexpected tax amount). Similarly, the charged amount 1322 of $319.50 may be yet another amount, based on the conditions that actually existed when the buyer took possession of the product. Note that, in the embodiment where the buyer is charged at the time of acceptance of a buyer offer, instead of an "authorized amount" and "charged amount" an "initial charged amount" and "final charged amount" may be stored instead.

Retailer Account Database (Stored at Purchasing System)

Referring to FIG. 14, a table 1400 represents an embodiment of the retailer account database that may be stored at the purchasing system device 310 (FIG. 3). The table 1400 includes entries defining a retailer at which a buyer may take possession of a product purchased through the purchasing system. The table 1400 also defines fields 1402, 1404, 1406, 1408, 1410, 1412 for each of the entries. The fields specify: a retailer identifier 1402; a total paid by, to date 1404; a total paid to, to date 1406; a current amount owed by 1408; a current amount due to 1410; and a last billing date 1412.

The retailer account database 1400 may be used by the purchasing system device 310 to track how much has been paid by 1404 the corresponding retailer to the purchasing system, to date, and how much has been paid to 1406 the corresponding retailer from the purchasing system, to date. For example, the retailer having a retailer identifier 1402 of "R192-05" has paid a total of $53,250 to the purchasing system "to date" (e.g., since participating in the purchasing system or the beginning of the current financial year). Moreover, the purchasing system has paid a total of $723,900 to that retailer during this time.

The retailer account database 1400 may also be used to track how much is currently owed by 1408 the corresponding retailer to the purchasing system in relation to the last billing date 1412. This amount may be computed, for example, by totaling the amounts related to each completed purchasing system transaction involving that retailer. Likewise, the retailer account database 1400 may be used to track how much is due to 1410 the corresponding retailer from the purchasing system in relation to the last billing date 1412. Of course, the current amount owed by 1408 and current amount due to 1410 may be associated with different last billing dates, if appropriate. The last billing date 1412 may reflect, for example, monthly, weekly or hourly billing.

In general, the purchasing system device 310 tracks the total of settlement prices for redeemed redemption codes or buyer prices with respect to each retailer (for those transactions where the retailer is the seller). Note that an account with a retailer may instead be settled on a per-transaction basis when the buyer takes possession of the product (e.g., in substantially real time).

Note that instead of having, for example, both the current amount owed by 1408 and a current amount due to 1410 amounts, the purchasing system may instead simply track a "settlement amount" for each retailer that reflects, for example, a positive value when money is due to the retailer and a negative value when money is due to the purchasing system.

Seller Account Database

Referring to FIG. 15, a table 1500 represents an embodiment of the seller account database that may be stored at the purchasing system device 310 (FIG. 3). The table 1500 includes entries defining a seller that may sell a product to a buyer through the purchasing system. The table 1500 also defines fields 1502, 1504, 1506, 1508, 1510, 1512 for each of the entries. The fields specify: a seller identifier 1502; a total paid by, to date 1504; a total paid to, to date 1506; a current amount owed by 1508; a current amount due to 1510; and a last billing date 1512.

The seller account database 1500 may be used by the purchasing system device 310 to track how much has been paid by 1504 the corresponding seller to the purchasing system, to date, and how much has been paid to 1506 the corresponding seller from the purchasing system, to date. For example, the seller having a seller identifier 1502 of "S23456" has paid a total of $567,890 to the purchasing system "to date" (e.g., since participating in the purchasing system or the beginning of the current financial year). Moreover, the purchasing system has paid a total of $55,670 to that seller during this time.

The seller account database 1500 may also be used to track how much is currently owed by 1508 the corresponding retailer to the purchasing system in relation to the last billing date 1512. This amount may be computed, for example, by totaling the amounts related to each completed purchasing system transaction involving that seller. Likewise, the seller account database 1500 may be used to track how much is due to 1510 the corresponding seller from the purchasing system in relation to the last billing date 1512. Of course, the current amount owed by 1508 and current amount due to 1510 may be associated with different last billing dates, if appropriate. The last billing date 1512 may reflect, for example, monthly, weekly or hourly billing.

In general, the purchasing system device 310 tracks the total of seller amounts for redeemed redemption codes. Note that an account with a seller may instead be settled on a per-transaction basis when the buyer takes possession of the product (e.g., in substantially real time).

Pricing Database

Referring to FIG. 16, a table 1600 represents an embodiment of the pricing database that may be stored at the retailer device 410 (FIG. 4). The table 1600 includes entries defining a particular product that may be sold through the purchasing system. The table 1600 also defines fields 1602, 1604, 1606 for each of the entries. The fields specify: a product identifier 1602 (which may be the same identifier used by the purchasing system device 310 or a different identifier); a retail price 1604; and a settlement price 1606.

The pricing database 1600 may be used by the retailer device 410 to determine the retail price 1604 and the settlement price 1606 for each product. In general, the settlement price may 1606 be less than, equal to, or more than the retail price 1604 for a product. The settlement price 1606 may also be based on the retailer price 1604 (i.e., 95% of the retail price for products having a retail price less than $100 and 90% for all other products). In this case, a separate settlement price field 1606 may not be needed or may instead be used to store a formula (e.g., settlement price=1.01×retail price).

The pricing database 1600 may be used by the retailer, for example, to determine the price to be charged to a typical buyer (i.e., the retail price 1604) and the price to be expected from the purchasing system in exchange for providing the product to a buyer when taking possession of a product (i.e., the settlement price) 1606. Whether the retailer will receive the settlement price 1606 may also depend on whether the retailer is acting as the seller.

Accepted Offer Database (Stored at Retailer Device)

Referring to FIG. 17, a table 1700 represents an embodiment of the accepted offer database 1700 that may be stored at a retailer device 410 (FIG. 4). The table 1700 includes entries defining accepted buyer offers wherein the retailer is the seller. The table 1700 also defines fields 1701, 1702, 1704, 1706, 1708 for each of the entries. The fields specify: an offer identifier 1701; a redemption code 1702; a product identifier 1704; a buyer's price 1706; and a status 1708.

Each time the retailer accepts a buyer's offer as a seller, the offer identifier 1701, the redemption code 1702, the product identifier 1704, and the buyer's price (e.g., "first price") 1706 are stored in this database. The status 1708 may also be set to "pending" at this time. The database 1700 may be populated directly by the purchasing system devi