Car Wash Firm Brings Cashless Concept to Laundries (Part 2 of 2)

Paul Partyka |

When one is making the decision to go cashless, plenty of arguments abound. Is it really about cost vs. convenience? Does safety trump education concerns? Ryan Carlson, WashCard Systems director of marketing, defines some underrated and overrated factors in this discussion.“The impact on consumer spending when paying with a card is underrated.” Based on extensive research, he says if you can get customers to pay with a check card, bank card, credit card, and give them access to those payment methods on location, there is a significantly higher dollar per ticket, increased bonus value purchased, and people are less prone to rationing.Consumers who first need to go to a bank or ATM are subject to rationing and spend less.“A customer coming to a business with cash in hand is subject to what is known as rationing,” Carlson says. “Rationing is an exercise in basic math done by the customer. It sounds like one of those standardized test questions:“‘If Jane comes to the Laundromat with $20 in her pocket, and needs at least $2.59 for a hamburger, $1.29 for a soft drink, and $3 for detergent, how much money does Jane have left to wash and dry her clothes?’“Customers like to get their change, dump the quarters out on the folding table, and count out neat, little stacks. Each corresponding stack is the allocated money for each wash and dry for each load of laundry.”These customers ration their money on cheaper wash cycles, purchase less “bonus time” dry, etc., compared to the customers who can access the funds of their bank account directly on-site, he adds.“This is accomplished by offering ATMs, credit card readers on each machine, or a card value station that accepts credit cards.”“Float balance” is an overrated factor, he says. Or more specifically, the hope that customers will leave large float balances on their cards. Float value is the amount of money left over on a prepaid card that will either be redeemed on a follow-up visit, or the card is lost or misplaced — leaving the float value in the owner’s pocket.“Research in other industries supports the use of prepaid cards as a highly profitable means of payment due to large float values left on a card. Watching the trends in the self-service laundry industry have been somewhat different. Customers who are forced into buying prepaid cards or tokens will only buy what they need. These customers will buy their initial few loads worth of value, and those that are paying with cash will feed ones and fives into the machine and plan out each purchase so they do not need to leave any money on the card.”Carlson warns owners not to build their business around the idea that they can make money off of float values and lost cards.“There are successful cashless operations that make a good case for the benefits of maintaining a nice float ... these are also the same businesses that work incredibly hard to build a relationship with their local customer base and instill the trust that is needed.”CASHLESS GROWTH?Some of you may be wondering if it was worth all the time and research to get into an industry that hasn’t fully embraced the cashless concept. Carlson says it was worth the effort, and he had to ask a lot of tough questions in order to find the key answers. Here are his conclusions:

  • Cost is a concern. The systems are expensive. It’s difficult to justify the cost when there is no solid case study data that shows that cashless operations increase the business or appeal to consumers. Card systems that can prove they attract new customers rather than turn customers away will justify the cost.
  • All or none. Since this has traditionally been an “all or none” (cards on all machines or none of the machines) decision, it’s a big decision for someone new to make before he/she has even made a single dollar. People need to decide their fate before they even order their equipment. It is an expensive proposition to start with one form of payment and then switch later on; it’s not cost-effective.
  • Token-only operations lack appeal. The reason to go to a token-based system is to manipulate pricing, increase security, and reduce theft. Data shows that consumers don’t want tokens (survey 1,000 people and given the choice, 1,000 people will choose to pay with quarters because they can use what they don’t spend for nonlaundry purchases). Tokens are a longtime way to reward customers with extra value when they prepay, but unless there is storewide adoption, this can hardly be considered a cashless operation.
  • There is comfort in cash. People understand cash, and how a cash business works. When confronted with the decision of coin- or card-acceptance, cash just happens to be the default option. Human beings don’t like making changes, so an owner of multiple locations who likely got into the business long ago (before cashless options) will likely be hesitant to change. Laundromat owners who are cash-only will likely always accept cash at their locations out of familiarity.

GOING WITH THE TREND“We live in a society that has been trending towards going cashless over the past decade. The average amount of cash carried by a 16-34-year-old is $2.25, which hardly is enough to wash a load of laundry. More and more people buy all of their services with their bank card or credit card.”The 40-plus demographic now even shows considerable card use for essential purchases such as groceries, gas, and dining out, he adds. “In the past three years, credit card use has doubled, and in 2008, electronic forms of payments in the United States exceeded payment by check. As consumers become more and more reliant on the ability to pay with their credit card and debit cards, business owners will begin to feel the pinch when they are the last business in town that won’t accept debit and credit cards for their services.”However, Carlson won’t predict the “death of cash” in the next decade because there are customers who, for a variety of reasons, will always need the option to pay with cash (economic status, religious beliefs, or other reasons).“When considering whether or not to go completely cashless, or to start accepting cashless forms of payment like debit or credit cards, ask yourself this, ‘What would McDonald’s and Wal-Mart do?’”If you have any questions about this article, contact Ryan Carlson at 651-204-9144 or You can also visit here for Part 1 of this story. 

About the author

Paul Partyka

American Coin-Op

Paul Partyka was editor of American Coin-Op from 1997 through May 2011.


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