Abstract:
A gift card processing system and method utilizes a clearinghouse to bank, manage, and distribute the gift funds. The card is issued for contributing towards a transaction at a specific issuing merchant. The information (card reference information, value, and issuing merchant) is uploaded to the clearinghouse. The clearinghouse banks the monetary value until the card is used for a transaction. An exchange rate is established for use of the card at an exchange merchant, allowing the cardholder to use the card for a transaction at the exchange merchant. Upon completion of an exchange transaction, the clearinghouse provides payment equaling the amount transacted by the card, including the deducted exchange rate and any respective clearing fee. The balance of the banked card value is provided in payment to the issuing merchant.

Description:
CROSS-REFERENCE TO RELATED APPLICATION 
     This Non-Provisional Utility application claims the benefit of U.S. Provisional Patent Application Ser. No. 61/246,798, filed on Sep. 29, 2009, which is incorporated herein in its entirety. 
    
    
     FIELD OF THE INVENTION 
     The present disclosure generally relates to a merchant gift card use. More particularly, the present disclosure relates to a gift card clearing house method allowing a consumer to use a gift card at a merchant other than the card issued merchant. 
     BACKGROUND OF THE INVENTION 
     A gift card is a restricted monetary equivalent that is issued by retailers or banks to be used as an alternative to a non-monetary gift. Highly popular, they rank as the second-most given gift by consumers in the United States (2006) being the most-wanted gift by women, and the third-most wanted by males. Gift cards have become increasingly popular as they relieve the donor of selecting a specific gift. In the United States, about $80 billion were paid for gift cards in 2006. The recipient of the gift card can use it at his or her discretion within the restrictions set by the issuing agency. 
     A gift card generally resembles a credit card being fabricated of a plastic card that is the size of a credit card. The card is identified by a unique number or code, not usually with an individual name, and thus could be used by anybody. They are managed by a clearing company; utilizing a national or global network for authorization. Some gift cards allow for replenishment of value, thus providing the ability to be used multiple times over the original value. 
     The gift cards may include a barcode or magnetic strip, which is read by an automated card reading machine. The cards may include a pre-established value, or have a value established at the time of purchase. In the latter case, the cashier enters the desired value and a point of sale system uploads the desired value for the card, which is cross-linked to the card ID, to a gift card database at the clearing company. Gift cards generally differ from stored-value cards (for use with machines such as vending machines, photocopiers, public transportation, and the like), which store the value directly on the card via a magnetic strip, an embedded smart circuit, and/or the like. To provide additional security, gift cards may need to be activated by calling a specific access number or entering information on a specific website. 
     Gift cards are divided into “open loop” and “closed loop” cards. The former are issued by banks or credit card companies and can be redeemed by different establishments, the latter by a specific store or restaurant and can be only redeemed by the issuing provider. The latter, however, tend to have lesser problems with card value decay and fees. In either case the giver would buy the gift card, and the recipient of the card would use the value of the card at a later transaction. A third form is the “hybrid closed loop” card where the issuer has bundled a number of closed loop cards; an example is a gift card for a specific mall. 
     Gift cards differ from gift certificates, in that the latter are usually sold as a paper document with an authorized signature by a restaurant, store, or other individual establishment as a voucher for a future service; there is no electronic authorization. A gift certificate may or may not have an expiration date and generally has no administrative fees. 
     One of the limitations of gift cards is that they are generally limited to a single merchant. Gift givers prefer to give gift cards from a single merchant, expressing a form of thoughtfulness in the selection of the gift. Giving a broader gift card, such as a credit card based value card, is considered similar to cash and could be construed as being less considerate. Although giving a specific merchant gift card is considered more thoughtful than giving a broader gift card such as a credit card based value card, doing so may not be preferred by the gift card recipient. Contrarily, giving a specific merchant gift card limits the use of the card by the receiving party to the specific merchant. A further concern is that specific merchant gift cards are considered unsecured debt by bankruptcy courts, and as such can become valueless when a company files for Chapter 11 reorganization. 
     Therefore, a gift card system and method that allows a gift giver to purchase a gift card reflecting a single merchant, give the gift card to a receiving party, and wherein the receiving party can use the gift card at a variety of merchants is highly desirable. 
     SUMMARY OF THE INVENTION 
     The present disclosure is generally directed to a gift card processing method, the method allowing a consumer to make a transaction using the gift card at an alternate merchant rather than the merchant issuing the gift card. 
     In some embodiments, the gift card processing method may include: 
     issuing a merchant issued gift card having a reference and a value titled to be used for a transaction at the issuing merchant; 
     recording the merchant issued gift card reference and the respective value at a clearing company; 
     utilizing the merchant issued gift card to complete a transaction at an exchange merchant, applying an exchange rate or discounted value of the gift card towards the transaction, wherein the exchange merchant is not corporately associated with the issuing merchant; 
     wherein the clearing company transfers a financial sum equivalent to the discounted value of the gift card to the exchange merchant. 
     Another aspect of the present invention provides the clearing company with a clearing fee. The clearing fee is a service fee paid to the clearing house for maintaining the gift card reference and value information and effecting the various transactions 
     In another aspect, the method provides a means for determining a discounted valuation of the card when used for a transaction at the exchange merchant. The discounted valuation can be pre-established, flexible (changing based upon scenarios), dependent upon the merchant, dependent upon issuing merchant compared to exchange merchant, based upon a bidding, and the like. 
     Regarding another aspect, an index can be provided to the consumer providing the discounted valuation of the card respective to each of a plurality of merchants. 
     Yet in another aspect, the clearinghouse provides a balance of the card value to the issuing merchant. The balance of the card value is defined as the original value, minus the clearing fee, minus the discounted valuation. 
     In still another aspect, the gift card maintains a value should the issuing merchant file for reorganization or dissolution. 
     In another aspect, the transaction is effected via a communication through a network. The network can be a private network, a telephone network, a wide area network, an Internet, and the like. The communications can be via a secured network, encoded, and/or utilising any other secured communications means. 
     Continuing with another aspect, the monetary value of the gift card is banked by the clearinghouse. The merchant that sells the gift card to the gifting party transfers the monetary value of the gift card to the clearinghouse. 
     Yet in another aspect, the merchant issued gift card can be sold to the gifting party by either the issuing merchant or a third a party, such as a supermarket, a book store, a convenience store, and the like. 
     These and other features, aspects and advantages of the present invention will become better understood with reference to the following description and appended claims. The accompanying drawings, which are incorporated in and constitute part of this specification, illustrate embodiments of the invention and, together with the description, serve to explain the principles of the invention. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       The invention will now be described, by way of example, with reference to the accompanying drawings, where like numerals denote like elements and in which: 
         FIG. 1  presents an exemplary block diagram representative of a gift card processing system and method in accordance with a first exemplary embodiment of the present invention; 
         FIG. 2  presents a flow diagram detailing the steps respective to the exemplary block diagram of  FIG. 1 ; 
         FIG. 3  presents an exemplary block diagram representative of a gift card processing system and method in accordance with a second exemplary embodiment of the present invention; 
         FIG. 4  presents a flow diagram detailing the steps respective to the exemplary block diagram of  FIG. 3 . 
     
    
    
     Repeat use of reference characters in the present specification and drawings is intended to represent the same or analogous features or elements of the invention. 
     DETAILED DESCRIPTION OF THE INVENTION 
     The following detailed description is merely exemplary in nature and is not intended to limit the described embodiments or the application and uses of the described embodiments. As used herein, the word “exemplary” or “illustrative” means “serving as an example, instance, or illustration.” Any implementation described herein as “exemplary” or “illustrative” is not necessarily to be construed as preferred or advantageous over other implementations. All of the implementations described below are exemplary implementations provided to enable persons skilled in the art to make or use the embodiments of the disclosure and are not intended to limit the scope of the disclosure, which is defined by the claims. Furthermore, there is no intention to be bound by any expressed or implied theory presented in the preceding technical field, background, brief summary or the following detailed description. It is also to be understood that the specific devices and processes illustrated in the attached drawings, and described in the following specification, are simply exemplary embodiments of the inventive concepts defined in the appended claims. Hence, specific dimensions and other physical characteristics relating to the embodiments disclosed herein are not to be considered as limiting, unless the claims expressly state otherwise. 
     A gift card processing system block diagram  100  is illustrated in  FIG. 1  with a supporting gift card processing flow diagram  200  being presented in  FIG. 2 . The gift giver purchases a merchant issued gift card  110  through any merchant, such as a issuing merchant  120  or a secondary gift card vendor, such as a supermarket, a convenience store, a bookstore, and the like. The purchase of the merchant issued gift card  110  is accomplished in accordance with a gift card purchase step  202 . The merchant issued gift card  110  is assigned a unique identifier, such as a 12-16 digit reference number or character set. The merchant issued gift card  110  would include the name or other identifier (such as a logo) of the issuing merchant  120 . In addition, the merchant issued gift card  110  could include an identifier (such as a logo) representative of the clearinghouse  122 . The unique identifier would be provided in a human readable format as well as an electronically readably format. The human readable format is generally an embossed series of characters. The electronically readably format can be provided via a magnetic strip, an embedded programmable circuit, and the like. The merchant issued gift card  110  can have a pre-established value or have a value established at the time of purchase, wherein the gift card value is referenced as $ GC . The value $ GC  of the merchant issued gift card  110  can be adjusted in accordance with transactions, lower than and up to the established, pending value of the merchant issued gift card  110  at the time of the transaction. It is further recognized that the pending value $ GC  of the merchant issued gift card  110  can be increased by purchasing an additional card value and increasing the amount respectively at the clearinghouse  122 . The card reference number, the issuing merchant information, and respective value $ GC  are conveyed to a clearinghouse  122  via an information transfer step  204 . The information transfer step  204  utilizes a communication network  130  for communicating between various locations, such as the issuing merchant  120  and the clearinghouse  122 . The actual monetary amount $ GC  is transferred from the issuing merchant  120  (or other actual card retailer) to the clearing house  122  via any physical or electronic funds transferring means known by those skilled in the art. The value $ GC  of the merchant issued gift card  110  is apportioned into a processing fee $ PF  and a processed value $ PV . The processing fee $ PF  is a small percentage of the initial card value $ GC  provided to the clearinghouse  122  for managing the merchant issued gift card  110  value and effecting any transaction. The clearinghouse  122  received the processing fee $ PF  in accordance with a clearing fee payment step  206 . The effective value $ PV  of the merchant issued gift card  110  is placed into an account for payment of a future transaction in accordance with a gift card valuation banking step  208 . 
     The gift giver presents the merchant issued gift card  110  to a receiving party. The receiving party can utilize the merchant issued gift card  110  to complete a transaction with the issuing merchant  120 , being referred to as a transaction completion step  210 . The merchant issued gift card  110  can be used for a value of up to the gift card value $ GC . For a transaction utilising the maximum value of the merchant issued gift card  110 , the issuing merchant  120  receives an amount being the gift card value $ GC  subtracting the processing fee $ PF , which equals the effective value $ PV . Should the transaction be less than the maximum value of the merchant issued gift card  110 , the issuing merchant  120  receives the amount of the transaction, subtracting a percentage respective to the processing fee $ PF . The clearinghouse  122  to issuing merchant  120  payment process is referred to as a merchant payment step  212 . 
     A gift card processing system block diagram  150  is illustrated in  FIG. 3  with a supporting gift card processing flow diagram  300  being presented in  FIG. 4 . The initial steps of a gift card purchase step  202 , an information transfer step  204 , a clearing fee payment step  206 , and a gift card valuation banking step  208  are as previously disclosed in the description describing  FIGS. 1 and 2 . The method deviates wherein the receiving party completes a transaction with a exchange merchant  124 , wherein the exchange merchant  124  has no corporate relation or financial relation with the issuing merchant  120 . The receiving party would determine which partner merchants are included in the system and what the respective exchange rate between the merchant issued gift card  110  and the value at the exchange merchant  124 . A listing of the merchants can be provided in a list. The user would select the issuing merchant  120  and one or more desired exchange merchants  124 . The system will then present an index of exchange merchants  124  and the respective exchange rate x % for each thereof. The card holding consumer then selects the desire exchange merchant in accordance with a determine exchange merchant step  302 . If the cardholder desires to make a purchase at the exchange merchant  124 , the cardholder can use the merchant issued gift card  110  for at least a portion of the transaction, as referenced by a transaction completion step  306 . The transaction completion step  304  provides the exchange rate to the exchange merchant  124 , whereby the exchange merchant can determine the adjusted gift card monetary value x %$ GC , wherein x % is representative of the exchange rate. The adjusted gift card monetary value x %$ GC  is deducted from the total amount of the transaction. The exchange merchant  124  communicates with the clearinghouse  122  via the communication network  130 , requesting information pertaining to the merchant issued gift card  110 . The transaction provides the reference number of the merchant issued gift card  110 , and in turn requests validation of the merchant issued gift card  110 , the exchange rate x %, and the pending balance $ GC . The exchange merchant  124  continues with the transaction. Upon completion of the transaction, the monetary value x %$ PV  is transferred from the clearinghouse  122  to the exchange merchant  124  via an exchange merchant payment step  306 . In parallel, the balance of the banked funds (100−x %)$ PV  reserved for the merchant issued gift card  110  are transferred to the issuing merchant  120  via an issuing merchant payment step  308 . Should the issuing merchant  120  become dissolved, the balance of the funds can be transferred to the clearinghouse  122  or the card can be considered open eliminating any exchange reduction. Alternately, the exchange rates can be adjusted and the amended balance of the gift card funds can be transferred to the clearinghouse  122 . 
     Since the effective value $ PV  are held by the clearing house  122 , the clearing house  122  can utilise the money for conservative investing, thus providing income to either the clearing house  122  or increasing the effective value $ PV  of the merchant issued gift card  110  for the card holder. The cardholder can access information pertaining to the card, such as the balance available via the communication network  130 , such as the Internet. 
     Gift cards  110 , are generally void of an owner&#39;s identification. Therefore a form of validation may be implemented, including a Personal Identification Number (PIN), a biometric verification, and the like. 
     It is understood the actual funding respective to the card can alternately be banked by the issuing merchant  120 . The funds would then be disbursed upon the use of the gift card  110 . In an alternate embodiment, the gift card  110  can be considered as a universal card (good at any merchant). The exchange rate would be decided by the issuing merchant prior to purchase of the gift card  110 . The gift card receiving party would have no control over which stores accept the specific issuing merchant gift card  110  or the exchange rate. This provides flexibility of where to use the card, while providing a fixed exchange rate, thus simplifying the transaction process for the receiving party. 
     Since many modifications, variations, and changes in detail can be made to the described preferred embodiments of the invention, it is intended that all matters in the foregoing description and shown in the accompanying drawings be interpreted as illustrative and not in a limiting sense. Thus, the scope of the invention should be determined by the appended claims and their legal equivalence.