Abstract:
The invention is a system supporting a payment and inspection service used to securely purchase merchandise on an online sale website. A buyer or seller can select using the payment and inspection service. The buyer pays the payment and inspection service, which holds the payment in an escrow account. The seller ships the item to a store where the payment and inspection service is located. The buyer goes to the store and, while being monitored by an agent or employee of the service, the buyer inspects the merchandise. If the buyer accepts the item, he leaves the store with the item and the service releases the payment from the escrow account to the seller. If the buyer does not want to accept the item (he rejects the item), the item is then repacked and returned to the seller, and the service returns the payment, less cost of shipping the item back to the seller, to the buyer.

Description:
RELATED APPLICATION DATA 
       [0001]    This application is a continuation of Ser. No. 11/429,623 filed on May 5, 2006, which was a continuation-in-part application of U.S. application Ser. No. 11/115,881 filed on Apr. 26, 2005, and priority is claimed for this earlier filing under 35 U.S.C. §120. Applicant further incorporates this previous filing by reference. 
     
    
     TECHNICAL FIELD OF THE INVENTION 
       [0002]    A system for securely purchasing items and avoiding fraudulent transactions. 
       BACKGROUND OF THE INVENTION 
       [0003]    The popularity of Internet or online auction and similar sale sites offering items for sale online has grown considerably in recent years. Users of these sites can post items for sale as either an auction selling to the highest bidder or a set sale price. Internet auctions offer a “virtual” flea market with an endless variety of merchandise available for sale accessing an Internet website using a computer. In January 2002, over 32 million Americans visited an online auction site. 
         [0004]    This explosion in e-commerce has fueled a concurrent increase in fraud. Common frauds include late shipments by the seller beyond the agreed shipping date. Another common fraud is a completely fraudulent sale with no merchandise shipped at all. Inferior merchandise or different merchandise from that stated in the posted listing is another frequent fraud. Bogus online pay sites used by the buyer to make the payment with the pay site pocketing the payment is another fraud. Bogus escrow services have also been set up by the seller, buyer, or a third party to steal payment for the item. Fraudulent sellers that do not intend to ship the merchandise is another problem. 
         [0005]    Other frauds frequently encountered on online auctions include bid siphoning. This occurs when a con artist lures bidders off a legitimate auction site by offering to sell the same item for less to the bidder. Shill bidding is another fraud that occurs when a seller bids on his own auction item to increase price. This has been an increasing problem on eBay and other auction sites. Bid shielding is another fraud where a fraudulent buyer submits a very high bid beyond the item&#39;s value. This discourages other bidders from placing bids, but when the bid is nearing its closing, the fraudulent buyer retracts the bid so that a confederate can bid at a much lower price and purchase the item for less than it would have legitimately brought. 
         [0006]    Sale site operators are increasingly concerned with fraud and the potential for fraud, because fraud has an increasing impact on profits of the site providers. For example, eBay has lost significant value because of poor financial performance which is attributable in part to the fraudulent activities surrounding sales on their website. Both buyer and seller frauds occur, but it is seller fraud that most concerns users, and auction fraud is the most common Internet fraud complaint reported. 
         [0007]    One prior art method of addressing this problem is an escrow service. In theory, a buyer uses an escrow service to pay for the goods. The goods are not shipped until the escrow services reports receipt of the funds. The escrow service receives the payment from the buyer and forwards it to the seller only after the buyer confirms satisfactory delivery. However, many escrow services are fraudulent, and the false nature of the service is rarely discovered until the defrauded seller or buyer has already suffered the loss. 
         [0008]    Furthermore, even with legitimate escrow services, there are potential problems for the seller. For example, a buyer may return an item after using it with a claim that it has not been used. For example, a wedding or prom dress actually worn can be returned with the claim that it is not used. Books can be read or even photocopied. Products can be opened or tampered with and parts or accessories removed prior to delivery to the purchaser or prior to return to the seller for a refund. A bogus product, such as a TV chassis filled with weight ballast, can be returned as the genuine item for a refund, or an identical used and/or broken product returned for a full refund. 
         [0009]    There is a need for a method of ensuring satisfactory delivery of items ordered online and payment for those items with little or no chance of fraud by either the seller or the buyer. A method where the item can be inspected and returned without chances of tampering, alteration, or switching would prevent most if not all of these types of frauds. 
       SUMMARY OF THE INVENTION 
       [0010]    The invention is a method for securely inspecting merchandise purchased online prior to the transfer of the funds and completion of the online purchase. The buyer or seller can select use of this service. The service can be paid for by the sale site, a service charge to the buyer or the seller, or a flat rate to the service operator. After the items are purchased online, the items are sent to a storefront payment and inspection site operated by an escrow payment service. The item purchased is shipped to the inspection storefront by FedEx, UPS, DHL, mail, or other shipper. The escrow service receives the payment of the purchase price (and shipping costs) for the item. Notification of shipment and arrival at the storefront is provided to the buyer, and then the buyer goes to the storefront and inspects the purchased item within a predetermined period of time. 
         [0011]    Once at the storefront, the buyer can examine the item purchased and decide whether to accept it or reject the merchandise. The merchandise does not leave the inspection site, and buyer has predetermined time frame to make the purchase decision. The buyer can be monitored by an in-person representative or by camera to assure nothing is done to the merchandise. If the buyer accepts the merchandise, the funds held by the escrow service are released to the seller. If the buyer rejects the merchandise, the funds held by the escrow service are refunded to the buyer, sometimes with an appropriate deduction for shipping. The rejected merchandise is returned to the seller without leaving the control of the payment and inspection service, so the seller can be assured that the item is being returned unused, unaltered, and not switched with other products. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0012]    The objects and features of the invention will become more readily understood from the following detailed description and appended claims when read in conjunction with the accompanying drawings in which like numerals represent like elements and in which: 
           [0013]      FIG. 1  shows an embodiment of the customer window at the payment and inspection site. 
           [0014]      FIG. 2  is a process flow schematic representation of the prior art method for a seller using an online auction website; 
           [0015]      FIG. 3  is a process flow schematic representation of the prior art method for a buyer using an online auction website; 
           [0016]      FIG. 4  is a process flow schematic representation of the method for a seller using an online auction website under the invention; 
           [0017]      FIG. 5  is a process flow schematic representation of the method for a buyer using an online auction website under the invention; 
           [0018]      FIG. 6  is a process flow schematic representation of the prior art method for a seller using an online sale website; 
           [0019]      FIG. 7  is a process flow schematic representation of the prior art method for a buyer using an online sale website; 
           [0020]      FIG. 8  is a process flow schematic representation of the method for a seller using an online sale website under the invention; 
           [0021]      FIG. 9  is a process flow schematic representation of the method for a buyer using an online sale website under the invention 
       
    
    
     DESCRIPTION OF THE PREFERRED EMBODIMENTS 
       [0022]      FIG. 1  shows an embodiment for the inspection site in a store setting. The inspection site  5  can be a counter  10  located in space rented, leased or franchised to a store by the payment and inspection service, such as a FedEx Kinko&#39;s, Office Depot, Wal-Mart, or other similar retail store operation. Or the inspection site  5  can be owned by the service itself as stand-alone operation. The inspection site  5  has a counter  10  with a clerk  15 . The payment and inspection service receives the shipped merchandise  20 , which is made available when the buyer  30  comes to the inspection site  5 . 
         [0023]    Typically, the buyer  30  approaches the clerk  5 , identifies himself to the clerk  15 , and requests the shipped merchandise  20  so he can unpack and inspect the purchased item. The clerk  15  provides access to the shipped merchandise  20  at the counter  10 . The buyer  30  unpacks and inspects the shipped merchandise  420  on the counter  10 . While the buyer  30  unpacks and inspects the shipped merchandise  20 , the clerk  15  and/or a camera surveillance system  17  monitors the buyer  30 . The buyer  30  is not left unmonitored until he accepts the shipped merchandise  20 . If the buyer  30  accepts the shipped merchandise  20 , then the clerk  15  contacts the service so that the purchase funds are released to the seller, less any fees, such as a fee for the service. If the buyer  30  rejects the shipped merchandise  20 , then the clerk  15  repacks the shipped merchandise  20  for return to the seller and contacts the service so that the purchase funds are refunded to the seller, less any amount required for return shipping or other fees, such as a fee for the service. 
         [0024]    Although the inspection site is a store location in the preferred embodiment, numerous alternative embodiments are possible. Rather than a store, the inspection site can simply be a delivery truck with or without a built-in inspection compartment. The inspection site can even be at the buyer&#39;s home or shipping location under observation of the delivery driver or a delivery clerk, or it can be at a shippers&#39; location, such as a UPS or FedEx shipping facility. 
         [0025]      FIG. 2  shows an example of a process flow for listing an item on an online auction under the prior art. The process starts at step  105 . In step  110 , the seller accesses the auction website over the Internet. In step  115 , the seller registers to sell the item and specify any particulars. At this point in the process, the seller will select the mode of payment for the item, specify the shipping procedures, describe the item, set a minimum bid, and select the duration time for the auction. In step  120 , the seller lists the item for auction. Any fees are paid and the seller uploads any available pictures if desired. In step  125 , the seller will engage in dialogue with bidders. Bidders can ask questions about the item or terms for payment or shipment of the item or any other concern by contacting the seller through the auction website, by email, or by phone if the seller has listed a phone number. 
         [0026]    In step  130 , the auction closes at an acceptable price and terms. The buyer&#39;s bid will exceed the minimum amount requested and according to the terms listed on the auction or as agreed to between the buyer and seller. In step  135 , the seller receives the payment from the buyer under the payment choice selected, such as cash, money order, credit card, check, use of an online payment service, or use of an escrow service. If using an escrow service, the escrow service accepts and holds the payment until the buyer approves the item. Only after the buyer communicates approval is the payment tendered to the seller. In step  140 , the item is shipped to the buyer. Under the prior art, shipping is direct to a buyer&#39;s specified address by a shipper, such as FedEx, UPS, DHL, or the U.S. mail. The item is delivered directly to the buyer without any intervention by a third party and only after payment for the item or tendering of the payment to an escrow service. The auction process for the seller then ends at step  45 . 
         [0027]      FIG. 3  is an example of the process flow of the prior art method for a buyer using an online auction website. The process starts at step  205 . At step  210 , the buyer accesses the auction website. In step  215 , the buyer searches the website for the item. This may involve a focused search using a search function on the website to find specific categories of items based on a keyword or phrase, or the search may be simply browsing the website at random and finding an interesting item that attracts the attention of the buyer. In step  220 , the buyer becomes knowledgeable about the item. This may consist of additional research about the item on other Internet websites, consultation with reference books or catalogs, or dialogue with the seller. 
         [0028]    At step  225 , the buyer places a bid on the item. This process may involve an automated bidding process on the website where a maximum bid amount is specified by the buyer, but the actual amount being bid at any one time depends on the amount of the next lower competing bid. The maximum bid is only reached as the bidding approaches the specified maximum up to the maximum specified. In step  230 , the buyer wins the auction by bidding the highest amount that exceeds any specified minimum bid. The buyer must then meet the terms of the bid in step  235 . This can include paying by the required mode (e.g. cash, credit card, money order, cashier check, etc) within a required time frame, meeting any agreed shipping options, or resolving any warranty or security issues or concerns (e.g. use of an escrow service). In step  240 , the buyer receives the shipment. If an escrow service has been used, the buyer has to contact the escrow service after receiving the item so that the payment is released to the seller. In step  245 , the buyer provides feedback on the auction website. Most auction websites promote leaving feedback on users of the site, often both for buyers and sellers, to provide comments on the transaction. The process ends at step  250 . 
         [0029]      FIG. 4  shows the process flow under the invention for the seller. The process begins at step  305 . In step  310 , the seller accesses the auction website over the Internet. In step  315 , the seller registers to sell the item and specify any particulars. At this point in the process, the seller will select the mode of payment for the item, specify the shipping procedures, describe the item, set a minimum bid, select the duration time for the auction, and select secured payment and inspection option. If the payment and inspection service option is chosen, the buyer will have to comply with the service&#39;s terms and select a shipping destination. In step  320 , the seller lists the item for auction. Any fees are paid and the seller uploads any available pictures and if desired. In step  325 , the seller will engage in dialogue bidders. Bidders can ask questions about the item or terms for payment or shipment of the item or any other concern by contacting the seller through the auction website, by email, or by phone if the seller has listed a phone number. 
         [0030]    In step  330 , the auction closes at an acceptable price and terms. The buyer&#39;s bid will exceed the minimum amount requested and according to the terms listed on the auction or as agreed to between the buyer and seller. In step  335 , the payment and inspection service receives the payment. In step  340 , the seller is notified that the payment has been received and is valid with funds available and confirms the shipping address for the store performing the service. The shipping address is selected by the buyer at the time the payment is made or when making the bid. The seller ships the item to the address for the specified payment and inspection service at step  345 . The payment and inspection service may be the shipper (e.g. UPS, FedEx, DHL, etc) or an independent third party. In step  350 , the seller either receives the payment from the payment and inspection service or the returned item. If the buyer accepts the item, then the funds are released to the seller. If the buyer rejects the item, then the funds are returned to the buyer, less return shipping fees. The process ends at step  355 . 
         [0031]      FIG. 4  shows the process flow of the invention for a buyer using an online auction website. The process starts at step  405 . At step  410 , the buyer accesses the auction website over the Internet. In step  415 , the buyer searches the website for the item. This may involve a focused search using a search function on the website to find specific categories of items based on a keyword or phrase, or the search may be simply browsing the website at random and finding an interesting item that attracts the attention of the buyer. In step  420 , the buyer becomes knowledgeable about the item. This may consist of additional research about the item on other Internet websites, consultation with reference books or catalogs, or dialogue with the seller. 
         [0032]    At step  425 , the buyer places a bid on the item. This process may involve an automated bidding process on the website where a maximum amount is specified by the bid, but the actual amount being bid for any amount less than that maximum depends on the amount of the next lower competing bid. The maximum bid is only placed as the bidding approaches the specified maximum. In step  430 , the buyer wins the auction by bidding the highest amount that exceeds any specified minimum bid. The buyer must then meet the terms of the bid in step  435 . This can include paying by the required mode (e.g. cash, credit card, money order, cashier check, etc) within a required time frame, meeting any agreed shipping options, resolving any warranty or security issues or concerns (e.g. use of an escrow service or the payment and inspection service). During this step, the buyer may have the option of selecting the payment and inspection service or the service may be required by the seller. If used, at this step, the buyer selects a store with a shipping address that is provided to the seller for shipping and pays the service by an acceptable means (e.g. check, credit card, debit card, etc). 
         [0033]    In step  440 , the buyer receives notice of shipping and delivery to the payment and inspection service. The shipping service can provide the payment and inspection service at a company store, such as at a FedEx Kinko&#39;s store as one example, but shipping can be by any entity performing that service, such as FedEx, UPS, and DHL, with the inspection service performed in any convenient store location owned, operated and/or licensed by the service. In step  445 , after notification, the buyer goes to the store for inspection and receipt of the item. While an employee or agent of the service is present and observing, the buyer unpacks the item to inspect while remaining in the store and being observed. In step  450 , the buyer accepts or rejects the item. If the buyer accepts the item, then the service releases the payment to the seller. If the buyer rejects the item, then the service issues a credit to reimburse the buyer in an amount equal to the purchase price less shipping costs. The items is repackaged at the store and promptly returned to the seller. In step  455 , the buyer provides feedback on the auction website. The process ends at step  460 . 
         [0034]      FIG. 6  shows an example of a process flow for listing an item for online sale under the prior art. The process starts at step  505 . In step  510 , the seller accesses the sale website over the Internet. In step  515 , the seller registers to sell the item and specify any particulars. At this point in the process, the seller will select the mode of payment for the item, specify the shipping procedures, describe the item, set a sale price, and select the duration time for the sale listing. In step  520 , the seller lists the item for sale. Any fees are paid and the seller uploads any available pictures if desired. In step  525 , the seller will engage in dialogue with potential buyers. Buyers can ask questions about the item or terms for payment or shipment of the item or any other concern by contacting the seller through the sale website, by email, or by phone if the seller has listed a phone number. 
         [0035]    In step  530 , the sale closes at an acceptable price and terms. There may be an option available for an offer below that of the listed sale price that the seller has the option of accepting. In step  535 , the seller receives the payment from the buyer under the payment choice selected, such as cash, money order, credit card, check, use of an online payment service, or use of an escrow service. If using an escrow service, the escrow service accepts and holds the payment until the buyer approves the item. Only after the buyer communicates approval is the payment tendered to the seller. In step  540 , the item is shipped to the buyer. Under the prior art, shipping is direct to a buyer&#39;s specified address by a shipper, such as FedEx, UPS, DHL, or the U.S. mail. The item is delivered directly to the buyer without any intervention by a third party and only after payment for the item or tendering of the payment to an escrow service. The auction process for the seller then ends at step  545 . 
         [0036]      FIG. 7  is an example of the process flow of the prior art method for a buyer using an online sale website. The process starts at step  605 . At step  610 , the buyer accesses the sale website. In step  615 , the buyer searches the website for the item. This may involve a focused search using a search function on the website to find specific categories of items based on a keyword or phrase, or the search may be simply browsing the website at random and finding an interesting item that attracts the attention of the buyer. In step  620 , the buyer becomes knowledgeable about the item. This may consist of additional research about the item on other Internet websites, consultation with reference books or catalogs, or dialogue with the seller. 
         [0037]    At step  625 , the buyer purchases the item by agreeing to pay the listed price or offering to buy for less than the listed price that the seller accepts. In step  630 , the sale ends with the buyer and seller agreeing to any special terms or deviation from the listed price. The buyer must then meet the terms of the sale in step  635 . This can include paying by the required mode (e.g. cash, credit card, money order, cashier check, etc) within a required time frame, meeting any agreed shipping options, or resolving any warranty or security issues or concerns (e.g. use of an escrow service). In step  640 , the buyer receives the shipment. If an escrow service has been used, the buyer has to contact the escrow service after receiving the item so that the payment is released to the seller. In step  645 , the buyer provides feedback on the auction or sale website. Most sale websites promote leaving feedback on users of the site, often both for buyers and sellers, to provide comments on the transaction. The process ends at step  645 . 
         [0038]      FIG. 8  shows the process flow under the invention for the seller. The process begins at step  705 . In step  710 , the seller accesses the sale website over the Internet. In step  715 , the seller registers to sell the item and specify any particulars. At this point in the process, the seller will select the mode of payment for the item, specify the shipping procedures, describe the item, set a price, select the duration time for the sale, and select secured payment and inspection option. If the payment and inspection service option is chosen, the buyer will have to comply with the service&#39;s terms and select a shipping destination. In step  720 , the seller lists the item for sale. Any fees are paid and the seller uploads any available pictures and if desired. In step  725 , the seller will engage in dialogue with potential buyers. Buyers can ask questions about the item or terms for payment or shipment of the item or any other concern by contacting the seller through the sale website, by email, or by phone if the seller has listed a phone number. 
         [0039]    In step  730 , the sale ends at an acceptable price and terms. In step  735 , the payment and inspection service receives the payment. In step  740 , the seller is notified that the payment has been received and is valid with funds available and confirms the shipping address for the store performing the service. The shipping address is selected by the buyer at the time the payment is made or when making the bid. The seller ships the item to the address for the specified payment and inspection service at step  745 . The payment and inspection service may be the shipper (e.g. UPS, FedEx, DHL, etc) or an independent third party. In step  750 , the seller either receives the payment from the payment and inspection service or the returned item. If the buyer accepts the item, then the funds are released to the seller. If the buyer rejects the item, then the funds are returned to the buyer, less return shipping fees. The process ends at step  755 . 
         [0040]      FIG. 9  shows the process flow of the invention for a buyer using an online sale website. The process starts at step  805 . At step  810 , the buyer accesses the sale website over the Internet. In step  815 , the buyer searches the website for the item. This may involve a focused search using a search function on the website to find specific categories of items based on a keyword or phrase, or the search may be simply browsing the website at random and finding an interesting item that attracts the attention of the buyer. In step  820 , the buyer becomes knowledgeable about the item. This may consist of additional research about the item on other Internet websites, consultation with reference books or catalogs, or dialogue with the seller. 
         [0041]    At step  825 , the buyer purchases the item by agreeing to pay the listed price or offering to buy for less than the listed price that the seller accepts. In step  830 , the sale ends with the buyer and seller agreeing to any special terms or deviation from the listed price. The buyer must then meet the terms of the sale in step  835 . This can include paying by the required mode (e.g. cash, credit card, money order, cashier check, etc) within a required time frame, meeting any agreed shipping options, resolving any warranty or security issues or concerns (e.g. use the payment and inspection service). During this step, the buyer may have the option of selecting the payment and inspection service or the service may be required by the seller. If the service is used, at this step, the buyer selects a store with a shipping address that is provided to the seller for shipping and pays the service by an acceptable means (e.g. check, credit card, debit card, etc). 
         [0042]    In step  840 , the buyer receives notice of shipping and delivery at the payment and inspection service. The shipping service can provide the payment and inspection service, such as at a FedEx Kinko&#39;s store, but shipping can be by any entity in that business, such as FedEx, UPS, and DHL, with the inspection service performed in any convenient store location with an inspection location or even at the home or other location. In step  845 , after notification, the buyer goes to the store for inspection and receipt of the item. While an employee or agent of the service is present and monitoring the buyer, the buyer unpacks the item to inspect while remaining in the store and being observed. Alternatively, the inspection location can use a camera surveillance system to monitor the buyer. In step  850 , the buyer accepts or rejects the item. If the buyer accepts the item, then the service releases the payment to the seller. If the buyer rejects the item, then the service issues a credit to reimburse the buyer in an amount equal to the purchase price less shipping costs. The item is repackaged at the store and promptly returned to the seller. In step  855 , the buyer provides feedback on the auction website. The process ends at step  860 . 
         [0043]    While the invention has been particularly shown and described with respect to preferred embodiments, it will be readily understood that minor changes in the details of the invention may be made without departing from the spirit of the invention.