Patent Issued For POS Way To Process Hundreds Of Gift Cards Simultaneously

The U.S. Patent Office has sanctioned a way for retail associates to quickly approve large numbers of gift cards simultaneously, which can come in handy when a business wants 500 cards to give to employees. The question of whether such rapid transactions could open new security holes for the cards—already a favorite with cyberthieves—wasn't addressed in the patent.

The patent was announced Monday (March 7) by inventor First Data. Bizarrely, the government issued the patent some four-and-half months ago, on October 26. We've seen companies announce them right away, delay a week or so, or choose to not announce. But waiting four-and-a-half months was a new one. A First Data exec reached on the phone offered no explanation for the delay.

The patent itself is fairly straightforward, in that the system assumes software will activate the group of cards by scanning (or keying in) the first card number, along with the number of cards sought.

The patent spoke of variations of this approach: "The point-of-sale device can request a confirmation of the last number in the pack of cards. Thus the clerk can either swipe or hand key in the number of the last card that makes up the pack of cards," the patent filing said. "In this way, a check can be performed that the entered total number of cards is actually correct. This can be accomplished by simple calculation using the first card number and the last card number."

The group approach also can work in reverse, when the associate needs to stop the transactions. "Once a consumer presents a group of cards, there may be a change of heart in the purchase decision. At that point, the user can indicate the decision not to purchase the cards to the clerk and the clerk can void the transaction. When a void signal is transmitted, the activation process can either be aborted or, for a completed activation process, voided," the patent said. "A batch number can be used with the information sent from the point-of-sale device to initiate the activation of the cards. Thus, this same batch number can be used by the point-of-sale device to indicate the void of the purchase without having to enter every card number. The batch number serves as a reference number that voids the activation of the associated cards. Consequently, the computer system can utilize the batch number to initiate and void the activation of the cards by associating the batch number with the data and acts performed in the validation and activation processes."

What if the customer—either by mistake or with fraudulent intent—slips in some $500 gift cards in the middle of a stack of $10 gift cards? The patent said that's part of the plan.

"The validation system is capable of determining whether the cards that have been presented are all of the same type and amount. Similarly, some cards may have already been activated by prior aborted purchases or other means. Therefore, the card validation computer is capable of detecting whether an error would occur for an already activated card," the patent said. "Thus, the card validation computer system operates as a first check to determine whether the cards can all be activated."