Card vs Card

[Gatorlenny]

So, one of the most popular threads here compares the good old coin store vs the card store. I do not want to go there. I want to go beyond there! This is not a debate on card vs coin. It is what I think the future will be. I don't work for a card vendor, don't own a card store, or have any other interest. I am an owner of several stores and this is just my opinion of where the future is.

Society as a whole is slowly becoming cashless. The average worker in our laundries comes in with cash and does wash. If they come in with only $10, they will only be able to spend $10. It is our job, our mission, to help that customer spend more. We do that several ways. We vend soap, drinks, snacks, pay phones, pac man, whatever; but we are all seking that extra quarter. The basic idea of a card store is a customer comes in puts $20 on a card and spends $10. We are told by the card vendors this extra leftover money is our float and we are told how much money we will make in float, lost cards, customers that lose those cards, and so on. What I am actually seeing and after many discussions with card store owners, is there is no float. Customers come in and buy what they can and use it right away. They don't have that extra money to buy more than they need. If they did, they probably would not be coming to a laundry mat with anything smaller than a comforter. They would be doing laundry at home in thier own machines....So I gotta ask: for those of you that have spent many thousands of dollars buying and implementing these card systems, how does it possibly pay for itself? If you spend 30K to buy that system, how many turns do you have to have to pay for it? I mean dead cost, not profit on top of that. Lets say you have a 60 pound machine. You vend it for $6. That machine would have to run 5000 times! And if you have to repair the washer or the card machine, how many more times does it have to turn? Ok, so now you have the washer run that 5000 times, and now, just now, you broke even for the cost of the machine. Never mind water and electric, but hey you gotta figure those costs too. Oh and the card itself. Whew! How many more times does it have to run before you turn a profit? If you just kept your store using the good old quarter, you would be far ahead with the same store. NOW, here is where I am finally going with this.

At some point we will not be able to realistically have a customer stand in front of that same 60 pound washer and feed in $10 or 40 quarters in. It will be slow tedious and just a pain in the ass for customers and for us. How many changers do you have? What is the capacity? Have you looked at the price of changers lately? A good size one can easily run 3K and more. That times 2 or more changers to keep 40 quarters to start one washer, coin boxes that need to be emptied every other day to limit your exposure to break in's, maintenance on changers, coin drops, and so on. So what am I saying? Cards baby! BUT not just any cards.

Vendors hawking thier proprietary systems can not compete with good old Mastercard, Visa, AMX and debit cards. In other words Card vs Card. I would be willing to bet more of our customers carry some kind of card on them. ATM, or credit card, but something. My belief and thought process on this is that the future will be the store that has machines that can accept those kind of cards. We get the monies directly deposited into our accounts. NO collections, other than electronic going on around here. A card store that uses some kind of proprietary system will be left behind in the future, because people will not be able to use their credit card for that same wash. I have thought about this and would not want to invest in a store that can not accept a Visa at the machine. By forcing a customer to come into your store put cash or a credit card into a card vending machine in order to go put that card into another machine, is not exactly saving anybody time here. And is seems kinda redundant doesn't it? Time frame? I think sometime in the next 5 years we will have to be so high priced to keep up with the rent, electricity, water and gas, we will be forced to look at retro fitting our stores to accept that kind of technology. If you have a big investment in a card system, how much more will it cost to retro fit that? Can it be done? Has it been done? Remember Mobil with thier speed pass to buy gas? I can see that same type of system for a mat. Everyone will have an atm/debit/credit card attached to their key ring and swipe that or pass that in front of a scanner. And that is an easy to do laundry. And an easy way to collect.

Again, I don't work for any vendor. Just me. My thoughts. Yours?

[pete f]

I think you are right. Right now the only option is set o matic credit/debit card cost about 11k average store like we have. The problem is it is not online and you have to infared the swipes with a wand and then batch the deposit. I am waiting untill someone invents an online linked swipe system.

[William]

I have seen some Pepsi machines that have credit card acceptors around here. So someone is working on it.

The Set-O-Matic system is close to being right, but not quite there for the reasons mentioned by Pete.

Imagine a dual system, credit cards and coin. Imagine selling pre-paid VISA cards instead of proprietary cards. Or cash, customers choice.

But, remember, if someone comes out with the ideal cashless system, it will be the "killer app" that allows consolidation of the industry. Think it through - you would have 100+ stores IF you could figure out a way to handle the cash. There are few accounting controls in this business, that is why the Harvard MBA's are not in it. If they could figure out a way to automate the money, it is easy to manage low wage employees.

Of course, there is still that pesky problem of economy of scale on utilities...

[fishmanz]

I saw that ESD has new VTM"S out that accept credit cards and load the money on the propriatory card. To retrofit, I would have to first buy 2 new vtm's then rebuild my wall to accept a bigger machine. My guess is that we would not be able to trade up to the newer vtm. Perhaps the answer is to buy 1 new one and keep the others operating too. I take credit and debit cards now but I have to do it at the counter.

Oh, By the way, I floated over $10,000 last year.It seems like real money to me. You don't get to keep it all. Most times they come and use it but until then it is an interest free loan to me.

[pete f]

I saw that ESD has new VTM"S out that accept credit cards and load the money on the propriatory card. To retrofit, I would have to first buy 2 new vtm's then rebuild my wall to accept a bigger machine. My guess is that we would not be able to trade up to the newer vtm. Perhaps the answer is to buy 1 new one and keep the others operating too. I take credit and debit cards now but I have to do it at the counter.

Oh, By the way, I floated over $10,000 last year.It seems like real money to me. You don't get to keep it all. Most times they come and use it but until then it is an interest free loan to me.


Great float. Mine was way less, about 1 weeks revenue and largley sucked up in card cost and expense of maintaining the bill to bill.

[Suds King]

Just installed an American Changer Credit/ debit card to quarter machine(ac2007) it is in Dunedin Florida, i will keep you posted as to the use of this machine and what it brings to the coin laundry industry as a whole. So far the resonse has been overwhelming from the customers as far as convienience.
Suds King

Not washed up yet!

[mjwalsh]

Sudsking,

Is there any safeguards against people who are hooked on those frequent flyer miles & other credit card rebates from getting way more quarters than they need to use at your laundromat from your specific new credit card to quarters machine. In the meantime how high will those transaction & percentage fees at your expense start adding up. This possibly may never happen so I don't want you to be too concerned.

I still think that credit card to secure tokens combined within normal bill changer to dollar coins & quarters could be the way to go for many of us. It hinges on the manufacturers to some extent. If not, possibly a new company will see the need & make the opportunity work. Of course affordable & reliable retrofit 3 coin acceptors are a key component.

Tokens received from your credit card machine not used at your business would not potentially add up red ink in terms of credit card fees & percentages whereas not used quarters would have to be on the debit side of your ledger. The reason is the tokens are bought for less than their designated value whereas the quarters will always cost you face value.

[William]

Sudsking,
Tokens received from your credit card machine not used at your business would not potentially add up red ink in terms of credit card fees & percentages whereas not used quarters would have to be on the debit side of your ledger. The reason is the tokens are bought for less than their designated value whereas the quarters will always cost you face value.

I think you have that backwards. If they buy tokens on the credit card, and walk out with them in their pocket, you are better off than if they get quarters and walk out with them. Maybe I am just reading it wrong.

The issue is whether or not you will get incremental business by offering to accept credit cards. If you simply trade your existing customers to credit cards then you will be less profitable. The credit cards have to bring in new customers or else it is bad for the bottom line.

[mjwalsh]

William,

I hope other people on this board did not also misread what I wrote. When I said the credit card to quarters would be the ones on the debit side of the ledger that is exactly what I meant. It costs less to give out tokens long term wise than to give out quarters via credit card because of the float from tokens & the danger of them not spending the credit card quarters at the laundromat. If they don't spend all the tokens there is the float gain; with the quarters not spent.... you paid credit card costs for zero gain.

I am thinking dollar tokens so they might still feel a need for some quarters for the smaller increments. With the right multi(3)coin drop payment on each washer & dryer that would start even with an overpayment, a certain percentage of customers will care more about the convenience of no cash & allow us to keep the change. We have seen this with our pay phone that had 35 cent start, people would pop 2 quarters in & not worry about the extra 15 cents overpayment.

I agree with what you wrote about the new customers & I might add credit card acceptance could help keep from losing existing customers to the convenience of another approach for washing their clothes.

[pete f]

I talked with American changer about this set up, was going to put one in. It has abuse possibility. That can be circumvented by a setting to allow only 2 swipes per day of a given card, so Johnny can not rip grandma card and come down to empty your changer. I also found that their is a new fee structure for small transactions, so someone getting $5 worth of change will cost you about 22 cents total. I was going to put one in, but I still have to collect quarters, so does not really save much. I may still put one in for customer convince, especially at my each store with all the transit vacationers. Then again, most have not been to a laundromat in 20 years and pay what ever I charge. Pondering more..