Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Including point of sale terminal or electronic cash register
Reexamination Certificate
1999-06-08
2002-05-28
Cosimano, Edward R. (Department: 2161)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Including point of sale terminal or electronic cash register
C705S018000, C705S050000, C705S064000
Reexamination Certificate
active
06397194
ABSTRACT:
FIELD OF THE INVENTION
This invention relates to data processing system, and, more particularly, to a system and method of scanning and storing transaction documents bearing the signature of at least one party to the transaction. In one preferred embodiment the system and method is used to scan financial transaction/authorization documents, including retail sales receipts bearing retail sales purchaser signatures, and transmitting and storing information obtained off of the documents electronically at a remote database site.
BACKGROUND OF THE INVENTION
Over the last 20 years, credit cards have gained widespread acceptance as a means of paying for goods and services. If the customer is not paying cash for a transaction but instead is charging the transaction cost to a credit card or bank account, a retailer typically may require the customer to sign a charge slip as evidence that the customer is who he says he is and actually purchased or received the goods or services. Retailers commonly save and file these signed paper receipts, and, as will be more fully explained below, forward them upon request to a credit card company or other financial institution as evidence of the transaction.
In order for a credit card transaction to be processed, a merchant must collect a variety of data associated with the transaction. This data typically includes the purchase price and date of the transaction, the account number and expiration date of the credit card, and the cardholder's name and signature. Once this data is collected, the merchant transmits the transaction data, along with its merchant identification code, to a credit card transaction processor. The credit card processor sorts the data according to the company that issued the credit card, and forwards the data to the appropriate company. At that point, the credit card issuer posts the transaction to the cardholder's account and the purchase amount is credited to the merchant. The credit card processor facilitates the flow of information and funds between merchants and credit card issuers.
Formerly, credit card transaction data was recorded, transferred, and stored in the form of paper receipts. Over the years, the credit card industry has developed various types of equipment that provides for the electronic acquisition, transmission, and storage of transaction data. In addition to reducing the industry's reliance on paper records, this equipment expedites the processing of credit card transactions and minimizes errors associated with the entry of transaction data. The equipment includes point-of-sale (POS) equipment used by merchants and computer systems used by credit card processors.
Most merchants employ a cash register system of some type in order to record data associated with transactions, regardless of whether payment is made with cash, check, or credit card. In addition to a cash register, merchants that accept credit cards use other POS equipment to collect data associated with the credit card. This equipment usually includes electronic terminals that read the account number and expiration date from a magnetic stripe on the credit card and transmit the transaction data to the credit card processor. Such equipment may be separate from, or integrated into, the cash register equipment.
In a typical credit card transaction, a cardholder presents a credit card to a merchant, who records transaction data using an electronic terminal. The recorded data includes the amount of the purchase, the cardholder's account number, the card's expiration date, the merchant identification number, and the date of the transaction. In most cases, the cardholder is also required to sign a copy of the receipt.
Once the terminal accumulates the transaction data, the terminal automatically dials the merchant's credit card processor or other authorization source and initiates an authorization request. When the transaction is authorized, the terminal displays and/or stores the approval code or authorization indicia received from the credit card processor. The approval code is recorded along with the other transaction data. The POS equipment typically includes a printer that is capable of printing a sales receipt. The sales receipt includes the transaction data and approval code, and provides a space for the cardholder's signature.
These prior art devices allow numeric data, such as purchase price, date, account number, and merchant identification number to be easily accumulated, stored, and transmitted between the merchant and credit card processor. Consequently, numeric transaction data may be transferred and stored without the use of paper receipts. Although this numeric data is sufficient to process the transaction, it may be insufficient to validate or authenticate a transaction that is disputed by the cardholder. In the event a cardholder questions or denies the legitimacy of a transaction that appears on his or her credit card statement, it may be necessary for the merchant to produce a copy of the signed receipt as evidence that the cardholder was a party to the transaction. Therefore, it is necessary that a copy of each signed receipt be retained by the merchant for some period of time.
However, the handling of signed paper receipts as evidence of a transaction has also become a significant problem. For some time now retailers and the acquiring banks have been concerned with the cost in time and effort associated with dealing with the “request for copy” process. The process starts when a customer, not recognizing an item on his monthly credit card statement, calls his issuer to query the charge. The credit card company rules define the further procedures as follows:
(a) the customer account is credited temporarily pending investigation;
(b) the acquiring bank (or merchant bank) is debited pending investigation;
(c) the retailer is asked by the acquiring bank to produce a copy of the sales slip with the customer's signature on it (about 30% of these slips are not produced by the retailer);
(d) if the retailer cannot produce a sales slip with a valid or legible signature he loses the revenue from the transaction. If the signature is fraudulent, either the card issuer or the retailer stands the loss;
(e) if the retailer produces a valid transaction record, the charge is reinstated in the customer's account and the acquiring bank is once more credited with the transaction value.
About 0.4% of all credit card transactions are challenged in this manner. With the paper-based “signature on file” process, each investigation can drag on for about four weeks before a resolution is reached. The acquiring bank is out of pocket during this period to the extent of the value of the transaction and expends valuable time attempting to resolve the dispute. Recent rules have been introduced by Visa and MasterCard which cause the issuers to provide a strong financial incentive to the acquirers to respond quickly to retrieval requests.
The retailer, in order to service the request for copy efficiently, often installs expensive microfilm systems and is asked to keep copies for up to three years. To service each request someone must physically search out the copy and regenerate an image of the transaction. If the retailer does not install such equipment it is estimated that on an average of up to 30% of the copies cannot be found and the retailer loses the sale revenue under these circumstances. In order to prepare for requests for copy and to reconcile the credit card transactions with the register audit tape, all systems generate an extra copy of the transaction details which are reconciled and batched for processing each day. All this effort is quite costly to the retailer.
This process of retaining and retrieving signed receipts is simplified if the merchant employs POS equipment that allows the cardholder's signature to be digitized, transmitted, and stored along with the numeric data associated with the transaction. In such cases, the signature is digitized as the cardholder signs the credit card receipt. The
Hoenisch Ian P.
Houvener Robert C.
Bourque & Associates PA
Cosimano Edward R.
Image Data, LLC
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