Amazon's Gift-Exchange Patent: Amazon's Cold Brilliance

Amazon has been granted a Patent—filed more than four years ago—to automate the mechanism of gift returns. This is Amazon at its most brilliant and its most antiseptic. This is a programmer's fantasy of ideal gift-giving, where the recipient can preemptively exchange gifts before they're ever shipped. It's a world of the practical (as sizes change, gifts are instantly updated, without the gift-giver's knowledge) and the slightly obnoxious (Aunt Edna has horrible taste so convert everything she tries to send me to a gift certificate).

In the last few days, some have posted that this Patent is inherently rude and disrespectful and warned of the dangers of a computer glitch revealing that a gift was swapped. In this instance, those concerns are misplaced. Consumers have faced that risk for a millennium, when friends or relatives visit and ask where that sculpture of their dog—a birthday gift from last year—is hiding.

What Amazon has done here is thought through many of the reasons for exchanges and automated them away. After all, bad gifts are quite expensive, in terms of packing and shipping something that needs to come back. Given how difficult returns are for consumers using pureplay E-Commerce sites, it can be a disincentive for those purchases.

Lastly, consumers who have filled out very complex profiles are going to push everyone they know to use Amazon for gift-giving. A lot of wins here, especially for Amazon.

For the record, like all patents, filing and even being granted a patent certainly doesn't mean that it will ever be used. In this instance, there's a fine chance it won't be. After all, Amazon thought this all up more than four years ago. Had it wanted to deploy, it's had plenty of time to do so, with the full protection of Patent Pending. But it still might, so let's look into its four-year-old thoughts.

The Patent's essence is that all consumers would fill out these extensive profiles and include lots of rules for friends and family. When anyone tries to send a gift to that consumer—the system looks for nicknames and spelling variances—the rules kick in.

"The rules may take into account any combination of the recipient's purchase and gift history, the sender, the product and product features, product categories, value and timing of the gift, quantity, monetary (e.g., dollar) value, and/or any other pertinent information, in any combination," the Patent said. "The user may be provided with the ability to define the sender in terms of a social network, a category of senders, whether the recipient has typically returned gifts from a particular sender in the past, user-defined rules for senders (e.g., senders having a billing address meeting certain parameters), and so on."

The Patent also offers some creative examples, such as "not another comic strip calendar," converting one media format to another and excluding clothes made from wool. The gift-recipient "may specify a list of all the CDs the user owns" so that all duplicates are instantly converted into gift certificates. (Note how quickly times have changed. It's unlikely "CD" would be used today, instead of downloaded songs.)

There are other reasons today why such a program—managed confidentially—could prove quite kind. What if someone has lost his/her job and really doesn't want stuff, but could use the money? This is a quiet way to convert all such gifts into much needed cash. Even the most sentimental consumer would accept that most gift-givers truly want to give something that will make the recipient happy. This approach—assuming Amazon ever productizes it—will likely double the job. It will make both the gift recipient and Amazon shareholders very happy.