Identifying and dispensing special offers based on current and/or past transactions

A method for providing a loyalty and rewards system that implements a user incentive program using circuit chip technology, the method comprising:

• storing transactional information associated with the user;
• identifying a special offer for a user based on activity by the user including at least the transactional information;
• automatically dispensing the special offer to the user by downloading the special offer to a circuit chip associated with the user;
• a POS terminal processing items for purchase selected by the user;
• enabling an operator of the POS terminal to actively signal the POS terminal that the step of processing items for purchase has been completed by pressing a key on the POS terminal;
• and
• after actively signaling the POS terminal, the POS terminal activating local loyalty software to complete the transaction, the local loyalty software designating the special offer for automatic application during the user's next transaction, wherein the step of identifying the special offer is practiced at a time other than at a time of the transaction,
• the automatically dispensing step further comprising the POS terminal accessing the circuit chip, and the local loyalty software automatically applying the special offer at the user's next transaction,
• once activated, the local loyalty software:
• actuating a card acceptance device to detect the user's circuit chip,
• requesting the card acceptance device to retrieve electronic coupons and other loyalty program information from the user's circuit chip including the special offer downloaded to the circuit chip,
• obtaining product information of the items for purchase from the POS terminal,
• comparing the items for purchase to items associated with the electronic coupons and other loyalty program information retrieved by the card acceptance device from the user's circuit chip including the special offer downloaded to the circuit chip, and
• when applicable based on the comparing step, automatically applying the special offer,
• the method further comprising:
• assigning special group serial numbers to a plurality of circuit chips associated with a plurality of users within a user cluster, wherein the identifying step is practiced by identifying the special offer based on shared interest characteristics of the user cluster, and
• presenting the special offer to the plurality of circuit chips in the user cluster.