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Smart Card
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Case Study: Gift and Loyalty Card
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The client is an Application Service Provide that provides a wide-range of business services to merchants and links them via a pool of related and varied customers. He came out with four different, but yet related, concepts that would create a unique mercantile-patron community.
The applications came out of the concepts are
- Loyalty Reward Points.
- Discount Card.
- Gift Card.
- Barter Trade Credit Card.
Common goal for all the four applications envisaged is to give associated merchants an increased base of loyal customers.
Loyalty Reward Points
The Loyalty/Rewards card is a typical loyalty/rewards card with a twist. It allows an individual to earn points at one merchant and spend them at another unrelated merchant.
The Loyalty/Rewards card program is a real time system. This allows cardholders and businesses to get up to the minute information.
Business Problems
Basic problem in the business model was to establish the identity of the buyer, and to give him the feel of being a member of this community.
Some other token was also to be devised that the customer could keep as his membership identification.
Another problem was to develop a flexible host that can accommodate different loyalty schemes, offered by different merchants at different points, on a single card.
Moreover, designing a Host that could take care of processing the core business of loading and redeeming of points, and to make points interoperable among various merchants, in real time mode, in the system was a big challenge, especially when it came to inter-merchant settlement.
The Solution
A magnetic strip card based solution was envisaged and deployed. This includes retail transaction client system that is responsible of loading the points on sales made, and redemption of points. A backend host is designed that could distinguish between loyalty point loading merchant and point redeeming merchant. The host also takes care of inter-merchant settlement.
The most distinguishing feature of the solution deployed was the flexibility of defining merchant specific loyalty scheme. At any given time, there can be different point distribution schemes offered by different merchants. That is, for e.g. at the same time, merchant A might be offering 1 point on purchase of 100 USD while other might be offering 1 point for every 150 USD purchase, while third might be offering 10 points every time the card is swiped, irrespective of the amount of purchasing. Moreover, a merchant may define different loyalty point distribution schemes for different spans of time. For e.g. Merchant A might be offering 1 point for every 100 USD transaction between 1 PM and 5 PM, while 2 points for every 100 USD transaction during any other time. Merchant B might be offering 5 points for every 150 USD transactions on weekend sales while 2 points for every 100 USD transactions on weekdays.
Various transactions possible in the system includes
- Earning loyalty points on purchase
- Redemption of points
- Void cancellation of transaction
- Balance check
- Inter-merchant settlement
Benefits
This has several benefits for the cardholder.
- It allows them to earn points on a purchase that they would have made anyways.
- Also it allows them to have a chance at winning prizes for making a purchase a participating merchant.
- Cardholders can save there points up and spend them all at once or use them as soon as they get them.
The merchant has several benefits.
- It allows them to pool there customers with other business for marketing purposes.
- It also allows them to find there most important customers and reward them for shopping with them.
- It allows the merchant to share the marketing costs with several other businesses to maximize there advertising dollars.
The Loyalty/Rewards card programs is a real time system. This allows cardholders and business to get up to the minute information.
Discount Card
The idea behind the discount card is to allow merchants to give discounts to customers and employees. The discount amounts will vary from 1% to 50% off.
Business Problems
The problem is to identify the person and to find out how much discount can be availed by him. At the same time, to keep a track of percentage and total absolute discount already availed by the person.
The Solution
The merchant swipes the card to see how much the customer gets off there total sale. This allows for employee incentives and rewarding valuable customers. Every card looks the same so the merchant has to swipe the card to see how much of a discount the cardholder receives.
Benefits
Cardholder can establish his credentials without any argument of bargaining.
Merchant gets a consolidated report at the end of the day and month that help him analyze his business pattern and to plan for future sales.
Gift Card
The idea behind the gift card is to give some money equivalent personalized card to a beloved / cared person who can use this card at her discretion to buy goods / services of her choice.
The Solution
There are a couple of versions of this card. There is the single merchant version(SM), and there is a multi-merchant version(MM).
The Single Merchant(SM) version is the standard gift card program. A merchant is able to issue gift cards that are good at only his business, regardless of how many locations they have. He is able to do the following functions: Activate Deactivate, Sale, Void, Add Value, and a Balance Check.
The Multi Merchant (MM) version is a little different. Instead of the gift card only being good at the merchant that sold the gift card it is good at several merchants' locations that share no relationship. The functions are the same and the controls to make them SM or MM are done from the host.
Benefits
- There is not much confusion in giving someone a gift for any occasions.
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- Cards are available at a wide network of merchants.
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- Cards can be redeemed at any merchant.
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- Cards surface can be beautifully printed with a matter and image of buyer's choice.
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- Even after using the stored value, card can be used as a greeting and memory.
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- Recipient can buy a gift of her choice.
Barter / Trade Card
The Trade/Barter card is really just a charge card. Global processing has a few products that fit in this description. They have a
- private label charge card
- private label credit card
- trade/barter card
All three cards act the same from the terminal's point of view. There is different information that is printed on each receipt, but this is set from the MMS or downloaded on each transaction.
The Credit/Charge/Barter/Trade cards all have the same functions. They are Sale, Return, Void, Balance Check.
These cards could be good at one merchant or multiple merchants; however the terminal scheme will not change.
Technologies used
Card Operating System: Hi-Co Magnetic Strip Cards.
Terminal: Schlumberger Magic Series Terminals.
IDE: Visual c++ for host implementation.
RDBMS: Oracle 8i.
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