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Seeing Both Sides of the Coin

WANTAGH, N.Y. — Time may or may not heal all wounds as some suggest, but time can certainly impact one’s perspective. About eight years ago, Marc Weiboldt’s son suggested converting one of his coin stores to a cashless operation. Weiboldt’s reply: “Are you crazy?”Since that moment, Weiboldt has learned plenty about the pros and cons of running a cashless store. Today, he operates 23 stores in New York, some coin, some cashless.THE EARLY DAYSA 40-year industry veteran, Weiboldt started in the business with his uncle. Weiboldt’s stores, all sizes and shapes, new and old, cover about 100 miles, yet he visits each store at least twice a week, starting out daily at 3 a.m. and finishing up at 6 p.m.As he learned the business, the security aspect was troublesome. “In a tough area, you have to unload [coins from] machines. It was scary. Some of the stores are not in good locations.”What finally got Weiboldt to go cashless at one of his stores? In addition to security and vandalism concerns, Weiboldt was losing about $4,000 a week to commuters using his changers for their fares.When he decided to go cashless, he admits to being nervous about everything. If you are expecting a totally happy ending to this tale, you’re mistaken.LEARNING TO LOVE ITWhen he went from coin to cashless, he lost a good chunk of volume, he says. He was also concerned that people wouldn’t grasp the concept. Having an attendant became a necessity. “People don’t like change.” Overall, he converted three coin stores to cashless stores, and each time he experienced similar problems. However, a certain amount of customer turnover exists year to year and this can help counter the customers who turn away from his cashless stores, he adds.As time went on, he started to appreciate the cashless world. He especially appreciated improved security conditions (not having to carry large bags of quarters out of the store, or people damaging the machines trying to get money out of them) and the marketing aspects of a cashless system.Weiboldt loves the flexibility a cashless system provides in terms of specials, promotions and pricing. He runs an ongoing “Midnight Madness” promotion in which prices are dropped 50 percent from midnight until 7 a.m.He also builds customer loyalty by routinely loading $11 worth of credit for every $10 purchased. This immediate return of 10 percent on the customer investment has been extremely popular, he says. Weiboldt uses a variety of methods, including signage at the stores, to promote the various programs.When it comes to pricing, he is an advocate of the “nines.” “With the cashless system, I can easily go $1.29 [on a machine], instead of $1.25. Going $1.99 instead of $2 can [have a positive effect]. Pricing is somewhat of a mental thing.”THE OTHER SIDE OF THE COINTo totally appreciate a cashless system, one either needs to be experienced in the business, or be an extremely tech-savvy owner, he believes. If someone had tried to sell him a cashless system when he first got into the business, he would have thought the person was “nuts,” he admits.When you bring in a cashless system, you add a large expense. “This is a big adjustment for some. I remember when I started out. There were no attendants at first. You had a 1,000-square-foot store with only someone coming in to clean at night. You could still make money with such a small store. Today, you have high overhead. In New York, rent is sky high.”There’s also the ongoing expense of purchasing cards. “I charge a deposit ($1), but the cards go out the window at times.”Even though he converted three coin stores into cashless stores, he doesn’t totally recommend it. (“Three times I did it, what a knucklehead,” he jokes.) If you go cashless, it’s more of an advantage with a large store (minimum of 30 washers), he adds.“Cost is always going to be a factor with a cashless system. It’s hard to justify spending $75,000 or $100,000 unless you really need it.“There’s also customer education to worry about. When I converted my first store, customers beat me up! They didn’t want to pay a deposit for the card. I gave some cards away. You must have an attendant at these stores for education. It’s an ongoing learning process, even if you have a user-friendly system. Some people will always be confused.” To offset the cost of an attendant, he has added drop-off service.Bilingual audio instructions from a cashless system can help, but some have a problem with instructions written in Spanish, he says.It also helps if your customers understand marketing. “If your clientele is marketing-savvy, the cashless system will be an A+ for you. If the customers aren’t sharp, they won’t appreciate the marketing aspects of the system. They may even be skeptical of what you’re offering. Some people don’t understand why they have to pay a $1 card deposit. Yet, if they spend $10 with me, they get $11 credit. That pays for the deposit. But some believe the marketing specials are just ripping them off!”Even though several of his stores utilize cards, he doesn’t use the same type of card for all the stores. “It’s too hard to monitor your sales doing this. But I have different-colored cards for the different stores for clarity.”If you have explored cashless options, you are probably familiar with the “float” (the unused balance on cards).  Float is a selling point for some, he says. “With a megastore, the float may be $5,000 at the beginning. However, customers get smarter. They watch their cards more closely, they work off the balance. The float will drop to several hundred dollars at any point. Who wants to have money doing nothing in today’s economy?”MOVING FORWARDWeiboldt tried something different when he went cashless. He’s at it again. At his first cashless store, he now offers credit-card acceptance. “I figured [credit-card acceptance] is another selling point.” It’s too early to gauge the results of this experiment, although he says sales are up about 5 percent without advertising, and are improving.He’s not surprised that cashless systems, burdened with high costs, haven’t made more of an inroad in the industry.He advises owners to be either a coin store or a cashless store. “I know there are coin/cashless stores, but I think that would be a nightmare! In my view, the cash side would overwhelm the cards! Go all card or don’t do any card. Who wants to have cards, deal with changers, and still unload coins? It’s too much time and too much investment.”Even though his credit-card experiment is fairly new, he’s optimistic about this “hybrid” setup. “Credit-card usage will work. People understand them. There’s no education, no deposit. It will grow, especially when marketed.”With cashless systems, the future is wide open. There are now more “bells and whistles” with the systems, he says. Plus, the culture itself may be more conducive to making the cashless leap.“Years ago, who would have thought that most people would have a PC at home? Cashless systems may grow. My 3-year-old granddaughter blows me away on a computer. Kids will be comfortable with new technology. Some people use a calculator just to add 2 + 2! Education won’t be a problem in the future.“It would really help if the cost of cashless systems comes down in the future. But even if it drops, some owners will still be skeptical about the cost. For example, if the cost of a system drops to $50,000, some owners would rather spend the extra money on machines, etc. Money is still money, and people will want to keep their expenses down, unless they have experience and really understand what a cashless system can do.”In the meantime, Weiboldt is still looking at adding laundries. “The most important thing is that it’s a good store generating revenue. That I will always take!"                                 

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