Coupon validation network with storage of customer coupon data for credit on future purchases

A coupon validation network is disclosed for automatically processing product coupons which are presented for redemption by customers. The coupon validation network includes: a central control systems storing at least two database master files, a first file for all redeemable encoded coupons issued by all manufacturers participating in the network and a second file for all coupons redeemed by each retailer participating in the network. A plurality of local control systems for operation by one of the retailers store and at least three database local files, a first file of all the redeemable encoded coupons, a second file for all coupons redeemed by the retailer and a third file for customer coupon accounts of all validated redeemable coupons presented in advance for credit by each customer. A first coupon processing terminal for use in conjunction with an electronic sales register and the like adjusts a total purchase price to reflect all valid redeemed coupons and updates the second local database file. A second coupon processing terminal adapted for independent use by customers identifies all valid coupons presented in advance for later redemption credit. Data is transferred between the at least one central control system and the plurality of local control system. Retailers automatically process coupons presented for redemption by customers, manufacturers may conveniently reimburse retainers for the value of the redeemed coupons and customers can arrange for permanent access to their coupons without carrying them, the coupons being discardable after redemption for purchase or credit.

BACKGROUND OF THE INVENTION 
1. Field of the Invention 
This invention relates generally to the field of retail marketing 
promotions, and in particular, to a comprehensive coupon validation 
network for efficiently monitoring and controlling all phases of coupon 
processing. 
2. Prior Art 
Coupons, for example cents-off, two-for-one and the like, have become an 
integral part of retail marketing, particularly for food and 
pharmaceutical products. Most coupons are issued by the manufacturers of 
the products, although retail stores, particularly retail store chains, 
will often issue coupons as well. Presently, printed coupons are collected 
by consumers, often in quantities of hundreds or even thousands of small 
pieces of paper. Most consumers are unable to say, with any assurance, 
just what products may be purchased at a discount by reason of the coupons 
on hand. As a consequence, most consumers usually find that several 
coupons have been left at home, some time during shopping or checking out. 
The coupons are presented for redemption at the cash register when 
checking-out a group of purchases. Even in those instances where 
electronic scanners and electronic sales registers are available, a 
cashier must manually examine each coupon individually. The examination 
must include checking the expiration date of the coupon, whether or not 
the consumer has actually purchased the product identified on the coupon 
and, frequently, whether the consumer has purchased the correct quantity 
of products and the correct size of the product. Thereafter, the values of 
the manually validated coupons must be entered into the register for 
subtraction from the unadjusted aggregate purchase price. 
Those coupons which are collected by the retailers must be manually sorted, 
and returned to the manufacturers. The sorting is usually done by a 
professional clearing house, but is sometimes done by the retailer or 
retail chain. In either case, the coupons must be sorted both by 
manufacturer and by retailer, in order for each retailer to receive proper 
reimbursement from each manufacturer. The manufacturers must pay fees to 
the clearing houses and must pay handling fees to the retailers, which 
increases the cost of the product promotions. The retailers incur an 
additional cost by reason of extending credit to the manufacturers by 
underwriting the discount values of the coupons at the time of purchase 
and being reimbursed at a later time. 
The current system is not only too expensive, it is something of an 
administrative nightmare to collect, sort, shuffle and transport millions 
and millions of small pieces of paper. Moreover, the system is fraught 
with opportunities to defraud the manufacturers by presenting coupons for 
reimbursement which have not been presented in conjunction with purchasing 
a product. Once a coupon has reached a sorting stage it is impossible for 
a manufacturer to determine whether a specific product was purchased with 
that coupon. Such frauds are usually undetectable unless perpetrated by 
large conspiracies with many participants. 
The supermarket industry, in particular, has already begun adding universal 
product codes (UPC) to coupons. The coupons are encoded to enable machine 
scanning of the coupons at the point of purchase, that is, by the cashier. 
As the coupon is scanned, it may be checked against a database file to 
ensure that it is a valid coupon, for which the consumer should receive a 
credit. Although coupon scanning technology is available, the coupons must 
still be manually checked against the products purchased. Moreover, most 
retailers do not have the necessary computer capacity to store a file of 
all redeemable coupons, and most retailers do not want the burden of 
operating a data processing center, which would be necessary to maintain 
current coupon files. 
This invention overcomes all of the problems plaguing the prior art, as 
identified above. This invention provides a comprehensive coupon 
validation network which eases the burdens of the manufacturers, the 
retailers and the consumers. Firstly, the invention provides an electronic 
system to replace the manual system. Once coupons have been presented to a 
retailer, and validated, the coupons may be discarded. The coupons may be 
automatically invalidated to prevent subsequent revalidation and/or 
destroyed. Secondly, payments to the retailers from the manufacturers are 
made more promptly because validation is completed at the point and the 
time of sale. Thirdly, fraudulent redemption is eliminated because 
validation requires simultaneous satisfaction of the validation criteria, 
namely a properly redeemable coupon and a corresponding purchased product 
of the correct size and quantity, the validation being conducted 
automatically without manual intervention. Fourthly, retailers are 
provided with a means for maintaining an up-to-date file of redeemable 
coupons without having to establish or maintain a data processing center. 
Fifthly, operating costs of the store can be further reduced because 
consumers may process coupons for redemption and validation in advance, 
completely independently and apart from point and time of sale 
transactions. Finally, consumers may establish a coupon credit account 
which makes it unnecessary to maintain large numbers of coupons. The 
coupon credit account can be tapped fully and automatically at the time of 
each point of sale transaction to ensure that all coupons available will 
be utilized, ending the aggravation of forgotten coupons. 
SUMMARY OF THE INVENTION 
It is an object of this invention to provide a coupon validation network 
for automatically processing redeemed coupons. 
It is a further object of this invention to provide a coupon validation 
network for automatically validating coupons presented for redemption by 
customers at the time and point of sale. 
It is a another object of this invention to provide a coupon validation 
network for automatically validating coupons presented in advance by 
customers for later redemption credit. 
It is yet another object of this invention to provide a coupon validation 
network for automatically providing retailers access to a complete 
database file of all redeemable coupons issued by all manufacturers 
participating in the network. 
It is yet another object of this invention to provide a coupon validation 
network for automatically crediting customer's coupons toward the purchase 
price of a plurality of products, any one of which may or may not be 
subject to a price reduction upon redemption of a coupon. 
It is yet another object of this invention to provide a coupon validation 
network for automatically providing retailers and manufacturers access to 
a database of all valid coupons redeemed by each retailer participating in 
the network, for each manufacturer participating in the network. 
It is yet another object of this invention to provide a coupon validation 
network for automatically providing each customer participating in the 
network access to a database file of all coupon credits available to each 
customer. 
It is yet another object of this invention to provide a coupon validation 
network for obviating the need to manually process and sort coupons after 
redemption thereof. 
These and other objects of this invention are accomplished by a coupon 
validation network, comprising: at least one central control system, 
having means for storing at least two database master files, a first file 
for all redeemable encoded coupons issued by all manufacturers 
participating in the network and a second file for all coupons redeemed by 
each retailer participating in the network; a plurality of local control 
systems, each adapted for operation by one of the retailers and having 
means for storing at least three database local files, a first file of all 
the redeemable encoded coupons, a second file for all coupons redeemed by 
the retailer and a third file for customer coupon accounts of all 
validated redeemable coupons presented in advance for credit by each 
customer; at least one first coupon processing terminal adapted for use in 
conjunction with an electronic sales register and the like and having 
means for effecting adjustment of a total purchase price to reflect all 
valid redeemed coupons and means for updating the second local database 
file; at least one second coupon processing terminal adapted for 
independent use by customers and having means for identifying all valid 
coupons, presented in advance for later redemption credit, and means for 
updating the third local database file; and, means for transferring data 
between the at least one central control system and the plurality of local 
control systems, whereby retailers may automatically process coupons 
presented for redemption by customers, manufacturers may conveniently 
reimburse retailers for the value of the redeemed coupons and customers 
can arrange for permanent access to their coupons without carrying them, 
the coupons being discardable after redemption for purchase or credit. In 
the presently preferred embodiment, each local control system of the 
network comprises a plurality of the first and second coupon processing 
terminals. 
In the presently preferred embodiment, each of the first coupon processing 
terminal comprises: means for reading coupon account cards adapted for 
carrying by customers, each card having encoded means for uniquely 
identifying a coupon customer account; means for reading encoded coupons 
presented for redemption; means for validating the read coupons by 
comparison of each of the coupons with the local file of redeemable 
coupons and with each product purchased during a transaction for which the 
coupons have been presented; means for comparing each of the coupons in 
any one of the customer coupon accounts with each product purchased during 
a transaction for cashing-in coupons presented in advance; means for 
automatically accumulating credit values for validated coupons; means for 
preventing subsequent revalidation of validated coupons; means for 
updating the third local database file to delete cashed-in coupons and to 
add coupons which are presented, read and validated, but which do not 
correspond to any of the products purchased during the transaction; and, 
means for selecting between more than one coupon, including coupons 
presented in advance and coupons presented during the transaction, which 
apply to the same product. 
In the presently preferred embodiment, each of the second coupon processing 
terminal comprises: means for reading coupon account cards adapted for 
carrying by customers, each card having encoded means for uniquely 
identifying a coupon customer account; means for reading encoded coupons 
presented for redemption; means for validating the read coupons by 
comparison of each of the coupons with the local file of redeemable 
coupons; means for preventing subsequent revalidation of validated 
coupons; and, means for selectively displaying and printing information 
from each customer's coupon account.

DESCRIPTION OF THE PREFERRED EMBODIMENTS 
A coupon validation network according to this invention, generally 
designated by reference numeral 10, is shown in the Figure. An interactive 
coupon validation network, that is, one in which the customers take an 
active, independent part, will preferably utilize all of the components or 
subsystems shown in the Figure. A passive coupon validation network, that 
is, one in which the customers do not take an active, independent part, 
need not utilize all of the components or subsystems. Even so, the passive 
system is a significant improvement over the prior art. 
The coupon validation network 10 comprises at least one central control 
system 12, adapted for use by the operator of the network, a plurality of 
local control systems 14, one for each of the retailers participating on 
the network, and means 16 for 15 communicating and transferring data 
between the at least one central control system 12 and each of the local 
control systems 14. The communicating means 16 is illustrated as including 
the existing network of telephone lines 17. 
Each of the at least one central control systems 12 comprises a control 
terminal 26, means 28 for storing at least two database master files, a 
modem or the like 30 and a coupon reader 32. Each central control system 
12 may be embodied as a computer in which the control terminal 26, the 
storing means 28 and the modem 30 are interconnected by a bus 34. The 
control terminal will preferably have a keyboard, a video display and one 
or more disk or tape drives. The control terminal will also preferably 
have a printer. These components and features are typical of computers, 
and accordingly, are not shown in detail. The coupon reader 32 is 
preferably embodied as an external peripheral, either connected to control 
terminal 26 by cable 36 or to the bus 34 by cable 38, cable 38 being 
illustrated as an alternative connection by dotted lines. The modem 30 is 
connected to the telephone network lines 17 by cable 40. 
The database file storing means 28 has a first file 42 for all redeemable 
encoded coupons issued by all manufacturers participating in the network 
and a second file 44 for all coupons redeemed by each retailer 
participating in the network. The second file 44 will be loaded and 
updated by information transmitted from each of the local control 
networks. The storing means 38 may also have a third file 46 of individual 
retailer 15 accounts. The information in the third file 46 may 
alternatively be compiled by sorting when necessary, although maintaining 
a permanent updatable file is believed to be more convenient. 
The coupon reader 32 is adapted to have coupons fed therein, for machine 
scanning of the universal product codes printed thereon. The codes 
preferably identify the product to which the coupon pertains, the size 
requirement of the product if any, the amount of the coupon, the 
expiration date if any and the manufacturer of the product. The coupon 
reader may be used to load and update the first file 42 of redeemable 
coupons. Alternatively, the first file may be loaded and updated through 
the control terminal, through data stored on disks or other portable media 
or through the modem 30, by downloading directly from a manufacturer. 
Automatic paper feeders for discreet pieces of paper, which is the form 
taken by all conventional coupons, and machine scanners for reading 
universal product codes and the like are already known, and are not 
illustrated in detail. 
Each of the local control systems 14 is adapted for operation by one of the 
retailers participating in the coupon validation network. Each of the 
local control systems preferably comprises a control terminal 50, means 52 
for storing at least two database local files, a modem or the like 54, at 
least one first kind of coupon processing terminal 56 and at least one 
electronic sales register 60. A plurality of first coupon processing 
terminals 56 and electronic sales registers 60 will preferably be 
provided, for example, at each check-out location of a supermarket. Each 
local control system may also be embodied as a computer in which the 
control terminal 50, the storing means 52 and the modem 54 are 
interconnected by a bus 58. The first coupon processing terminal 56 and 
the sales register 60 are preferably embodied as external peripherals. The 
first coupon processing terminal 56 may be connected to the bus 58 by 
cable 57. The electronic sales register may be connected to the bus 58 
indirectly through the first coupon processing terminal by cable 56, by 
means of which the coupon processing terminal 56 and the electronic sales 
register 60 may communicate directly with one another. The electronic 
sales register may also communicate directly with bus 58 by cable 59, 
which is shown as an alternative connection by dotted lines. A printer 64 
is preferably connected to each first coupon processing terminal, as shown 
by cable 66. The printer may also be connected directly to either or both 
of the electronic sales register 60 and the bus 58, by cables which are 
not shown in the drawings. The foregoing components or subsystems, which 
will be explained in more detail, are sufficient to form a passive 
network, in which the customer does not take an active role. 
In order to form an interactive network, in which the customer does take an 
active role, the local control system further comprises at least one 
second kind of coupon processing terminal 82, which may be connected to 
the control terminal by a cable 68 or may be connected directly to the bus 
58 by a cable not shown in the drawing. The first coupon processing 
terminals 56 are adapted for use with electronic sales registers and the 
like, which are themselves adapted for operation by employees of the 
retailer. The second coupon processing terminals are adapted for 
independent use by customers of the retailer, and in particular, customers 
participating in the coupon validation network 10. 
It will be appreciated by those skilled in the art that the means 16 for 
communicating between the at least one central control system 12 and each 
of the plurality of local control systems 14 may be deemed to include 
modems or the like 30 and 54, or not, depending upon the convenience of 
the definition. It will also be appreciated by those skilled in the art 
that the difference between that which is referred to as a peripheral and 
that which is referred to as an independent device is also largely a 
matter of convenience and definition. Accordingly, the invention is not to 
be limited by those definitions which have proven most convenient in 
describing the invention. 
In each local control system 14, the storing means 52 includes at least 
two, and preferably at least three database local files. A first file 72 
includes all of the redeemable encoded coupons. First file 72 is loaded 
and updated from the first file 42 of the central control system. A second 
file 74 includes all of the coupons redeemed by the retailer. Second file 
74 is loaded and updated from one or the other of the first coupon 
processing terminal 56 and the electronic sales register 60, depending 
upon the configuration of the components and the paths by which they are 
connected to the storing means 52. A third file 76, necessary for 
implementing the interactive network, includes all customer coupon 
accounts of all validated redeemable coupons presented in advance for 
credit by each customer. Third file 76 is loaded primarily from the second 
coupon processing terminals 82, in the sense of adding coupon credits to 
an account. Third file 76 will be primarily updated, in the sense of 
deleting redeemed coupon credits from an account, by the first coupon 
processing terminals 56 and/or the electronic sales registers 60, again 
depending upon the system configuration. Under some circumstances, where 
coupons presented at the point and time of sale are validated as being 
properly redeemable coupons by a first coupon processing terminal, but do 
not correspond to a purchased product, an appropriate coupon credit may be 
added to a coupon account by the first coupon processing terminal and/or 
the electronic sales register. In the absence of such an account, or in 
the passive variation of the network 10, such a coupon will be returned to 
the customer or a substitute coupon may be printed and returned in place 
of the coupon. 
Each of the first coupon processing terminals 56 is adapted for use in 
conjunction with an electronic sales register 60, as explained above. Such 
electronic sales registers have means for machine scanning universal 
product codes on products and means for calculating and accumulating a 
total purchase price for all products bought during a particular 
transaction. The use of electronic sales registers is described, for 
example, in U.S. Pat. No. 4,676,343, the teachings of which are 
incorporated herein by reference. Each of the terminals 56 has means for 
effecting adjustment of a total purchase price to reflect all valid 
redeemed coupons and means for updating the second local database file. As 
part of validating a coupon, it is necessary to assure that each coupon 
presented actually corresponds to a product being purchased as part of the 
transaction in which the coupon is presented for redemption. Accordingly, 
the sales register is provided with a transaction buffer 80 for storing 
all of the product codes for all of the products purchased in each 
transaction. Transaction buffer 80 may be alternatively incorporated into 
the coupon processing terminal 56, once again depending upon system 
configuration. Transaction buffer 80 is preferably a temporary file, 
erased and reloaded after each transaction is completed. 
In the interactive variation, each of the second coupon processing 
terminals 82 will preferably have a key pad 84, a video display 86 which 
may be a touch-screen display having "buttons" 88, a coupon reader 90, a 
printer 92 and a card reader 94. Each customer participating in the 
interactive network will be issued an identification card 96, in the form 
of a common credit card. Each card 96 has a magnetic stripe or the like 98 
thereon, which is encoded to identify the customer and provide access to 
the customer's coupon account in the third file 76. The identification 
process might also require the customer to punch in a code word through 
key pad 84 after the card has been read, as is the case with automatic 
teller machines. After identification has been established, a programmed 
display can instruct the customer on the proper procedure for feeding 
coupons into coupon reader 92 for adding corresponding coupon credits to 
the customer's coupon account. Printer 94 may be utilized to provide the 
customer with a list of all coupon credits which have been stored. In 
another mode of operation, the second terminals 82 may be used by 
customers to query their coupon accounts and to obtain special shopping 
lists of all products for which coupon credits have been stored. The list 
might be arranged by product category, by traffic pattern of the store, 
which might vary between stores in the same chain, or other convenient 
criteria. The list might also be printed in such a way as to flag all 
coupons on file which are due to expire, for example, in the next month. 
It is preferred that expired coupons be culled from the database files on 
a regular basis. Whenever customers sign on to a second terminal, they may 
automatically be provided with a list of all such deleted coupons. 
The structure of the first coupon processing terminals will depend upon 
whether the network is a passive or active network. If the network is 
active, the first terminals 56 will be similar in all respects to the 
second terminals 82. Even though the first terminals 56 are adapted for 
use with electronic sales registers, it will still be necessary for 
customers to access their coupon accounts in order to redeem the coupon 
credit values, which now take the place of the coupons themselves 
Additional coupons might be presented at the time of sale as well. The 
retailer might also choose to automatically provide store coupon credits 
to a customer, depending upon the number and kind of products being 
purchased. A video display can provide an explanation to customers in 
connection with issuing the store coupon credits, in explaining why 
certain coupons are rejected for credit and the like. In a passive 
network, there need be only a coupon reader and an indicator light 
display, for example, to show why certain coupons are rejected. 
Differences in the first and second coupon processing terminals 56 and 82 
also reflects the difference in the coupon validation procedure which must 
be conducted by each of them. In the first processing terminals 56, two 
steps are required to validate coupons. The first step requires comparison 
of each read coupon presented at the point of sale, for both the passive 
and interactive networks, with the first file 72 of all redeemable 
coupons. The second step requires comparison of each read coupon with each 
product purchased, and therefore stored in transaction buffer 80. If a 
coupon is among those stored in first file 72, and corresponds to a 
product being purchased, the coupon is deemed valid. The credit value is 
subtracted from the unadjusted purchase price, the coupon is voided to 
prevent subsequent revalidation thereof and the second file 74 is updated 
to reflect a credit due to the retailer from the manufacturer issuing the 
coupon. In the interactive system, each coupon credit in the customer's 
coupon account must be compared with the list of purchased products stored 
in the transaction buffer 80. Moreover, each customer account must be 
updated to delete all coupon credits which have been cashed-in. Those 
coupons which have been redeemed may be voided by punching, shredding, 
obliteration of the universal product code or the like. In the second 
processing terminals 82, only the first step need be undertaken, namely a 
comparison of the read coupons with the first file 72 of redeemable 
coupons. The comparisons of codes on coupons with codes of stored coupons 
and/or the codes of purchased products may be accomplished by the same 
kind of equipment utilized to provide inventory control from machine 
scanned codes on purchased articles, and accordingly, such equipment is 
not described in detail herein. 
In terms of function, then, each of the first coupon processing terminals 
preferably comprises, in the interactive variation, means for reading 
coupon account cards adapted for carrying by customers, each card having 
encoded means for uniquely identifying a coupon customer account; means 
for reading encoded coupons presented for redemption; means for validating 
the read coupons by comparison of each of the coupons with the local file 
of redeemable coupons and with each product purchased during a transaction 
for which the coupons have been presented; means for comparing each of the 
coupons in any one of the customer coupon accounts with each product 
purchased during a transaction for cashing-in coupons presented in 
advance; means for automatically accumulating credit values for validated 
coupons; means for preventing subsequent revalidation of validated 
coupons; means for updating the third local database file to delete 
cashed-in coupons and to add coupons which are presented, read and 
validated, but which do not correspond to any of the products purchased 
during the transaction; and, means for selecting between more than one 
coupon, including coupons presented in advance and coupons presented 
during the transaction, which apply to the same product. 
Each of the second coupon processing terminals in an interactive network 
comprises, in terms of function, means for reading coupon account cards 
adapted for carrying by customers, each card having encoded means for 
uniquely identifying a coupon customer account; means for reading encoded 
coupons presented for redemption; means for validating the read coupons by 
comparison of each of the coupons with the local file of redeemable 
coupons; means for preventing subsequent revalidation of validated 
coupons; and, means for selectively displaying and printing information 
from each customer's coupon account. 
Although the coupon validation network according to this invention requires 
communication between the central control system and each of the local 
control systems, such communication need not be on a continuous basis. 
Downloading of the redeemable coupon file from the central control system 
to the local control systems will likely be sufficient if conducted 
periodically, for example, on a daily or even a weekly basis. Downloading 
of each second file of coupons redeemed by each retailer from the local 
control centers to the central control center can also be on a periodic 
basis, for example, on a weekly or even a monthly basis. Alternatively, if 
the central and local control centers are also linked with one or more 
financial data bases, of banking institutions or the like, retailers can 
receive credit for redeemed coupons on a daily basis. 
The invention may be embodied in other specific forms without departing 
from the spirit or essential attributes thereof. Accordingly, reference 
should be made to the appended claims, rather than the foregoing 
specification, as indicating the scope of the invention.