CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.
American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:
ACO: What are the immediate benefits to the laundry owner who decides to go cashless? What are the long-term benefits?
Kevin Hietpas, director of sales and marketing, Dexter Laundry:
By going cashless, a storeowner is trading one set of operational challenges for another. One item that many owners have reported as a major immediate benefit is that their collection time in the store is significantly reduced. With only one unit to collect and no change to handle, owners free up time to devote to other management and operational duties.
At the time of opening the laundry, or transitioning to a cashless system, owners should plan on devoting time to educating attendants and customers on use of the system. Some customers might be resistant to (use) the new system, and making the transition as smooth as possible with friendly help and support will make sure that the laundry doesn’t experience a loss of customers.
Amy Gitlin, president, ESD:
Cashless to some might mean not accepting coins, only smart cards, in your Laundromat, while cashless to another would mean eliminating coin and bills from the Laundromat (and) using credit/debit cards as a means of conducting store transactions. Either way, a self-service laundry owner would reap a number of immediate benefits.
By removing coins or other currency, one eliminates the temptation for theft or vandalism—this also includes employee theft. Another benefit is the reduction or elimination of collecting coins and bills. In addition, the laundry’s customers would benefit from the convenience of not needing to find and carry heavy coins. Instead, they would simply carry their smart card or credit cards to complete their transactions.
By going cashless, your customers are apt to utilize more machines, especially your large machines with higher vend pricing. Your customers will continue to benefit using their bankcard (either credit or debit) by earning more loyalty rewards/benefits associated with their card of choice.
The long-term benefits are easier accounting practices for laundry owners and continued customer convenience.
Michael Schantz, president, Setomatic Systems:
We believe that going totally cashless is no longer in the best interest of the laundry owner. We have been developing these types of systems since 1995, and over the last few years it has become evident to us that a hybrid system is more advantageous to the storeowner than a totally cashless system.
The average Laundromat user does not want to purchase a card that can only be used in your store. Offering the Laundromat customer the convenience to pay with any method they choose is what drives more customers to the laundry.
Our credit card system allows customers to pay for their wash by using coin or their own credit or debit card. No unhappy customers walk out the door because they don’t want to buy a card.
It is true that the storeowner has the convenience of never collecting coins in a totally cashless system, but he or she should be looking to maximize revenue. To do this, you need to give your customers the added benefit of paying by credit card or coin.
The consumer has been conditioned to pay by credit/debit card for even small purchases like a cup of coffee today, so why should they not have that convenience in a Laundromat?
Steve Marcionetti, product manager, Card Concepts:
The obvious immediate benefit is the time savings and the safety of having central collection. What many people don’t think about is what you can do with the time that was once dedicated to pulling quarters from machine.
For many operators, collecting is the primary reason for visiting the store. With collection reduced to only a few minutes, this time can now be used to pay closer attention to the details that make their store attractive to their customers. This is a great opportunity to take some time to speak to the customers in the store and find out what they like or don’t like about it. Taking this extra time to focus on “marketing” the store rather than just collecting has both short- and long-term benefits.
The more obvious long-term benefits come from two important factors: penny incremental pricing and float.
Having the ability to properly price your equipment and maintain a fair profit margin regardless of the increases in utility costs will ensure consistency. Too many coin operators resist increasing vend prices because they lack the flexibility of penny incremental pricing and ultimately lose profit when their utility costs rise. Only when the costs have risen above what they can tolerate do they consider increasing vend prices, and often it’s too late.
Float is the unspent value that is residing on customers’ cards. For example, most customers will add $20 to their card but only spend $16, taking the remainder home to use on their next visit. Two huge benefits here: First, the storeowner gets to hold that money in their account until the customer returns; second, this unused balance is a “loyalty” factor that will encourage customers to return to the store rather than visit a competing store.
As the owner of four Laundromats myself, I can personally attest to the validity of these two benefits. They have made all the difference in the success of my stores.
Ryan Carlson, director of marketing, WashCard Systems:
There are two reasons to go completely cashless; neither of them benefits the consumer. We have to be clear about why an operator wants to go cashless. The first is security. We’ve got clients who want to eliminate all cash collections from machines because they can’t carry a big enough gun at their store to feel safe. They want to centralize all the money collections into a locked, secure, separate room.
The second one is for an off-site operator, someone who is a “serial” entrepreneur who owns lots of different businesses and the Laundromat is where they’re planning on not spending any time. They hire employees as attendants, and all the attendant does is clean (the store) and educate people on how to use the card technology. You cannot have an unattended store and be 100% cashless; it does not work, period. You use the cashless system for accountability, to eliminate any opportunity for employees to handle money.
Tomorrow: What are some basic questions a laundry owner should ask when considering a cashless store?
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