The Brutal Truth About Laundry Payment – Part 2

How did coin become a dirty four-letter word in the squeaky clean business of laundry? Blame coin volume — not its use — for the backlash.

High vend prices and high capacity washers tethered to the low denomination quarter created a perfect storm for the value-added card system and set off the war against coins.

Rather than employing readily-available higher denomination coinage or surrogate round brass tokens, vended laundry manufacturers put the money behind plastic.

Valued-added cards went beyond plastic pay’s earliest iterations — machine-dispensed tickets and tokettes — by eliminating quarters. The coins may have gone away, but not the cash, as currency-to-card value transfer machines stacked bills just like changers.

For an investment of tens of thousands of dollars, an operator could replace coin acceptors and money boxes with card readers — all linked to an integrated platform and babysat by full-time staff.

The advent of centralizing collection, loading cash-to-card, counting down vends, and delivering rewards in an attended format ultimately made a bigger dent in the owner’s wallet than the industry’s revenue stream. Despite decades of advocates singing the praises of card-operated vended laundry, the platform appears to have peaked out at an approximate 10% market penetration.

While quarters continue to win, the victory isn’t being celebrated by operators caught shortchanged with high vend washers and small capacity money boxes. You’re not alone pulling that same machine vault multiple times per week.

It’s not fair to single out washers. Changers used to take ones and then fives. Now it’s tens and twenties. Funny thing, store owners happily accept bigger bills, but most still program their machines to spit out the same small quarters.

Proprietary cards did prove one thing: the money — and the narrative — of the vended laundry industry was firmly behind plastic to address the quarter collection dilemma.

Enter credit cards. Their impact on everyday life can’t be ignored. Transacting with a bank credit card or account-linked debit card is part of the payment landscape. And laundry owners understandably want in.

Retail establishments welcome plastic and invite customers to pay with whatever they have in their pocket. If they can’t and walk out the door, chances are they’re not returning. The same holds true for a laundry.

 

Walmart-sized checkout

But while a big box retailer can get by with a modest number of card reader devices at checkout, a neighborhood coin laundry can’t. Think about it: Fully integrating credit card acceptance in a neighborhood laundry requires more devices than a giant Walmart.

Networking credit card readers might seem like a good idea until you consider how often they’re called into action. The price tag to purchase, install, integrate, maintain and transact payment through devices at every piece of equipment takes on new relevance when the overwhelming majority of customers will bypass them and keep plunking in quarters.

Central pay kiosks, which also link washers and dryers, again beg the question of how much initial outlay and ongoing chunk of the laundry’s revenue stream an owner is willing to fork over to avoid some aspect of collection duties.

While app-based smartphone pay — especially those enabled by the customer’s own cellular data and Bluetooth connections — brings hard costs down, the platform is in its infancy and has its work cut out in vended laundry and other industries to even reach credit card’s modest acceptance levels.

Smartphone pay in the higher profile self-service gas station industry hit a lackluster adoption rate of 4.5% in a recent national survey conducted by GasBuddy. And even the much-celebrated Apple Pay — along with Walmart Pay — remain mired in single digits.

 

Collecting is key

Putting aside all the bells and whistles of non-coin payment systems, their true appeal to a laundry operator is reducing — or even eliminating — coin collecting.

Go ahead and bash collecting, but there’s no denying the important role it plays in professional vended laundry management. The routine brings you face-to-face with machines — the lifeblood of your store.

You can spot something wrong in the blink of an eye and address it right then and there or get it on the to-do list, ensuring smooth operations and even smoother cashflow.

Collections are vital, but they don’t have to be brutal. If you’re imagining life with fewer coins and a magic door to credit card acceptance, have a look at my next post where a combo car wash-coin laundry dynamic duo is living the dream.

Imonexology - Laurance Cohen

Laurance Cohen is part of the Imonex team and welcomes inquiries on innovative payment solutions for your business.
laurance@imonex.com
(954) 999-7785

READ MORE


The Brutal Truth About Laundry Payment

It should come as no surprise that the mere mention of wash and dry payment stirs up laundry operators. After all, their livelihood is at stake.

The Great Laundry Payment Debate pits cash against cashless. Most owners stand on the sidelines, preferring to keep their quarter-only format in place awaiting arrival of the perfect system.

Something everyone agrees on is that self-service laundry ownership offers an attractive lifestyle. No receivables to worry about and no requirement to be onsite. You supply machinery and customers supply the labor. Give them a clean facility with working equipment and they’ll beat a path to your door.

The resulting cashflow — or, more specifically, coin flow — is where the debate takes shape. To a very vocal minority, coin circulating through a coin laundry is its Achilles heel, an old school format that needs to go if operators want to attract trade in an evolving cashless society.

They have long championed breaking the shackles of quarter-only dependence with kiosks and hybrids built around sophisticated networks of value-added loyalty cards, credit cards and smartphones. Bid coins farewell, they advise, and retool for a world of digital pay.

Despite the propaganda, rumors of cash’s demise have been greatly exaggerated. It’s worth noting that the Federal Reserve’s recently published Diary of Consumer Payment Choice report again ranked cash as the most-used payment option, topping debit cards and credit cards.

 

And the survey says

The Coin Laundry Association, which extolls the virtues of any payment system that doesn’t embrace its namesake coin, downplays the trade group’s own national industry survey findings revealing 86% of washers and dryers accept quarters, and that six in ten are quarter-only.

When it comes to laundry, cash is king and new payment methods have failed to unseat it from the throne. Therein lies the brutal truth about laundry payment: Coin always wins.  

The beauty of a coin-operated transaction is that it’s frictionless. Customers carry in coins or get change. It’s easy, intuitive and fast.

Interacting with coin acceptors and bill changers is synonymous with self-service laundry. There’s no special training involved and no language barrier. Simply put, patrons just get it.

I grew up in coin-ops and appreciate the industry’s cyclical pattern when it comes to single coin and multi-coin payment. Sometimes there were coins to sort, other times not. 

Back in the 1960s when I held my dad’s collection bucket, it was dimes only with 20-cent washes and ten-cent dries. 

Later on, it was a mix of dimes, nickels and quarters at top loaders and dime dryers. Less than two decades later, we reverted back to a single coin — the quarter — on every machine.

So how did coin become a dirty four-letter word in this squeaky clean business? Read Part 2 here to see what’s to blame for the backlash.

Imonexology - Laurance Cohen

Laurance Cohen is part of the Imonex team and welcomes inquiries on innovative payment solutions for your business.
laurance@imonex.com
(954) 999-7785

READ MORE


Welcome to Imonexology

Imonexology is all about the coin and token operated business world.

Here, we relish in the simplicity of the self-service transaction where it’s not man against machine, but rather man and machine.

Customers want fast and easy. Operators want smooth and reliable. Whether it’s washing clothes, vacuuming a car or any of life’s other routine transactions, coins and tokens are the happy medium of exchange getting the job done.

Imonexology hands you a mixed bag of thoughtful conversation and quirky tidbits. Catch up with savvy entrepreneurs who put coins and tokens to work, as well as happening trends that can be felt in your money box.

I have a passion for self-service pay. Growing up in laundry I learned four quarters made a buck — and tokens made even more. Today, I’m aligned with a company where they put their hearts into ensuring coin flow builds your cashflow.

Enjoy the blog posts and feel free to reach out with your comments.

Imonexology - Laurance Cohen

Laurance Cohen is part of the Imonex team and welcomes inquiries on innovative payment solutions for your business.
laurance@imonex.com
(954) 999-7785

READ MORE