WO2001004823A2 - System and method for global generic mileage loyalty program - Google Patents

Abstract

A system and method for providing generic miles for a variety of behaviors that are redeemable for tickets for world-wide travel on any airline preferably comprises: a web server, an application server, a database server, and a disk array. The application server further comprises various modules including a mileage transfer unit (704), and account balance unit (706), a fraud detection unit (708), a transaction history unit (710) and an account status unit (712). These units are operable on the application server to provide a loyalty reward system for providing generic miles that provides much of the functionality electronically. In particular, the system allows generic miles to be transferred electronically, for the detection of fraudulent mileage transfers, for members and partners to check mileage account balances electronically, for the automatic generation and transmission of notification of mileage balance levels (720), and for the automatic maintenance of mile awards and redemption (716).

Description

Svstem And Method For Global Generic Mileaee Lovaitv Proεram

CROSS-REFERENCE TO RELATED APPLICATION

This aDplication is a utility application of U.S. provisional patent application

serial no. 60, 143,559. entitled ^"Global Generic Mileage Loyalty System and Method."

filed on July 13. 1999, which is incorporated herein by reference.

BACKGROUND OF THE INVENTION

1. Field of the Invention

This invention relates generally to systems and methods for generating customer

loyalty and rewarding behaviors. More specifically, the present invention relates to

customer loyalty programs that offer miles as a loyalty reward. Still more paπicularly,

the present invention relates to a system and method for providing geneπc miles for a

vaπety of behaviors that are redeemable for tickets for worldwide travel on any airline.

2. Description of the Background Art

There are a variety of incentive and loyalty programs that have been developed

and continue in existence today. For example, incentive programs include rebates,

discounts and coupons where incentives are offered in the short term to motivate a

particular purchase. In contrast, loyalty programs attempt to develop loyalty to a

particular product or service over a longer term. Most loyalty programs are based on a

premise that if you perform a specific behavior (most often purchasing goods or services from a particular source), then you are awarded some unit that when accumulated may be

redeemed for various goods. For example, frequent flyer mileage award Drograms

administered by airlines are well known. These frequent flyer miieage award programs

include a frequent flyer member and an airline as shown in Figure 1 A. Miles are awarded

by the airline for eacn segment traveled on the airline. Miles are awarded based on the

distance traveled on vanous flights. These frequent flyer miieage award programs also

sometimes allow awarding of mileage purchased by third paπies from the airiines. Miles

are awarded and accumulated by the member. Once the member has accumulated

sufficient miles, the member may redeem the miles in exchange for a ticket for travel on

the airline.

Variations on these frequent flyer programs have been developed such that if you

use a credit card from a paπicular bank, you can also earn frequent flyer miles. An

exemplary pπor art system is shown in Figure I B. The prior art system includes a

member, a bank or company, and an airline. The member is awarded miles based on

usage of the member^' s credit card. A typical scenario is that the member is awarded one

mile for each dollar spent. Miles are awarded by the bank and accumulated by the

member. Once the member has accumulated sufficient miles, the member may redeem

the miles with the bank, and the bank purchases a ticket from the airline. The airline

delivers the member a free airline ticket to the destination of choice, which the airline

serves.

Unfortunately, there are number of problems with the existing loyalty programs.

First, the attractiveness of the loyalty incentive is significantly diminished once the user

learns of all the restπctions and lack of seat availability for the free ticket that is awarded

- 7. under many frequent flyer award programs. Most all existing airline frequent flyer award

programs impose restrictions on the number of seats available for each flight, the times

when the tickets for free travel can be used, the class of travel for which the ticket can be

used, and geographic areas to v nich the user may travel. As the number of participants in

such programs has increased, the seat restπctions on sucn programs has reduced their

effectiveness as a loyalty tool since there are few if any times during peak travel time

when the user can use awarded tickets Furthermore, the complicated rules for usage and

awards make existing programs even less attractive Therefore, there is need for a geneπc

mileage loyalty program that is not subject to the restπctions of the pπor art.

Fuπhermore, the loyalty effectiveness is inherently limited because the awarded

miles are only valid for the paπicular airline with which the bank is affiliated. This is a

restπction in two ways First, the awarded miles may only be used for a paπicular airline.

Secondly, since no airline flies to every location in the world, the destinations to which

the user can travel with the awarded ticket are limited to the destinations in the carrier's

routing system For smaller airlines, this presents a particular problem. More generally,

this limits the value of the awards because much international travel and travel to exotic

locations are not possible. Basically, this forces the user to a choice of traveling on one

or a limited number of airlines. Therefore, there is need for a geneπc mileage loyalty

program that does not restπct travel to a single airline or selected airlines, and that allows

redemption of mileage for travel on any airline.

Yet another shortcoming of the pπor art is that the overall value of the rewards

(free tickets) is diminished by their difficulty to earn them. More specifically, the pπor

art provides very limited ways to earn miles such as. 1 ) by travel on the airline, or 2) by purchase using the credit card of the bank. Therefore, it is very difficult, and takes a

considerable amount of time to earn a free ticket for travel. Thus, there is need for a

system that ailows for the earning of miles through a vaπetv of different behaviors.

Therefore, there is a need for improved system and method for providing generic

miles for a vaπety of behaviors that are redeemable for tict ets for worldwide travel on

any airline.

SUMMARY OF THE INVENTION

The present invention overcomes the deficiencies and limitations of the pπor art

with a unique system and method for providing generic miles for a vaπety of behaviors

that are redeemable for tickets for worldwide travel on any airline. The system of the

present invention is preferably a loyalty reward system for providing generic miles. The

system preferably compπses: a web server, an application server, a database sever and a

disk array. The application server further compπses vaπous modules including a mileage

transfer unit, an account balance unit, a fraud detection unit, a transaction history unit and

an account status unit. These units are operable on the application server to provide a

loyalty reward system for providing geneπc miles that provides much of the functionality

electronically. In particular, the system of the present invention allows geneπc miles to

be transferred electronically, for the detection of fraudulent mileage transfers

electronically, for members and partners to check mileage account balances

electronically, for the automatic generation and transmission of notification of mileage

balance levels, and for the automatic maintenance of mile awards and redemption. The present mvennon also includes a plurality of methods for rransterπng miies. for checking

account status and for redeeming mileage rewards.

The present invention is particularly advantageous in a number of respects. First,

the system provides geneπc miles that can be earned throu n a vaπety of unrelated

different behaviors and from a v aπery of different sources Second, the geneπc miles

accrue to a reward that is an airline ticket to any location in the world, on any airhne, at

any time. Finally, the earning of miles, accounting of miles, account momtoπng and

redeeming of rewards can be done entirely electronically.

These and other features and advantages of the present invention may oe better

understood by consideπng the following detailed descπption of preterred embodiments of

the invention. In the course of this descπption, reference will frequently be made to the

attached drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

Figure 1A is a diagram of a first pπor art mileage loyalty award program.

Figure IB is a diagram of a second pπor art mileage loyalty award program.

Figure 2A is a diagram of a first and preferred embodiment of a global geneπc

mileage loyalty system according to the present invention

Figure 2B is a diagram of a second embodiment ot a global geneπc mileage

loyalty system according to the present invention.

Figure 3 is a high-level block diagram illustrating sources from which a member

can receive miles in loyalty reward system of the present invention. Figure 4 is a high-level block diagram of the system of the present invention

coupled to other systems by the World Wide Web.

Figure 5 A is a block diagram of a preferred embodiment of the svstem of the

present invention counted to the World Wide Web.

Figure 5B is a block diagram of a second embodiment of the system of the present

invention coupled to the World Wide Web.

Figure 6 is a high-level block diagram of a preferred embodiment for the

application server of the present invention.

Figure 7 is a block diagram ot a preferred embodiment for the memory of the

application server of the present invention.

Figure 8 is a flowchart of a preferred method for operation of a loyalty program

for providing, awarding and redeeming geneπc miles.

Figure 9 is a flowchart of a preferred method for transferring miles from the

system to a partner in accordance with the preferred embodiment of the present invention.

Figure 10A is a flowchart of a preferred method for detecting an account balance

of miles for a partner in accordance with the preferred embodiment of the present

invention.

Figure 1 OB is a flowchart of a preferred method for detecting an account balance

of miles for a member in accordance with the preferred embodiment ot the present

invention.

Figures 1 1 A and 1 I B are a flowchart of a preferred method for detecting

fraudulent mileage transfers in accordance with the preferred embodiment of the present

invention. Figure 12 is a flowchart of a preferred method for communicating with the system

of the present invention to determine mileage account status for a partner or member.

Figure 13 is a flowcnart of a preferred method for redeeming miles for travel

awards in accordance with the preferred embodiment of the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODLMENTS

Refemng now to Figures 2A-13, the preferred embodiments of the present

invention will now be descπbed. A first and second embodiment will first be descπbed

with reference to Figures 2 A and 2B. Then the system 402 and its coupling to other

systems will be descπbed with reference to Figures 4-7. Finally, the method for

operation of the system 402 w ill be described in detail with reference to Figures 8-13.

Svstem Architecture

Refemng now to Figure 2A, the architecture for a first and preferred embodiment

of a global geneπc mileage loyalty system 200 according to the present invention is

shown. The global geneπc mileage loyalty system 200 is a loyalty system that offers

miles as a reward. The miles may be accumulated and exchanged for free travel in the

form of airline tickets, rental cars, hotel rooms and cruises. It is useful first to define

some of the terms that will be used in the remainder of this specification. The global

geneπc mileage loyalty system 200 preferably includes a mileage tracking and reward

system (WebMiles system) 202a, a plurality of miles-awarding partners 204, a plurality

of members 206, a plurality of airlines 208 and a redemption agent 210. I The mileage tracking and reward system 202a controls the transfer of mileage to

7 and from partners, to and from members, and authorizes ticket purchase and delivery, as

3 will be discussed in more detail below. The mileage tracking and reward system 202a

4 also provides account information to partners, members and others as requested. For

5 each parmer 204. member 206. redemption agent 210 ano airiine 208. the miieage

6 tracking and reward system 202a provides a unique identification number and account

7 which can be accessed by the respective party for tracking the number of miles available.

S The mileage tracking and reward system 202a is preferably a plurality of web-enabled

9 computers, as will be descπbed in more detail below with reference to Figures 4-7, to

10 ensure that the tracking and reward system 202a is continuously accessible to members

I I 206 and partners 204

12 The partners 204 are any individuals or companies that want to generate loyalty

13 and to do so offers miles in conjunction with particular behaviors, most often purchasing

14 behaviors that the partner 204 wants to encourage. These behaviors can both be on the

15 Internet (e.g., electronic interactions) or off the Internet (e.g., conventional business

16 transactions). A partner 204 for the purposes of this application is also defined to include

17 a computing device with access to the Internet. The present invention is particularly

18 advantageous because it provides for a plurality of partners 204. In fact, the value and

19 usefulness of the system 200 only increases as the number of partners 204 increases.

20 The members 206 are potential customers and users whose loyalty the partners

21 204 want to engender. Most often the members 206 will be consumers of goods and

22 services. Like the partners 206, the members 204 are also be defined to include a computing device with access to the Internet, or are users with access to a computing

device that provides Internet access.

The redemption agent 210 is preferably a travel agent or travel service. The

redemption agent 210 is responsible for interfacing with the airlines 208 ana purchasing

ticket for memoers 206. The redemption agent 210 communicates with the mileage

tracking and reward system 202a to receive authoπzation and other secuπty information

for a particular member 206. and the redemption agent 210 also communicates with the

member 206 to secure information on the desired travel or flight information. While the

present invention will be discussed below in the context of airline tickets as tne incentive

or reward provided by the redemption agent 210, the present invention could be extended

to include other travel related services such as hotel & lodging, rental cars, entertainment

and meals. The redemption agent 210 communicates with the airlines 208 to obtain the

ticket and arrange for its deliver/ to the member 206. The redemption agent 210 includes

a computing device with access to the Internet for communication with the member 206,

the system 202a, and the airline 210, however, the communication may also be done by

human operator and a telephone in an alternate embodiment

The system 202a works with a plurality of airlines 208. The airlines 208

preferably include all airlines worldwide. Thus, the user mav travel to any destination at

any possible time. The present invention is particularly advantageous in the flexibility

offered for travel. While the present invention will be descπbed with reference to airlines

208 and tickets for air travel, the present invention could be expanded to include any or

all of the common earners such as trains, buses, ships. The present invention could be

further expanded to include cruises, tours, hotels, resorts, car rentals and entertainment providers. The airlines 208 are of a conventional type including the ability to provide

reservations, electronic ticketing, and flight information to a human agent. The system

202a is particularly advantageous to these partners 206 and airlines 208 because is

provides an incremental channel to a block of additional customers.

As shown in Figure 2 A. there are a variety of interactions between the miieage

tracking and reward system 202a. the plurality of partners 204, the plurality of members

206, plurality of airlines 208 and the redemption agent 210. These interactions will be

described in more detail below in Figures 8- 13, however, it is important to note that with

the present invention the interactions and transactions are preferably performed

electronically using web browsers and the World Wide Web. For greater understanding

of the present invention the vaπous interactions are summarized here. The interactions in

the system 200 include:

1 ) providing account information from the mileage tracking and reward

system 202a to a partner 204;

2) sale ot^' miles from the mileage tracking and reward system 202a to a

partner 204;

3) providing award information from the partner 204 to the mileage tracking

and reward system 202a;

4) awarding miles from a partner 204 to a member 206; this is preferably

done electronically, however, in alternate embodiments this could be done

by paper coupon, electronic coupon or certificate. Further, it may include

confirmation by some type of physical receipt or record. 5) providing account information from the miieage tracking and reward

system 202a to a member 206;

6) awarding mues from the mileage tracking and reward system 202a to a

member 206;

^~) requesting or redeeming miles by a member 206 to the miieage tracking

and reward system 202a for the award of an airline ticket;

S) sending an authoπzation to purchase an airiine ticket from the mileage

tracking and reward system 202a to the redemption agent 210;

9) sending flight and other travel information from trie member 206 to the

redemption agent;

10) purchasing the ticket from the airline 208 by the redemption agent 210;

11 ) delivery of the ticket from the airline 208 to the redemption agent 210;

12) delivery of the ticket from the airline 208 to the member 206. and

13) delivery of the ticket from the redemption agent 210 to the member 206.

This is an alternative to 1 1 and 12. The delivery of the ticket is preferably

done by providing an electronic ticket.

The above functionality provides a geneπc mileage loyalty award program that is

particularly advantageous because through the use of electronic transactions, much of the

administrative cost associated with a program is eliminated. The program is also

advantageous because it allows the reward to be travel on any airline, at any time, and

moreover provides several partners that each has the flexibility to provide multiple ways

for members to earn miles. Referring now to Figure 2B, a diagram of a second emoodiment for the global

generic mileage loyalty system 200 of the present invention is shown. The second

embodiment of the system 200 is similar to the first embodiment, thus, like reference

numerals are used for like com^ponents in Figure 2B. The most notable difference

between the first embodiment 202a and the second embodiment 202b is that the

redemption agent 210 is eliminated in the second embodiment, and is integrated as part of

the mileage tracking and re ard system 202b. In this embodiment, the mileage tracking

and reward sy stem 202b includes modules or units to communicate with the airlines 208.

This is preferaply done by w ay of application programs that interface the miieage

tracking and reward system 202b to the computers for ticketing and reservation of the

airlines 208. Thus, the interactions 8- 1 1 and 13 noted above are replaced by interactions

where the mileage tracking and reward system 202b communicates with the member 206

to provide airiine ticket. In particular, the second embodiment includes such interactions

as: 1 ) sending flight and other travel information from the member 206 to the mileage

tracking and reward system 202b; 2) purchasing the ticket from the airline 208 by the

mileage tracking and reward system 202b; 3) delivery of the ticket from the airline 208 to

the mileage tracking and reward system 202b; and 4) delivery of the ticket from the

mileage tracking and reward system 202b to the member 206. While preferably the

processing within the mileage tracking and reward system 202b is electronic, some of the

interactions may be done manually and combined with the web interfaces with the

members 206 and partners 208.

One of the key aspects of the system 200 of the present invention is that the

member loyalty reward is very attainable. This is accomplished in two ways as illustrated by Figure 3 First, with the svstem 200 of the present invention, there are is a number of

partners 204a-f from which miles can be received. In contrast, the oπor an typically

provides very limited sources or partners for earning miles. igure 3 illustrates by way of

example some oroaα categoπes of partners 204a- f. Wholesale or cnannel partners 204a

are partners mat purchase significant numbers of miles and then in turn orovioe them to

other retailers or merchants tor use in completing, increasing or generating sales. A retail

partner 204b is a partner that uses the miles as a loyalty tool to motivate the purchase of

goods or services from that retailer as opposed to other retailers, and as a motivation to

come back ana by more An employer partner 204c is an example ot an empiover that

uses miles as a tool to motivate the performance of certain activities or behaviors or as a

reward for accomplishment ot goals. An off-line partner 20^-d is a partner that awards or

gives miles to a member 206a pπmaπly for off-line (non-Internet) activities such as in

store purchases or other vaπous activities. The on-line partner 204f in contrast is a

partner that awards or gives miles to member 206a pπmaπly for on-line ( Internet)

activities such as clicking on an icon, reading an advertisement, sending e-mail.

purchasing on-line, etc The credit card partner 204e is a partner that provides the

member 206a with miles for using a particular credit card they issue. Finally, the

member 206a can also receive miles from other members 206b. For example, one

member 206b may give miles to another member 206a for a special occasion sucn as an

birthday, anniversary, etc Also, the system 202a may give miles away to members 206a

for other activities such as signing up as a member, refemng another who signs up,

completing surveys, taking a particular airline flight, or signing up for special

promotions Second, the system 200 of the present invention provides a number of activities

other than just purchasing goods or traveling on a flight as vvavs to earn miles. This is

significant because it increases the likelihood in the mind of the member that the

incentive, a free airline ticket, is attainable. By offering rewards with a high perceived

value, the loyalty program of the present invention motivates the memoers 206 to

perform a vaπety of behaviors. The prospect of earning miles entices the members to

perform as many of the mileage-earning behaviors as necessary to reach the desired

redemption levels. The s\ stem 200 of the present invention advantageously rewards a

number of behaviors on the internet and even for Intranet activity A sample iist of

Internet and Intranet behaviors that are rewarded with the present invention include:

Internet - read articles, send e-mail, perform click-throughs. purchase

subscnptions/renewals, order product information, place ad on home page, refer

merchants, refer friends, purchase products, purchase services, enter contests or

sweepstakes, register software or products, complete surveys, download software, accept

web browser cookies, join clubs, participate in chat groups, reward a preference

bookmark, reward a preference home page, purchase gift certificates. Intranet - read an

on-line employee manual, complete surveys, take classes on-line, read articles, take tests,

complete reports, conduct on-line interviews, conduct on-line chat sessions, conduct

company evaluations, perform routine tasks, write government on industry issues,

contπbute to employer-sponsored charities, read company memos. The behaviors that

can be rewarded with the present invention are limitless and ever expanding. Thus, with

number of ways to earn miles, the system 200 of the present invention is much more

attractive to members 206 than any existing system in the pπor art. Svstem Hardware

Refemng now to Figure 4. a high-level block diagram of the system 200

constructed according to the ^present invention is shown. The system 200 preferably

compπses the miieage tracking and reward system 202, a plurality of workstations 404, a

plurality of personal computers 406, ano a plurality of servers 408 coupled to

communicate with each other v ia the Internet or world wide web 410. The workstations

404, personal computers 406 and servers 408 are used by partners 204. members 206. and

the redemption agent 10 to access and communicate with the mileage tracking and

reward system 202 The workstations 404 and servers 408 are or a conventional type

known to those skilled in the art. and are web enabled to include a browser such as

Internet Explorer by Microsoft or Navigator by Netscape. Similarly, the personal

computers 406 are of a conv entional type such as the IBM compatible based on an X86

processor from Intel or a multi-processor system using a UNIX operating system

Refemng now to Figure 5A, the mileage tracking and reward system 202 is

shown in more detail. The preferred hardware architecture tor the mileage tracking and

reward system 202 includes a first web server 502, a first application server 506, a

database server 510 and a disk array 514. The first web server 502 is preferably a

conventional type for providing access to the Internet 410 including the hosting of web

pages and providing for the retπeval of data from connected users. The first web server

502 preferably has an independent connection to the Internet 410. The first web server

502 is, for example, a Sun E250 server including web sever software from Netdynamics.

The first web server 502 is coupled to a respective application server 506 The

first application server 506 is responsible for running application software that provides the functionality of the system 202 described above with reference to Figures 2A-3 and

that will be described below particularly with reference to Figures S-13. The first

application server 506 is a conventional type of server, but includes the novel software of

the present invention. For example, the first application server 506 may be a Sun Ultra

Enterpπse 450 server. Essentially, the first application server 506 is connected and

operates under the control of business logic that provides the functionality for

maintaining the geneπc mileage loyalty program and processing transactions and

interactions that have been noted above. The first application server 506 is aiso coupled

to a database server 510.

The database server 5 10 is also a conventional server and may be a Sun Ultra

Enterpπse 450 server. The database server 510 controls the storage and retπeval of

information to and from the database on the disk aσay 514. The database server 510

preferably also includes database software such as Oracle 8 database software for creation

of a conventional database. The database server 510 maintains transactions records, and

user profiles in response to instructions received from the applications servers 506. 508.

The database server 510 may also include additional software to perform data mining on

the database.

Refemng now to Figure 5B. a second and alternate embodiment of the hardware

architecture for the mileage tracking and reward system 202 is shown. The second

alternate embodiment includes a second web server 504 and a second application server

508 in addition to the components identified above for the first embodiment. The first

and second web servers 502. 504 are preferably conventional types for providing access

to the Internet including the hosting of web pages and providing for the retπeval of data from connected users. Each of the first and second web servers 502. 504 preferably has

an independent connection to the Internet 410. The first ano second vveo servers 502, 504

are preferably also coupled to eacn other for load balancing purposes for times when one

server 502. 504 is handling a higner volume of traffic than the other. The first and second

web servers 502. 504 are. ιor example. Sun E250 servers including weo sever software

from Netdynamics. Those skilled in the art will recognize that while onlv two web

servers 502, 504 are shown, the system 202 may be modified as need to provide

additional vveo serv ers, each prov iding another connection to the Internet 410 In this

second embodiment, each of the first and second web server 502. 504 is coupled to a

respective application serv er 506. 508 The first and second application servers 506, 508

are responsible for running application software that provides the functionality of the

system 202 descπbed above with reference to Figures 2A-3 and that will be descπbed

below with particulaπty in Figures 8- 13 below. The first and second application servers

506, 508 are each a conventional type of sever but include the novel software of the

present invention. For example, the first and second application servers 506, 508 are Sun

Ultra Enterpπse 450 servers Essentially, the first and second application servers 506,

508 are connected and operate under the control of business logic that provides the

functionality for maintaining the geneπc mileage loyalty program ana processing

transactions and interactions that have been noted above. Each of the first and second

application servers 506, 508 is also coupled to a database server 510

Figure 6 shows a high-level block diagram of a preferred embodiment for the

application server 506/508 of the present invention. While the following descπption will

focus on the first application sever 506, those skilled in the art will recognize the that second application server 508 preterablv has a similar hardware and software

configuration The application server 506 preferably compπses one or more central

processing units or processors 602 that connect with a memorv 604. an output or display

device 606. a data storage dev ice 612. an input device 614 and a network interlace 016.

The processor 602. memorv c04 output device 606. data storage device b l2. input device

614 and network interface t> 16 are preferably coupled in a von Neuman tvpe architecture

v la a bus 608 such as a personal or mini computer The processor t>02 is preterablv a

microprocessor such as a Sun L ItraSparc. PowerPC or an Intel Pentium III. the output

device 606 is oreierablv a v ιαeo monitor, and the input device 614 is preterablv a

keyboard and mouse-type controller The memory 604 preferablv includes random

access memorv (RAM) and read-only memory (ROM) The processor 602 is coupled to

the data storage device 612 such as a hard disk dπve in a conventional manner The

processor 602 is also coupled to the network interface 616 such as Ethernet in a

conventional manner tor connection to a network v ia line 618 and other computers such

as v la a local area netvv ork. w ide area network or the Internet Those skilled in the art

will realize that a v aπety ot di fferent networking configurations and operating systems

including token πng, Ethernet, or Arcnet may be used and that the present invention is

independent of such use While the first application server 506 has been noted to

preferably be a Sun L ltra Enterpnse 450 server, those skilled in the art will realize that

the first application server 506 could also be implemented as any one of a vaπety of other

computers such as those made by Apple, Digital Equipment Corporation, IBM, or IBM

compatibles The processor 602 operates under the control ot the memory 604 to process

the transactions and interaction as will be descπbed in more detail Refemng now to Figure 7, the preferred embodiment of the memory 604 of the

first application server 506 is shown in more detail The memorv 604 is preferably a

random access memorv (RAM), but may also include read-only memory (ROM). The

memory 504 oreferaoly compπses an operating system 702. a mileage transfer unit 704, a

account balance detection unit ^"06. a fraud detection unit 708. a transaction history unit

710, an account status unit 71 . an advertising unit 714, a redemption umt 716. a unit for

system administration and secuπtv 18, and an award notification unit 720 The memory

604 may also include a v aπetv ot different application programs including but not limited

to web page processing, data processing, server interface and communication programs.

The routines of the present inv ention control the interaction of the partners 204 and the

members 206 with the mileage tracking and reward svstem 202

The operating system 702 is a conventional type such as Sun Solans. Those

skilled in the art will realize how the present invention may be readily adapted for use

with other operating systems such as UNIX, Macintosh System Software, DOS .

Windows or Windows NT

The mileage transfer unit 704 preferably compπses the routine for transferπng

miles from the system 202 to a partner 204 The operation of the mileage transfer unit

"04 is descπbed below in more detail with reference to Figure 9 The mileage transfer

unit 704 also processes transactions to transfer miles from a partner 204 to a member 206

as descπbed in more detail with reference to Figures 8, 1 1 A and 1 IB

The account balance detection unit 706 includes routines for processing mile

transfer transactions, and determining whether additional notifications should be

generated The account balance detection unit 706 preferably generates electronic notifications in two instances. 1) if a partner has a mileage account balance less than a

preset threshold; and 2) if a member has accumulated miles sufficient to redeem the miles

for an award. The operation o the account balance detection unit 706 is oescπbed below

in more detail with reference to Figures 10A and 10B.

The traud detection unit 708 includes the routines to control the processor 602 to

detect fraudulent transactions As mileage transfers are processed, the system 202

performs tests to veπfy the accuracy of the transactions and ensure that miies are

conectly a arded to the proper members 206 as the transactions are received from the

partner 204 The operation oi the fraud detection unit 708 is descnbed in more detail

with reference to Figures 1 1 A and 1 IB, below.

The earning notification unit 720 includes routines for notifying the members 206

of opportunities to earn miles The earning notification unit 720 preferably includes

routines for proactively directing members 206 to partners 204 and to perform specific

behaviors to earn miles to reach an award level. This can include both identification of

the behavior as well as notification of possible travel destinations that are possible with a

given award level. The earning notification unit 720 includes the generation of emails

and other communications w ith the members 206. For examples, such communications

may include last minute deals, offers of bonus miles, specials, sales or other incentives

provided based on partner inventory or partner input on behavior the partners are

interested in motivating The earning notification unit 720 can also generate and

maintain a chat room, and provide messages on an automatic basis listing vanous

strategies to earn more or the maximum number of miles, as well as what other members

206 have done to earn miles The transaction history unit 710 includes routines for captunng all transactions

processed by the system 202. The transaction history unit 710 creates a record of all

processed transactions that can be used at a later time to identify abnormalities in

transactions, and also as a confirmation records in response to lnαuiries from either

partners 204 or members.

The account status unit 712 includes the routines and templates for presenting

account status data to a requesting partner 204, member 206 or the redemption agent 210.

The account status unit 712 includes routines for querying the database server 5 10 for

data and the using the returned data by inserting it into HTML web pages for presentation

to the requesting partner 204, member 206 or the redemption agent 210. The operation of

the account status unit 712 is descnbed in more detail with reference to Figure 12. below.

The advertising unit 714 includes modules and routines for processing

advertising. Such processing includes storing and updating advertising stored in the

database 512. It also includes the presentation of such advertising such as banner

advertising in a conventional manner, but in conjunction with the presentation of other

information to the partners 204 and members 206. The advertising unit ⁷14 also includes

a conelation or target unit (not shown) so that particular advertising may be targeted to a

particular partner 204 or member 206 based on their profile in the database 51 or based

on the interaction or activity for which they are communicating with the system 200. The

advertising unit 714 performs selected steps in the methods of the present invention such

as in Figure 10B.

The redemption unit 716 includes software modules and routines for controlling

the first application server 506 for processing requests from members 206 to redeem accrued miles for airline tickets The redemption unit 716 includes routines for handling

the redemption of miles in an entirely electronic process, where the svstem 202. the

member 206 and the redemption agent 210 interact by electronic means such as via the

Internet and browsers The redemption unit 716 also includes routines for handling the

redemption of miles in a nvbπα environment where some of the steps of the method are

performed electronically and some of the steps are performed bv a human operator or

user. The operation of the redemption unit 716 is descnbed in more detail with reference

to Figure 13. below

Finailv. the memorv oU4 includes a unit for system administration and secunty

718 This unit 71 S includes the routines necessary for maintenance of the system, back

office operations, and monitoπng This unit 718 also handles the initialization of

accounts, the addition of new members 206 and partners 204, and the secunty such as the

maintenance of passwords This is generally performed in a conventional manner as will

be understood to those skilled in the art.

Methods and Software

Refemng now to Figure 8 through Figure 13, the prefeπed methods for operation

of the above mileage tracking and reward system 202 will be descnbed in more detail.

Figure 8 illustrates the general method for operation of a loyalty program for

providing, awarding and redeeming geneπc miles. The process begins in step 802 with a

partner 204 purchasing miles from the mileage tracking and reward system 202 The

present invention advantageously requires that a partner 204 purchase the miles pπor to

awarding them to anv customers or members 206 Still more particularly, the ^present invention requires that the miles be purchased in bulk, in predefined amounts. This will

be descnbed further below with reference to Figure 9. Once the partner 204 has

established an account and has miies. the partner 204 may distribute or award the miles as

desired m step 804. The paπner 204 has complete discretion to award miles I ) to

whomever. ) in vvnatever amounts. 3) for whatever behavior the paπner 204 wants to

promote. The partner 204 awards the miles to a paπicular member 206 in step 804.

Exemplary such behaviors have been descnbed above with reference to Figure 3. Then in

step 806. the member^' s account is updated by the system 202 to reflect the awarded

miles. In step 808, the method tests whether the member 206 has sufficient miles to

redeem them for an award. The system 202 sets thresholds of miles that are required for

redemption for travel to different geographic areas at different classes of travel. If the

member 206 does not have sufficient miles to redeem them for an award, then the method

is complete, the user must do additional things to earn miles. However, if the member

206 does have sufficient miles to redeem them for an award, then method continues in

step 810. In step 810. the member requests an airline ticket and provides the prefeπed

destination, travel times and earner. Then in step 812, the system 202 purchases the

ticket for the member 206 and in step 814 delivers the ticket (identification number, if

electronic ticket) to the member 206. In the prefeπed embodiment, steps 802- 14 are

preferably performed electronically, thereby eliminating much of the paperwork and

administration associated with loyalty programs. However, certain steps of the method

may be performed manually without departing from the spirit and scope of the present

invention. 1 One particulars advantageous feature of the present invenπon is the transfer of

2 miles from the mileage tracking and reward system 202 to a partner 204 Since it is done

2 electromcallv. this enables the svstem 202 to accommodate manv partners 204. thus.

enhancing the ov erall value of the loyalty program Figure 9 shows the orerεπed method

i for transfernng miles rrom the mileage tracking and reward svstem 202 to a partner 204

6 in accordance with the preteπed embodiment of the present invention The present

ⁿ method assumes that the partner 204 has already created an account in the mileage

5 tracking and re ard sv stem 202 using conventional metnods The account creation

9 would include the assignment ot a unique identification number (Vv ebMiles identification

0 number) and a user-defined password The method begins in step 902 w ith the partner

1 204 establishing a communication link with the first application sen er 506 ( M server)

12 including the identification and venfication of the partner 204 This is performed by

13 having the partner 204 prov ide its WebMiles identification number and password which

14 are compared to the information in the database 512 While the method is descnbed in

15 terms of actions taken bv the first application server 506 or WM serv er 506, it should be

16 understood, that the partner 204 or member 206 may alternatively interlace with the

17 second application server 508 in an identical manner Then in step 904 the partner 204

18 sends a request to the WM server 506 for the purchase of miles This may be done with

19 user interaction via a computer and web browser at the partner site, or it may be done

20 automatically in response to a routine running at the partner site Next, the method

21 continues with the WM sever 506 presenting a plurality ot options for purchasing miles

22 in step 906 The present invention preferably does so by presenting options tor

23 purchasing miles in bulk lots of pre-defined numbers of miles For example, bulk lots of 100,000 miles are prefeπed. The present invention advantageously provides volume

discounts based on the number of miles purchased. Next, m step 908. the partner 204

selects one of the pre-defined bulk amounts and submits the selection electronically.

Then in step 910, the WM sever 506 determines the price for the miles by accessing a

schedule in the database 512. Different pnces may be provided for different partners 204

based on their relationship with the system 202. Thus, the present invention accesses the

information in the database 512. and then sets the price for miles based on the

information returned. Then in step 912, the partner 204 confirms the purchase of the

number of miies at the pnce presented in step 910. In step 914. the partner pays for the

miles. This can be done using any number of conventional funds transactions such as

credit card, wire transfer or company check. Finally, after the funds for payment are

confirmed as received, the WM server 506 credits the partner's account with the

requested number of miles, and the process is complete.

Refemng now to Figures 10A and 10B, the two forms of mile balance detection

provided automatically by the mileage tracking and reward system 202 will be described.

Figure 10A is a flowchart of a prefeπed method for detecting an account balance of miles

for a partner 204 in accordance with the prefeπed embodiment of the present invention.

When detecting the mileage account balance for a partner 204. the purpose is to ensure

that the number of miles does not fall below a minimum, guaranteeing that any awards

the partner 204 provides will not be rejected. Therefore, the test is whether the account

balance is above a preset threshold.

The method begins in step 1002 with WebMiles and the partner 204 setting an

account balance threshold below which they do not want the partner's balance to fall from one of a plurality of thresholds provided by the system 202a. This is preferably

done upon creation of the partner account, however, the threshold could be modified by

the partner 204 at any later time After some indeterminate time after the paπner 204 sets

a minimum balance threshold in step 1002, the partner 204 will use the account in a

normal and expected fashion. Part of that usage is the awarding ot miles to members 206,

and thus, requesting that miles be transfeπed to a member 206 in step 1004 In the

prefeπed embodiment, the request is in the form of the processing of a batch file by the

WM server 506 The batch file has a plurality of miles transfer transactions from the

partner 204 to vaπous memoers 206 In response to the reαuest. the WM server 506

deducts miles from the partners account in step 1006. Then in step 1008. the WM server

506 credits miles to the member^'s account. In step 1010, the WM server 506 then

compares the balance of the partner's account to the threshold preset in step 1002. In step

1012, the method tests hether the partner's account balance is above the threshold. If

so, the method is complete and ends. If partner's account balance is not above the

threshold, the method proceeds to step 1014. In step 1014, the WM server 506 extracts

the e-mail address, the account balance and the number of pending miles from the

database 512. The pending miles are a list of miles marked for transfer to a member's

account, but that have not been deducted from the partner's account. In essence, the

pending list provides the partner 204 with an indication of the number ot miles that will

be deducted from their account in the near future. Finally, in step 1016, the WM server

506 uses the information from step 1014 and inserts it into a template for an e-mail and

sends the e-mail to the person at the partner company responsible for maintaining the

account of the partner. In an alternate embodiment, step 1016 could be replaced with the automatic generation of the purchase of miles similar to the descnption for Figure 9, but

automatically generated and having pre-authoπzed purchase levels.

The second form ot mile balance detection provided automatically by the mileage

tracking ano reward system 202 is the accumulation of a pre-defined levei o miles by a

member 206 Automatic account balance detection for members 206 tests wnether their

account balance is aoove a predefined threshold, thus entitling the member to an award,

or free airline ticket In an alternate embodiment, the account balance detection unit 706

also provides account information to the earning notification unit 720 for use in

suggesting ways of earning more miles to reach an award level, and provide bonus miles

for vanous behaviors. Figure 10B is a flowchart of a prefeπed method for detecting an

account balance of miles for a member 206 m accordance with the present invention. The

method begins in step 1050 with the mileage tracking and reward system 202 setting the

number of miles needed to exchange the miles for vaπous rewards. One of the key

advantages of the loyalty system of the present invention is that it is structured to offer

simple and flexible with re ards that are attractive and attainable. Achieving mileage

balances wiil inspire behavior modification in customers resulting in a successful and

profitable program. The sample rewards matπx shown in Table I is structured to entice

the consumer to respond and become a loyal customer in order to reach the redemption

levels as quickly as possible

.77- WebMiles Reward WebMiles Needed for Reward

Coach Business 1" Class

: S10O credit towards anv flight 8.000 l -

Free round tnp within 48 contiguous states or 25,000 -

! Canada j From US (48) to Mexico/ Central America 35,000 50,000 ' ^0.000

I From Alaska/ HI to Mexico/Caπbbean/Canada 40.000 55.000 ; 75.000

From US-(50) to South Amenca 60.000 ^5.000 ■ 95.000

From Alaska/Hawaii to Europe 60,000 100.000 . 120.000

From US (501 to Asia/South Pacific 80,000 j 100.000 i 150.000

From US (50) to Australia/New Zealand 70,000 1 15.000 150.000 Table I

In an exemplary embodiment, the mileage award levels from Table I are used as

the thresholds for award by the WM server 506. The WM server 506 can also use the

award descπptions from the Table I as text for generated messages as will be described

below. Next in step 1052. hich is some indeterminate time after step 1050. a partner

204 requests the transfer of miles to a member 206. As described above, the WM server

506 deducts miles from the partner^'s account in step 1054. Then in step 1056. the WM

server 506 credits miles to the member's account. In step 1058. the WM server 506 then

compares the balance of the member's account to the thresholds set in step 1050. In step

1060, the method tests whether the balance of the member^'s account is above any of the

thresholds. If not, the method is complete and ends. On the other hand, if the member's

account balance is above any of the thresholds, the method continues in step 1062. In

step 1062, the system 202 extracts the e-mail address and the account balance of the

member from the database 512. Then in step 1064, the WM server 506 retrieves from the

database 512 a descnption of the free airline tickets for which the miles can be

exchanged. Further, the WM server 506 may use the advertising unit 714 to retrieve advertising and other images that can be sent to the memoer 206 including possible use

for the accrued miles. For example, the advertisements mav oe selected travel

destinations, or hotels or other se ces at the destinations for which miles may be

redeemed. Finally, in step 1066. the WM server 506 uses the information rrom step 1062

and 1064 and inserts it into an template for an e-mail and sends the e-mail to the address

for the member 206 The e-mail preferably includes a notification to the memoer 206 that

enough miles for an award have been accrued, the account balance in miles, award

eligibility, advertisements, and information on how to redeem the miles for an award.

Those skilled in the art will recognize that vanous other torms oi communication such as

regular mail could be used in place of e-mail. In alternate embodiment, the method of

Figure 10B could be modified to notify the members 206 when they are close to or within

pre-defined amounts of the next award level. This could be coupled with the presentation

of vanous behaviors, that if performed by the member 206 would put their mileage

account balance above the level needed for a particular reward

Yet another teature ot the present invention is that the mileage tracking and

reward system 202 includes a number of mechanisms to ensure that the transfers of miles

from partners 204 to member 206 are authonzed by the parry giving or awarding the

miles Figures 1 1A and 1 IB show a prefeπed method for detecting fraudulent mileage

transfers in accordance with the present invention. The preteπed method begins in step

1 102 of Figure 1 1A with the each partner 204 setting a maximum number of miles that

may be transfeπed in any one transaction. This is preferably set upon initialization as a

partner 204, but could be changed at any time This information is preferably

communicated to the mileage tracking and reward system 202, and stored in the database 512 in step 1104. At some time later, the method continues in step 1 106 with the partner

204 sending a transaction file to the WM server 506 As noted above, the partner 204

transfers miles to several memoers 206 using a batch file that is sent to the WM server

506. which includes a number of transactions. Next in step 1 108. WM server 506

determines the maximum per transaction mileage transfer allowed by this partner 204.

This is preferably done by querying the database 512 using the paπner s WebMiles

identification number The method continues in step 11 10 by getting the next transaction

the transaction file Then in step 1 1 12. the WM server 506 compares the number of

miles peing transteπed in the transaction to the maximum determined in step 1 108. If the

miles being transfeπed is greater than the maximum, the transfer is not processed, but

instead the method performs step 1 1 14 and adds the transaction to a iist of unprocessed

transactions, after which the method continues to step 1 120 to test whether there are

additional transactions to process If the number of miles being transteπed is not greater

than the maximum, the method proceeds from step 1 1 12 to step 1 1 13. In step 1 1 13, the

method determines whether the transaction is a duplicate. To prevent mistaken awards of

miles, the method of the present invention advantageously compares the transaction to the

existing transactions already processed. In one embodiment, this is performed by

companng the transaction to the transactions in the list of pending transactions. In an

alternate embodiment, this is performed by both companng the transaction to the

transactions in the list of pending transactions and performing a query on the system

database 512 to check for duplicate records. If the transaction is a duplicate, then the

method proceeds to step 1 1 14, and adds the transaction to the list ot unprocessed

transactions. If the transaction is not a duplicate, then the method continues in step 1116. I In step 1 1 16. the WM server 506 performs additional fraud detection on the transaction.

7 For example, the WM server 506 checks to maker sure that ail required fields are m the

3 transaction record. Those skilled in the art will recognize that vaπous other additional

4 fraud detection steps couid also be performed at this step. Then in step 1 1 18. the WM

5 server 506 adds the transaction to the list of pending transactions. Next in step i 120, the

6 method test whether there are additional transactions in the transaction file that need to be

7 processed If there are. the method loops back to step 1 1 10 to process the remaimng

8 transactions If there are not. the method continues in step 1 122 of Figure 1 I B. The

9 present invention provides an additional secunty measure of keeping transaction in a

10 pending list for a pre-determined about of time. This provides a window of time in which

I I if a transaction is identified as fraudulent, then the transfer of miles can be prevented or

12 undone. In step 1 122. the transactions in the list of pending transactions are partially

13 processed The transactions are preferably date stamped and logged in the list of pending

14 transactions The miles for the transaction are debited from the partner's account by

15 effectively placing a nold on the account for the number ot miles in the pending list.

16 Next m step 1 124, the miles in the pending list may be shown to both the partners 204

17 and the members 206 Step 1 124 is completely optional and may be omitted or activated

IS only in response to an inquiry from a partner 204 or a member 206. In step 1 126, the

19 transactions are delayed from further processing for a pre-determineα amount of time. In

20 the pretened embodiment, this pre-determined amount of time is set by the partner 204

21 and the WebMiles system 202b such as thirty days. After 30 days from the date stamp

22 for the transaction provide in step 1 122, step 1 128 finishes processing of the pending list

23 of transactions by debiting miles from the partner account and crediting the miles to the member account identified in the transaction. Then in step 1 130. the WM server 506

records the transaction in a transaction history log. This transaction history log provides

a full accounting of the disposition for all miles that have been transfeπed. The

transaction history log can aiso oe reviewed later to prevent repeat instances of fraudulent

activities by members 206 or partners 204 Next in step I ^] 32. the WM server 506

retrieves the partner address and account balance from the database 12 Then in step

1 134. the method retnev es the list of all unprocessed transactions for the transaction file.

Finally, in step 1 1 6, the WM server 506 generates and sends and e-mail notification to

the partner 204 identif ing anv unprocessed transactions. Those skilled in the art will

recognize that if the list of unprocessed transaction is empty, then step 1 1 2- 1 136 may be

omitted.

One aspect of the present invention is that many if not all the process step with the

system 200 may be performed electronically via the World Wide Web One feature

important to both partners 204 and members 206 alike is the ability to check the mileage

in an account to ensure it is accurate and up to date. The present invention provides this

functionality with the WM server 506, the computer of the member or partner and a web

browser. The prefeπed process for providing this account information is shown in Figure

12. Figure 12 illustrates the prefeπed method for communicating with the system 202 of

the present invention to determine mileage account balance for a partner 204 or member

206. The method begins with the partner 204 or member 206 establishing a link with the

WM server 506 for account inquiry Then in step 1204, the partner 204 or member 206 is

identified and their password is venfied. The WM server 506 next retneves the account

information from the database 512 in step 1206. Then in step 1208. a web page is created

_{- -} 1 and the account information is inserted as part of the weo page. Next in step 1210, the

mileage information from the pending list is retnev ed Then the web page is updated

with the mileage from the pending list determined in step 1210 In step 1214. the web

page is downloaded from the WM server 506. througn a weo server 502 to the computer

of the partner 204 or memoer 206 Fmallv, all the account information can be viewed by

6 the requesting partv at the paπner 204 or member 206 site

Figure 13 shows a prefeπed method for redeeming miles for travel awards in

8 accordance ith the present in ention For the redemption process, in particular, it

9 should be understood that certain ot the process steps mav be periormeα manuailv in

0 person or by telephone, ev en though it is prefened that all the step be performed using

1 computers and the Internet The method begins with the member 206 establishing

2 contact with a redemption agent 210 The redemption agent 210 then receives the

3 WebMiles identification information from the member 206 Then in step 1306. the

14 redemption agent 210 venfies that the WebMiles identification infoπnation and the

i eligibility of the member 206 Λs has been descnbed above, the redemption agent 210

16 can connect to the WM server 506 and v iew the account status of the member 206 Then

17 m step 1308, the redemption agent 210 aπanges travel for the member 206 The

18 redemption agent 210 must communicate with the member 206 Then in step 1310. the

19 redemption agent 2 10 generates a travel request record The travel request record

20 preferably includes the name, address, social secunty number, WebMiles user

21 identification number, etc The redemption agent 210 completes the travel request record

22 and sends it to the WM server 506 The WM server 506 updates the member account to

23 include travel and booking information so that it may be viewed on-line by the member 206. Next in step 1316. the WM server 506 deducts the miies from the member^'s account

according to the award that is identified in the travel request record. Then the WM server

506 aπanges for payment of the redemption agent 210 such as through account credit,

VISA, wire transfer or check. Finally, in step 1320 the redemption agent secures airline

ticket from airiine 20S and delivers the ticket to the member 206 or in the case of an

electronic ticket, notifies the member 206 about the particulars of the ticket such as the

electronic ticket identification number provided by the earner. If a paper ticket was sent,

the tracking or reference number can be used to ensure that the member 206 receives the

ticket.

It is to be understood that the specific mechanisms and techniques that have been

described are merely illustrative of one application of the principles of the invention.

Numerous additional modifications may be made to the apparatus descnbed above

without departing from the tnie spirit of the invention.

Claims

WHAT IS CLAIMED IS:

1. A system for electronically awarding and redeeming ioyalty units between

a member, a partner and a tracking and reward unit, the system compπsing:

a member unit capaoie of being electronically coupled to the loyalty system for

determining a number of loyalty units earned and redeeming the loyalty

units for awards;

a partner unit capable of being electronically coupled to the loyalty system for

purchasing ioyalty units, providing information on distribution of loyalty

units, and determining a number of loyalty units available; and

a tracking and reward unit capable of being electronically coupled to the partner

unit or the member unit for communication therewith, the tracking and

reward unit maintaining accounts indicating a number of loyalty units

associated with each partner unit and member unit, transferring loyalty

units between accounts, redeeming the loyalty units for awards, and

providing information to the partner units and the member units indicating

number of lovaitv units available and the number of lovaitv units earned.

The system of claim 1 wherein the loyalty units are geneπc frequent flyer

miles.

3. The system of claim 1 wherein the loyalty units may be redeemed for a

ticket on any airline, anywhere in the world at any time.

- O-

4. The system of claim 1 wherein the tracking and reward unit further

compπses:

a web server for communicating over an Internet, the web server sending and

receiving web pages and data;

a database sever and a disk aπay for stonng, retneving and maintaining accounts

indicating a numoer of loyalty units associated with each partner unit and

member unit; and

an application server coupled to the web server and the database server fro the

application sen er transferring loyalty units between accounts, redeeming

the loyalty units for awards, and providing information to the partner units

and the member units indicating number of loyalty units available and the

number of loyalty units earned.

5. The system of claim 4 wherein the application server further comprises a

mileage transfer unit, the mileage transfer unit controlling the application server to

cooperate with the database sever and the disk aπay for the electronic transfer of loyalty

units between accounts.

6. The system of claim 4 wherein the application server further compπses an

account information unit, the account information unit controlling the application server

to cooperate with the web server, the database sever and the disk aπay for the electronic

retrieval of account information, history and status and for transfer of that information to

a requesting partner unit or member unit via the web server.

~. The system of claim 4 wherein the application server further comprises a

fraud detection unit, the fraud detection unit controlling the application server to

cooperate with eb sεn'er, the database sever and the disk aπay for electronically

verifying the tracking and reward unit transfers, and detecπng and nullifying fraudulent

transfers.

8. The system of claim 4 wherein the application server fuπher comprises an

automatic notice generation unit, the automatic notice generation unit controlling the

application sener to cooperate with the web server, the database sever and the disk aπay

for the automatic generation and transmission of notification of mileage balance levels,

and the availability of awards for redemption.

9. The system of claim 4 wherein the application server further comprises a

redemption unit, the redemption unit controlling the application server to cooperate with

the web server, the database sever and the disk aπay and a redemption agent for the

automatic generation and delivery of awards, and the transfer of miles for redemption.

10. A method for operation of a loyalty program for providing, awarding and

redeeming geneπc miles, the method comprising the steps of:

purchasing miles from a mileage tracking and reward system by a paπner;

distributing miles by a partner to a member;

updating a member account by the mileage tracking and reward system to reflect

the distributed miles; determining whether a member account has sufficient miles to be eligible to

redeem them for an award;

if the member has sufficient miles to redeem them for an award, then receiving

information from the member as to the award, purchasing the award for

the member, and dehveπng information that sufficient for the member to

redeem the awaro: and

wherein the steps of distnbuhng, updating and deteπmmng are performed via

electronic communication between the mileage tracking and reward

system, the partner and the member

1 1. The method of claim 10, wherein the step of purchasing miles is

performed pπor to the distπbuting step.

12. The method of claim 11 , wherein the miles are purchased in bulk and in

predefined amounts.

13. The method of claim 10, wherein the step of purchasing miles includes the

step of establishing an account of miles with the mileage tracking and reward system.

14. The method of claim 10, wherein the step of purchasing miles includes the

steps of:

establishing a link between the mileage tracking and reward system and a partner;

sending a request from the partner to the mileage tracking and reward system for

more miles; 6 selecting one of a plurality of pre-defined amounts of miles by the partner;

deterrnining a pπce for the selected amount of miles:

8 paying the miieage tracking and reward system by the paπner for the miles; and o crediting the account of the partner with the selected amount of miles.

1 15. The method of claim 10. wherein the step of distnbuting miies includes

2 the step of awarding miles for the performance of a desired behavior by a member.

16. The method of ciaim 15, wherein the desired behavior bv a member is one

7 from the group of reading articles, sending e-mail, performing c ck-fhrougns. purcnasing

3 subscnptions/ renewals, ordenng product information, placing an ad on home page,

4 refemng merchants, refemng friends, purchasing products, purchasing services, entering

5 contests or sweepstakes, registering software or products, completing surveys,

6 downloading software, accepting web browser cookies, joining clubs, participating in

¹ chat groups, rewarding a preference bookmark, rewarding a preference home page, and

8 purchasing gift certificates.

1 17. The method of claim 15, wherein the desired behavior by a member is one

2 from the group of reading an on-line employee manual, completing surveys, taking

3 classes on-line, reading articles, taking tests, completing reports, conducting on-line

4 interviews, conducting on-line chat sessions, conducting company evaluations,

3 performing routine tasks, wnting government on industry issues, contributing to

6 employer-sponsored chanties, and reading company memos.

18. The method of claim 10, wherein the step of updating a member account

further compπses the steps of:

determining an account balance for the updated member account;

companng the account balance to balance thresholds for an award; and

notifying the member that the member has sufficient miies that can be redeemed

for the award.

19. The method of claim 18, wherein the step of notifying the member that the

member has sufficient miles further comprises the steps of:

extracting member address and account balance from the mileage tracking and

reward system;

retrieving advertising information from the mileage tracking and reward system;

generating and sending an e-mail to the member using the member address and

account balance from the extracting step and the advertising information

from the retrieving step.

20. The method of claim 10, wherein the step of receiving information from

the member is receiving a request for an airline ticket and provides a destination, travel

times and carrier; wherein the step of purchasing the award for the member is the

purchase of an airline ticket; and wherein the step of delivenng information that sufficient

for the member to redeem the award comprises providing an electronic ticket number and

flight and airline information.