card system questions

[pete f]

I am trying to buy a mat I once looked at a few years ago, it was burned out then and so far I do not see any improvments since I last saw it, but it is still busy and I like the location, plus I can buy the building this time around. I will redo the store, and likely put in a card system.
I know, mag or chip are big issues, but what about the soap, soda, snack venders? I assume the soda and snack machine are easy to put a reader on, what about the soap vender? Most i see are coin slide mechanical style.
I will probably only go with a system that takes cash as well as debit/credit cards, that may leave me with less choices. As far as I have seen only chip card systems seem to have this available. I do not think the cost of the card would be that big of an issue, I assume I would have about 200-300 customers, if that many, and once they have a card that is it, so if a chip card is $4 than it would be around a grand to set the customers up.

I assume mag style stores the washers and dryers are linked together somehow, and on chip cards they are not.

Any pro/cons on the systems you now have?

Thanks

[Anonymous]

One of the benefits of a card system is all the data you can collect to truly understand your business and customers. With Chip cards that do not link all the machines this becomes a royal pain in the readend since you have to physically go to each machine with a reader and download the data manually. There are some new chip systems that also link the machines.

You will go through much more than 200-300 cards. Odds are you will go through 5 times what you think. I have a very stable customer base and go through about 5,000 a year, I know a guy that goes through 25,000 a year. At $4 a pop you are talking about a significant dollar volume. I don't care as I pay about 40 cents or less per card and have figured out that the average card that is older than 6 months old and will most likely never be used again carries a balance of about $1.50 /ea.

Why not just install an ATM machine if you are concerned about taking credit cards. I would not want to link my card system to credit cards. You will end up paying some hefty transaction fees, and for those that may care you have a very detailed record for the tax man.

Beware some card systems only work in 5 cent increments, I think 1 cent increments are better.

I have kept my soap, payhone and soda on change - most of this equipment does not work very well on cards and you significantly limit what machines you can use. In theory it should be easy, but in practice they are not quite there yet. I think Mark can comment on this more as he has looked into this recently.

[Fred50]

I strongly second Kirby's comments on card usage (no practical experience -yet!). Everyone that I have spoken to about card usage is amazed (annoyed?) by the # of cards that are used vs. the number of regular customers.

It's not only affected by the # of customers moving in/out of the area, but just plain laziness. If someone forgets their card, they'll just load up another one. Maybe they'll use the old one or not. As Kirby mentioned, as long as there is money on it, especially unused, then it shouldn't matter much to you. It will matter if you spend $4 per card.

As far as vending, you can buy snack, soda, and soap machines (e.g., Vend-Rite 360) that are MDB (multi-drop bus) compatible. They will work with most card systems.

CCI (Card Concepts) is the only major system that I know of that is not compatible with vending yet. They have a plan for 2003. I have chosen CCI, and I see this as the only downside.

What happens if your soda / snack vending is on card and a non-customer wants to buy a soda? I personally am going to have to give change for the games anyway.

Note that most new soda / snack vending machines come with bill acceptors, so this should not be much of an issue. The machine gives change automatically. If you're unattended, then refunds may be your only issue.

Note that any card system can also be used for door access control using electronic locks. I know of an operator that runs 24 hours, but is unattended from 11PM to 7AM. He uses cards to allow access. People obviously have to register for this service in advance.

PeteF,

Let me know if you have any other questions about card systems as I've spent way too much time on this lately!

[Rondo]

Pete I just installed a new Vendrite 12 column soap machine this week and it is suppose to be card ready. It's a very nice machine that has built in accounting. It's also very very heavy, it took three of us to install on the wall. The card system is getting more and more inticing to me expecialy the option of opperating 24 hours and letting customers late night entry.

[Fred50]

Rondo,

Let know how the 360 works out as I have one on order - sorta!

They sell two versions - one that is card ready with a cut-out for your specific card reader and one with a Coinco changer. The version with the changer can supposedly be easily set for a card system in the future - I hope. I won't be too upset if we have to give change for soap and game vending only.

[Rondo]

Mark, I've got a feeling that our soap and soda will be $1.00 soon so will the 360 come with a bill validater? If it would maybe order one with it. I bought my 360 at the last minute with the free soap & bag special with P&G. The best thing is they run out of the special P&G painted fronts(ugly) so I got one of the plain painted fronts(nice) and they sent it with the Lever product(Wisk, All, Surf,Snuggles and the bags) and my supplier said I would get the free P&G product too. This gets the price down to a little over $100, lucky I guess. I plan to buy another one in the spring for the other store.

Mark, your the one building a new store aren't you? Do you plan to buy your own games or use a vendor? How are things progressing?

[Fred50]

Sorry Rondo, no bill validator. I guess that you can always add one in.

Yes, I'm building a new mat. I'm going to start with a games vendor and a 50-50 split. If it does well, I may buy my own in the future.
The only issue then becomes repair. I think that I can fix anything, but the question is, do I really want to? :-)

I'm going to get classic games that shouldn't appeal to teens, so I think style and keeping up-to-date won't matter much.

As far as the progress, I'll be opening very shortly. I'm trying to squeeze it in before the contractors go on the holiday snooze!!

[pete f]

Kirby.. you have a coin changer then? I know the new guy who opened across from me has a card system, and also a coin changer. I did not walk/snoop around much so not sure why, I assume for soda and stuff. I would think the coin mongers would have a field day, and you would be lugging qtrs to the changer all the time. Sort of defeats the coinless idea. I would stick to strickly card for eveything, soap, soda, games, condom machine, etc, I have thought I could buy a small snack machine and fill it with soap, softner, bleach etc products. Given all the choices now I may need a 25 unit vender! Also partly for security as it will be a 24hr store in an area that appears rough, but may not really be. Probably will do some sort of door opening thing after midnight, and put the many lights on motion. From what I have seen you sell a preloaded card, then hope they reload it. How much is your preloaded card?
The visa/debit card appeals for the lack of money handleing and the wider use of the mat to customers. I would probably have a $10 min, so they charge me 50 cents, I think the net over all would be positve. I know many have thier checks direct deposit and have a debit card they use.

[Anonymous]

Don't have a coin changer. I am fully attended, so the attendant will make change for anyone that needs it. Also, do not sell a preloaded card, cards are issued by the machine when people insert money if they don't already have a card.

You may have a problem with minimum purchases, for instance if you accept AmEx you are in violation of your merchant agreement if you do. Use of credit/debit cards will also limit your choice of card systems. I think you are much better off to just have an ATM machine - that way you have no transaction costs and actually make money when they use their credit or debit cards.

[pete f]

Kirby, most of the systems I have researched and seen sell a preloaded card. I have not looked to much recently, but I thought that was the norm. Your system will give the first card for any amount the customer puts in? As far as credit cards go, I do not think AmEx will be on my list, maybe I will be featured in a Visa commerical... I do not want an ATM machine becuase I have a phobia of it getting ripped off the wall and taken away. I am back to handling less cash as a benefit of this modern upgrade. I assume the day is near when we just use our debit/cc cards for almost every purchase in day to day life, which is about what i do now. KMart has self check out, Home depot is trying it, debit/cc is the money of the future and is here now just not so accesible to our industry,, yet.

[Fred50]

Pete,

In my area, I'm expecting a lot of folks that are either paid in cash or do not have credit or a checking account. I will luckily have a bank two doors down if they want to get cash.

Like Kirby, I expect that my attendants will give change for the soap vendor and games.

The card systems that I have researched all work the same way. The customer inserts a bill into the bill acceptor and that amount is added to their account (card). Whenever their balance runs low, they must add more $$ to the card in the same manner. It doesn't work like a pre-paid phone card.

I think that if you allow people to use a debit/credit they will. However, considering the base costs of processing these transcations for a mat, it is a loser in my opinion. Customers may use it for the convenience even if they have cash on hand and you have just given up a chunk of your margin.

I'm all for customer service, but at a reasonable cost. Let the big guys take the debit and credit cards and leave the cash to us!! ;-)

[pete f]

I hope I get to the clean'03 before I get this mat and redo it..
Even if the deal comes together I will propbaly run it as the dump it has been until I get thru the Vegas show..

So prepaid loaded cards is not the norm?

I like being different, so talking me out of letting customers use debit/cc cards is compleletey useless..I personally think you guys have all the wrong answers as to why not to use them.. blaze a trail!

[Anonymous]

Sorry Pete, I'm with Mark on this. Most of my customers don't have credit cards. My WDF customers do, but they either pay in cash or by check - none of them have an issue with that. I've never (knock on wood here) had a bad check!

If you are in a stand alone building with nothing else anywhere near you then credit cards might(?) have some value. But around me every third store seems to have an ATM or be a bank, so why should I incur extra costs? Its not going to make them wash more clothing, like impulse buys in a normal retail store - it just is not needed.

[Fred50]

Pete,

Isn't having a card store cutting edge enough? Just look at the stats from the CLA. Very few mats have cards.

I thought of another twist on the full out card store that I don't think that we ever mentioned. This only works if you are full y attended. A smaller desktop card reader/dispenser can be used by some systems in place of the full card value station. The costs would be considerably less, but the attendant would have to be involved in most customer transactions. Just a random thought!

[Beverly]

Mark--

I too have felt that a card system demands an attendant at all times; however, at the S.F. CLA conference, a couple from NJ own a strip center with an all-night 'mat, unattended, with a card system. They said they have had no problems! It wouldn't work for me but then I'm in the land of the loonies--Los Angeles!

[moopar]

I opened a mat 2 weeks ago today. I have Speed Queen equip. with the CardMate system. The reason I got into the laundry biz was ability to MANAGE my business through the card system. Yes cards are expensive, but I feel the reporting data, off dollar pricing ,promotions. senior discounts are awesome. I sell the card for $1.00. So far nobody has walked. I chose my staff carefully, communication skills were a top priority. The staff are the ones that will have to ultimately explain the card to the customers. For those custumers that freak out over "having to buy" the card, I offer the option to refund the balance and the $1.00 cost. I have had to refund $4.60 so far. Big Deal. I could go on and on but then you would think I'm a shill for Speed Queen. And yes the the store is attended full time, I'm not going to let that large amount of MY MONEY sit out there unattended.

[Duane]

A little FYI on card systems.

CCI card costs about 1/5 of a smart card and that includes printing.

The CCI system is networked with all machines connected to two X-changers (one master and one backup - works great). At any given time I can see the totals for day, week, month, ytd along with how many starts each machine has had on a day, week, month, ytd basis. This will be helpful when I rotate my front HE machines with the less used machines in the back of the store.

Everything in my store in on the card. No coin what so ever and no coin changers...... No money anywhere except the two X-changers that are mounted flush with the wall and accessed from behind.

This includes:
Washers
Dryers
Soda machine
Snack machine
Soap machine (vendrite 360 - coin changer model)
Pool table
Air hockey table
Bathroom door (free - customers only and can lock down at night)
TV channel changer (my invention)
and probably a couple of Megatouch table top games in the short future.

The store is unattended 24/7 and I have and no problems.

The x-changers take in $1 - $100 bills and give a printout of when colleting the cash of your deposit amount.

You can charge a deposit for the card if you want to (I don't yet).

You can track your customers and give them discounts and bonus money if you want.

I am very very happy with CCI.

Thanks,

Duane.

P.S. Sorry, I am new to this site and I am going through all the older threads and reading some great stuff. I just needed to reply to this tread....

[anonymous]

Duane,

Can you give us estimates on how much did card system cost you.

Thanks

[Anonymous]

Does it make sense to have vending machines accept cash even if u have a card system (obviously, the soap machine should run on the card, if possible)? Otherwise, u turn away walk-in vending buyers.

[Duane]

It was in the low 30's for my installation. But most of the costs are in the x-changers. The more machines you have it just goes up a couple of hundred for each card reader. This includes all the CAT 5 cables, card readers, mounting hardware, 5,000 mag stripe cards printed with your information (figure out what 5,000 smart cards will cost to buy!!!), printer, modems, installation of card readers. You (or your GC) will need to install the x-changers since they are mounted into the walls.

In a little over one day CCI can do the install and walk you through the system. Very easy, anyone can pick it up in about 15 minutes.

Also, CCI uses Dell computers inside the x-changers with one as a master and the other as a backup. I had the disk on the master start to go bad and the system failed over to the backup system (failing over is a good thing) and I didn't even know it happened. CCI reconfigured a new system and overnighted it to me. I just swapped systems - 10 minutes, and CCI dialed in and checked everything out. Piece of pie.


ARNIECON - I thought about the walk-in vending buyers for a while and came up with this small list.

Less chance of vandalism when breaking into the vending unit.

No need for any cash or change machines hanging on the wall waiting for breakins.

The sales went up so much after installing the card reader that I believe it offset any sales lost to walk-in buyers.

Ability to see via dial up how many times the machines has been vended.

The cost to put a card reader on a vending unit is about the same as a bill and coin acceptor. Cost is not a factor in a new install.

Duane.

[Fred50]

To add to Duane's comments:

I am concerned that someone may walk-in to buy something from the vending machine to "case the joint" - call me paranoid, but I'm in an urban area. In addition, it would be unusual for someone to walk into my particular location to do that. There are other alternatives. If someone wants soda or candy badly enough they can put money on a card.

Note that it looks like my vending machines may end up costing less by going with the card reader (that is - the cost of the reader is less than the cost of the bill acceptor and coin mechanisms for the vending machines).

[bobbyscott]

Do any of you use the ESD card system? This is the one that my equipment dealer distributes.

From reading Duanes comments and looking at CCI's site it looks a lot nicer and easier to operate.

Any experiance with the ESD stuff?

[anonymous]

I believe ESD uses smartcards as opposed to magstrips. They are very expensive compared to magstrip. If you have to buy 5000 blank smartcards at $3.00 a piece It is $15,000, Way too expensive.

[Fred50]

Seconding Buddy's comments:

Don't forget that cards aren't a one-time purchase either!

[Mungo Spike]

I use ESD
smart cards, and as someone else noted, they cost about $3.00 - they used to cost $5.25!

I charge a $3 deposit for the card - most people keep them and use them week after week, but quite a few people turn in the card when they're finished to get back their deposit and whatever balance remains. I "zero out" the returned cards and put them back in the dispensing machine to resell. Some laundromats charge $3.00 or more for the card and the card is not returnable - I wouldn't have many customers if I did that in my area (Wash DC).

There's no question that cards are much easier than coins (at least in my mind), but there are some drawbacks to the ESD cards (the only brand I have personal knowledge of):
1) The cards break or the embedded computer chips become scratched and unusable at a fairly high rate.
2) The colors on the cards fade and run after a while so that they're not presentable enough to put back into the dispensing machine to resell. I end up giving away those cards (no deposit) to customers who don't like parting with a deposit at all.
3) Replacement costs are a real problem. I reorder about 500 cards every four months or so.
4) ESD's software is pretty clunky. There is nothing automatic about gathering the information from the machines for analysis. Gathering info requires inserting a card into every machine (I have 71) and transferring the data to the computer. The process is time-consuming and has to be done with some regularity to have any value - but even then the reports produced by ESD's software are pretty primitive. I went through the whole procedure twice and never bothered again.

If I do another laundromat, I'll give CCI a hard look. The costs - especially the recurring costs - are less than ESD's and CCI's analysis and management capabilities seem to be much better.

Mungo

[Anonymous]

Mungo,
Doesn't giving the money back sort of defeat the whole idea of "float"?
Easy Card also uses an inexpensive mag stripe card, and they've been around the longest.
The other comforting thing about Easy Card is that they are owned and operated by Dexter so you don't have to worry about them being out of business five years from now.(ie: Freedom Systems).

[Anonymous]

I have had an Easycard system for about three years. When I first put it in Dexter suggested I charge a 50 cent deposit. I did that for 30 hours and quickly eliminated it as people got very upset. A mat near me just put a smartcard system in and are charging a $3.00 deposit. I'm glad they did, as I am getting lots of new business - long time customers of their's that are pissed about having to pay a deposit. I put a small sign in my window that says "as always, laundry cards are FREE" to add insult to injury.