Payment

How laundromats take credit and debit cards

 

Hold on to your wallets. A credit card-ready laundromat doesn’t have to break the bank.

All it takes is a way for customers to do laundry with their card. It’s that simple.

Store owners looking into credit card acceptance have a number of choices at various price points. Among the options are field-proven ways to introduce plastic with little or no investment. 

First, let’s set the record straight. Credit cards are old school. They’ve been around a long time. Swipe, dip, tap or wave — it’s still pay by plastic. 

Cards with new, enhanced security? You bet. And the same could be said for that other old school payment method, cash.

One thing’s for sure, father time has been very kind to credit cards.

Western Union launched “metal money” cards with free deferred payment privileges more than a hundred years ago. In the 1920s, oil companies and hotel chains rolled out their own consumer cards, followed a few decades later with the first universal card offering by Diners Club.

Credit cards are now a multi-trillion-dollar platform. Visa — the leader of the pack — rings up $2 trillion annually in U.S. payment volume and spends a whopping $100 million for marketing.

The Federal Reserve reports credit card transactions for non-bill payments surpass cash while trailing its other rival, the debit card.

While data on consumer credit/debit card use at the nation’s laundries isn’t available, a March Facebook poll by Laundromat Owners Showcase revealed nearly three-in-four operators reporting 30% or more of total machine sales taken in through card transactions. 

Four decades of plastic in laundry

 I witnessed firsthand how credit cards entered the self-service laundry space. Back in 1984, our flagship store sold rolls of tokens at the drop-off counter using a manual card imprinter.

Automation arrived to the industry, and by the mid-1990s proprietary card stations both accepted and dispensed plastic. Shortly thereafter, the action pivoted to the machines themselves with the introduction of individual card readers. 

Along the way, ATMs came online, serving as a convenient cash conduit for changers. And some of those change machines soon sported card devices to facilitate token sales.

Most recently, credit/debit cards loaded to smartphone apps and mobile wallets — with or without the aid of a kiosk — arrived on the scene.

This month’s Laundromat Owners Showcase poll provides a snapshot of what’s going on today. Over one-quarter of respondents offer a credit/debit card option via walk-up kiosks, washers & dryers and/or ATMs. The option for patrons to self-load mobile pay apps with credit/debit cards comes in at 13%, and offering card-to-token dispensers at 3.7%.  

Let’s take a closer look at these.

Credit card at the machine

A credit/debit card reader installed on washers and dryers has been the go-to model for several years. It’s also one of the most cost intensive. Think of it this way: An average 60-machine laundromat equipped with readers boasts more payment devices than a big box retailer. 

Many operators — and those who supply them — say the convenience of wallet-to-wash credit card acceptance outweighs the price to equip and maintain a reader fleet.

Some machine readers process credit and debit cards, while others perform double duty servicing loyalty cards and digital wallets. 

Operators have the option to install readers as an add-on to coin-operated machines or serve as the exclusive payment format. 

And while coin/reader hybrids are a common sight, the coin-op side usually remains quarter-only — sadly ignoring the benefits of higher denomination dollar coin acceptance. 

Credit Card at the kiosk

Stepping up to a kiosk with a credit card to facilitate a transaction has long been part of the laundromat scene. In a central pay format, patrons can use cards to activate selected machines at one spot rather than repeating the process in front of each washer or dryer.

Central pay has caught the attention of operators of late after falling off the radar with its earliest iterations. The advent of smartphone apps is fueling the renewed interest.

Machinery manufacturers and large chain operators have been focusing on the kiosk more and more to engage customers to load funds to apps or loyalty cards. They’re banking on plastic-to-phone and plastic-to-plastic at the kiosk as the way to pay. 

Some kiosk stores are debuting with less laundry machine hardware onboard, eliminating readers and, in some cases, even removing the vital payment redundancy provided by coin drops.

Credit card on the app

The marketing of laundry smartphone pay apps and mobile wallets has grown exponentially. Customers are invited to load funds by keying in credit/debit card credentials to their personal device. 

That streamlining translates into connectivity inside machines and oftentimes no kiosk. The departure from costly external hardware has motivated many who were previously on the fence about introducing credit cards.

But while the price point of mobile pay remains attractive to laundromat owners, adoption rates by their patrons isn’t so pretty. As noted in an earlier blog, six-in-ten store operators see less than 10% of machine revenue generated through apps.

Credit card at the ATM

Here’s a no-cost way to be credit card-ready. Invite an ATM route operator to place a unit at your laundromat. Arriving customers can get cash, then turn to your changer for wash and dry coins. You won’t come out of pocket to welcome cardholders. Instead, you’ll pocket a share of the transaction fee proceeds.

Owning an ATM outright remains a popular choice. One Minnesota operator summed it up nicely: The ATM is the most profitable machine in the store and doesn’t even take up floor space. Indeed, his wall-mounted, rear access unit complements the changer bank with a convenient credit card-to-cash vehicle.

An ATM remains the least expensive credit/debit card option for attended and unattended coin-ops.

Credit card at the token dispenser

Those same customers who show up with wash and no cash can go home clean with a credit card-to-token setup. 

In addition to inserting bills at the changer bank, patrons have the option to swipe or dip their credit/debit card, select a desired payout of tokens, and redeem them at washers and dryers equipped with token or coin/token acceptance drops.

Compared to employing an ATM, card-to-token is quicker and cheaper for the customer as it eliminates a step and the transaction fee. Owners carry the nominal processing cost.

Bonus token payouts are typically offered on card transactions of $10 or higher. Dispensing quarter-value tokens, dollar-value tokens or mixed denominations are among the available options.

Changer manufacturers produce credit/debit card-to-token models, as well as combo cash and card units. Some existing machines can also be retrofitted to accept cards. 

The token-op laundry format is both card-friendly and wallet-friendly. It’s one stop, one reader and one cost efficient way to accept credit and debit cards.

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Beating the quarter bandits

 

Changers are caught in the middle of a tug of war at the laundromat. It’s there that you’ll find people pulling quarters while operators struggle to hang on to their precious coin supply.

The ones doing the yanking are those sly devils who take advantage of convenient change-making and then spend their booty elsewhere. 

Whether they make a beeline to the dispenser or hang around until the coast is clear, quarter bandits rob laundries of valuable currency used by paying customers.

It’s an age-old battle that’s getting uglier. 

The uptick in coin snatching stems from poor circulation continuing to plague a pandemic-weary country. Millions of quarters flow out of the U.S. Mint yet lay dormant in households. The actions by our nation’s less than accommodating banking system certainly hasn’t made things any easier.

A check of social media reveals plenty of aggravated laundry owners out there. The rants are peppered with creative strategies to regain control of automated cash exchanges. Some impose a fee by shortchanging payouts. Others are disabling higher denomination bill acceptance or going so far as shutting off electricity to the changer when a non-regular dares to step up. 

While protecting hopper inventory for in-store use makes perfect sense, these drastic measures don’t. Change-making is an amenity just like folding space and air conditioning. Creature comforts at the laundromat shouldn’t come with charges, restrictions and added oversight.

Kicking out 19 quarters for a $5 bill or denying customers the opportunity to break tens and twenties flies in the face of the self-service laundry model. And keeping one eye on the camera along with a finger on the changer’s kill switch is simply a waste of time.

I get the frustration. One of my pet peeves managing coin-ops was getting played by the bandit’s hit-and-run antics. I’m still waiting on those clothes baskets that were supposedly sitting out in the car.  

Changing up the change

Walkaway coins have always been part of the laundromat biz. Fortunately, running quarter-negative — where money box collections fail to fully replenish changers — rarely impacted ongoing operations. 

That’s not the case these days. Owners are seeing hopper levels drop and access to bank inventories dry up. Everyone is looking for a solution. 

The answer, as it turns out, was always right there at the change machine.

Just ask San Diego operator Scott Badarak. His unattended laundry chain thrives around apartment developments minus the quarter drain. He switched to dispensing tokens from his dual hopper changers years ago and never looked back.

“I needed some way to control my stores,” he explained. “I knew if I go with tokens and put the signage up, then everything that goes out of those machines will be used there. I won’t have people coming off the street.”

Badarak continues to welcome walk-in quarters alongside his changer-dispensed tokens at every washer and dryer by employing multi-coin drops.

Bucking the bandits

Enter dollar coins. Like tokens, they aren’t the currency of choice at multi-housing complexes.

Dispensing a mixed payout of quarters and dollars — or dollar-valued tokens — caters exclusively to in-house laundromat customers, not apartment dwellers. And that blending works just as well to halt the parade of neighborhood businesses feeding in twenties to restock cash registers down the street.

Dual coin or coin-token combinations are proven solutions to the quarter dilemma much of the industry largely overlooks. A recent Facebook poll conducted by Laundromat Owners Showcase revealed 77% of operators maintain the long-standing protocol of changers paying out a single denomination coin.

How to win a tug of war

Change-making is one of self-service laundry’s modern marvels. The advent of multi-bill acceptance aligned well with a growing consumer appetite for multi-load equipment. 

For decades, operators have grown accustomed to big bills coming into their changers and small coins going out. The majority still deliver the equivalent of two full rolls of quarters for a twenty. No wonder the laundromat is treated like a community bank. 

Want to win the tug of war against quarter bandits? Dig in your heels and grab hold of dollar coins or tokens.

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Laundry isn’t ready for Dollar Coin Only

 

I once asked the wisest man in coin-op pay to predict when quarters would disappear from laundromats. His response: When the cheapest wash tops $5. 

It sure looks like we’re in for quite a wait.

Seven decades after the first meters were installed, small washers average under $3 a load. At this rate, who knows when they’ll ever hit five bucks, let alone surpass it.

For some laundry owners the waiting game is over. Their coin patrons have one choice: Big. 

Welcome to the Dollar Coin Only laundromat, where one size fits all. Got quarters? Sorry, no dice. 

I’m a big fan of big coins, but not this setup. Laundromats simply aren’t ready to run on dollars alone. Allow me to explain.

Customers aren’t ready. They save up quarters and expect to spend them. 

Operators aren’t ready. They buy equipment with quarter incremental pricing and expect that flexibility.

And then there’s this: The U.S. Mint produced 2.7 billion new quarters last year and churns out millions more each month. That’s on top of the billions already in circulation. Dollar Coin Only machines will reject them all.

It begs the question as to why anyone would turn away the most commonly used coin in laundry at the point of sale.

How we got here

Today’s quarter vended stores evolved after decades of mixed coin use. Nickels, dimes and quarters kept circulating until conditions were ripe to preserve just one.

The quarter went solo after it was universally accepted and priced in at every machine. But as efficient as that single coin was, it started looking mighty small as washers grew larger. 

When front loaders started edging out top loaders, the quarter’s weakness was exposed. It was painful to watch customers fill, push and pull a coin slide not once, but twice. And to see owners having to collect so often.

Leonard and Ray Susmarski had the solution and helped blaze a trail for dollar pay back in the 1980s. The brothers stocked up on the beleaguered Susan B. Anthony coins, applied paint, and circulated them alongside quarters at their Hart’s Coin Laundry chain in Chicago. 

While employing dollars was a novelty, mixing coins wasn’t. Up until the time quarters took over, laundromat changers kicked out two or three different small denomination coins which were then deposited in machines either individually or as a combo. The Susmarskis merely supersized things with their dollar-quarter pairing.

Dual Coin with the Susie B was extremely successful at Hart’s and other stores, but never embraced by the industry. 

Operators got a second shot with the minting of a redesigned “golden” dollar and the rollout of multi-coin acceptance drops. Finally, their overflowing money boxes would have some breathing room.

Most chose the Dual Coin format — changers dispensing two coins and both welcomed at every washer and dryer. Others tweaked the formula by paying out strictly dollar coins, setting all prices in whole dollar amounts, and inviting quarters through the door under what’s known as “Dollar Coin Mostly.” 

In either case, patrons who had grown accustomed to using quarters could do so.

Today, Dual Coin and Dollar Coin Mostly continue to wean laundromats off quarters, achieving collections of up to 80% dollars. 

Coining yet another phrase

You can thank social media for introducing the third pay tier, Dollar Coin Only — a quarter-less environment where customers pump bucks into drops and owners dump ’em back into hoppers.

The single coin format, punctuated by a pitch to ditch quarters, is a fixture on an association-sponsored online forum with the host’s blessings.   

Curious operators are led on a journey to leap from one coin to another by tinkering with old quarter mechs or employing new electronic drops set exclusively for dollar acceptance.

The online exchanges draw an impressionable audience, most of whom have never heard of dollars used in a laundromat. Frankly, I stopped counting the number of owners who’ve told me they thought dollar coin pay just meant Dollar Coin Only.

Oddly out of touch

Dollar Coin Only is known to pack the same punch as loyalty cards when it comes to knocking out quarters. While that may be true, the format seems oddly out of touch with an industry where those small coins aren’t going anywhere fast. Nine out of ten laundries accept them.

Heck, even the biggest players in card pay reversed course and brought back quarter compatibility with development of their hybrid systems. 

Laundromat operators and the distributors who design stores are likely to take the path of least resistance. That means sticking with quarter increments on washer base pricing, cycle modifiers and dryer time. 

Whole dollar washer vending and full cycle dry are the exception rather than the rule, posing a major roadblock for widespread implementation of Dollar Coin Only pay.

Sorting through the differences

How does Dollar Coin Only differ from Dollar Coin Mostly? 

While both feature changer-dispensed dollars and machines priced in $1 increments, Dollar Coin Only — like traditional Quarter Only — skips sorting. 

That’s trumpeted a lot online but, in reality, separating $1,000 per minute by high-speed sorter has never been a big deal.

On the flip side, a Dollar Coin Mostly store takes in quarters at washers and dryers arriving with customers. For the typical operation, that translates to about 20% of revenue, or roughly $20,000 annually for a laundry doing $2,000 weekly. Not exactly small change.

You decide: Do four quarters make a buck or not? 

Turning off owners

From my vantage point, Dollar Coin Only’s hardline stance on killing quarters has turned off way more owners than it turned on. There’s an untold number who are in need of circulating dollars, but remain on the sidelines or take a detour testing out alternative pay formats that won’t significantly reduce their dependence on quarters.

In short, Dollar Coin Only has postponed — rather than promoted — laundry’s long overdue move to adopting higher denomination coinage.

Will laundromats ever run on dollars alone? I posed that question as well to the wisest man in coin-op pay. 

His response: You’ll see a $2 token paired with the quarter before that happens.

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What’s kickin’ at the kiosk?

 

Laundromat pay kiosks have been around for decades. 

What began with the simple push-pull of a coin slide spitting out wafer-thin wash tickets graduated to ones and fives being exchanged for value-added cards. Soon it was central pay’s turn, bypassing the plastic altogether with a direct link to every machine in the house.

Fast forward to today’s stylish pay stations inviting not just currency, but debit cards, credit cards and smartphone wallets to boot. 

Walking up and paying up at the kiosk remains a cornerstone of what’s long been heralded as the laundromat’s next frontier — a world of clean without cash. 

Seems someone forgot to tell the customers.

It turns out laundry patrons are more likely to insert money at a kiosk than swipe a card or tap their mobile wallet. Cash is indeed king when it comes to pay station transactions, according to a recent social media poll. 

Seven-in-ten store operators (69.6%) with a kiosk reported cash as the most popular means to transact business at their device. Credit/debit cards and smartphone wallets came out on top for 21.7% and 8.7% of laundry owners, respectively.

The findings from Facebook’s Laundromat Owners Showcase snap poll show yet again how cash is favored by consumers of self-service laundries. That’s not surprising given nearly one quarter of Americans are either unbanked or underbanked, leaving them outside the reach of credit and debit cards or mobile pay options.

All the moolah customers feed into pay stations is one thing. What owners give back is quite another. Freebies are flowing like never before. Facebook is filled with posts, promos and threads in a public display of oneupmanship as to who can offer the most.

Just how far will operators go to entice people to part with their money in exchange for a little loyalty? Try the extra 25% load tacked on to each and every $20 bill spent at a West Coast card store. Or check out a Midwest hybrid chain whose opening salvo is dollar-for-dollar rewards.

Those proclaiming cash is dead are the very same ones offering the biggest incentives to bring it in. Transacting with money isn’t just accepted, it’s encouraged!

Cashless in name only

Make no mistake, laundromats with kiosks aren’t cashless businesses. They rely on the almighty dollar just like any coin-op.

Laundry kiosks and proprietary card systems are tied to cash as tightly as mobile pay is tethered to credit and debit cards. Yanking out every coin drop won’t stop money coming through the door. It’ll just be stacked up in a cabinet. Coinless yes, cashless no.

Dispelling the myth behind these so-called cashless operations goes a long way in understanding exactly why kiosks remain part of the industry’s payment landscape. They exist because of their arch nemesis — the quarter.

A pretty penny

Nothing comes close to the quarter’s domination in laundromat pay. And with larger machinery commanding higher vend prices, there’s more and more of them to deal with.

Kiosks reduce or eliminate coin collections by cutting off bill change-making and transferring the dollar value over to a card, app or machine.

Kiosk marketers pitch their hardware much like other alternative payment platforms by calling coin usage a “daunting task” or “burden.” But the two words you’ll never hear them say are “dollar coin.” And for good reason. They don’t want you to know that money handling and collection frequency are dramatically reduced by simply replacing four quarters with one higher value coin.  

Embracing high profile technologies targeting the quarter can cost a pretty penny when pay stations, device networking, fees and maintenance all come into the picture.

An ingenious solution

The idea of consolidating cash inside a kiosk is a good one. I did just that to help ease collections for my dad at our family’s flagship quarter coin-op way back in 1984. 

Our earlier attempts to go plastic with tickets and tokettes had gone south and we eventually circled back to coin. There was something about keeping things round that made sense for a laundromat. The ingenious solution: Token kiosks.

My father’s hour-long collection routine was reduced to five minutes. He’d unlock our cash-for-token changers, grab the bills and head out the door. Those “no-cash-value” brass tokens sitting in the washers and dryers could always wait. 

Still kickin’

The modern laundromat pay kiosk is as simple and economical as dispensing dollar or quarter valued tokens from a changer. Customers use cash, credit or debit cards to obtain tokens and drop them in at acceptors on washers and dryers.

Kiosks are alive and kickin’ — especially the ones kickin’ out tokens.

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Pulling back the curtain on laundromat pay

The curtain is getting pulled back on the mystery of how laundromat customers pay.

A January snap poll found eight in ten operators receive most of their self-service machine revenue in the form of coins. That’s right, 80% tally up more coin receipts from washers and dryers than any other payment method.

Seeing coin-operated transactions dominate the revenue stream will shock many. After all, it runs counter to a sales-driven narrative that customers favor a laundry experience without cash.

So if old school coin does so well, how about the new kid on the block — pay by app?

When asked last May what percentage of machine revenue they recorded from smartphone app or mobile wallet payment options, the overwhelming majority of laundromat owners — some 84% — achieved under 10%.

The poll was repeated in December and this time around it was six-in-ten below the 10% mark.

You won’t find these numbers published in the usual industry reports. They’re posted online at the Laundromat Owners Showcase Facebook group, a diverse community of operators employing coin, token, card, smartphone and hybrid pay formats.

That popular social media platform is helping shine a light on what matters most when it comes to laundromat pay: How customers spend.

And the survey says…

Consumer pay habits are widely studied in the business world. Unfortunately, the same can’t be said for vended laundry, where the focus has been squarely on operator — not patron — preference. 

According to the Coin Laundry Association’s 2020 survey, 89% of owners offered washers and dryers with a quarter pay option. The next closest were credit card — coming in at 27% — and proprietary card at 18%. As for smartphone pay, it was on tap inside an estimated 11% of stores.

While the yearly study summarizes installations nicely, it falls short of revealing what those standing at machines do before hitting the start button.

Today, there are more payment choices than ever before — some familiar, some not. Giving patrons options is one thing. Getting them on board is another.

Questions continue to swirl around whether customers prefer to plunk coins and tokens, swipe plastic or tap smartphones. Operators aren’t getting straight answers and that’s a shame. Choosing a payment format is one of the most critical management decisions they face.

Untangling the web

It’s not easy untangling what happens on wash day. Is loading a proprietary card with a $20 bill just another cash transaction? Are people using both an ATM and changer considered credit card or coin customers?

Even defining what’s what in the laundromat isn’t clear cut. “Hybrid” can mean coin + credit card to some and coin + token to others. Both are cash/cashless tandems, yet rarely uttered in the same breath.

If this all sounds confusing, you’re not alone. Thankfully, one social media outlet is stepping up while the industry’s legacy pollsters have been sitting back.

The Laundromat Owners Showcase Facebook group I launched a year and a half ago has grown to over 2,000 members, surpassing the paid ranks of coin laundry’s decades-old association. 

More importantly, it’s the only laundro-centric gathering where the community’s pulse is taken on an almost weekly basis.

Showcase survey questions are designed to engage operators and deliver the answers they’re looking for. And while these snap polls are unscientific, there’s no denying their appeal as responses are tabulated in real time with full transparency. 

It’s been a long time coming. For far too long, self-service laundry has been measured the same way. Flip through past national studies and the questionnaire is almost a carbon copy. That cookie-cutter approach is stale.

Compiling statistics of machines on the floor by poundage doesn’t shed light on which records the most turns. Reporting the store’s combined utility percentage against revenue won’t track the impact of skyrocketing water and sewer rates. And checking off a laundry list of installed pay options isn’t telling anyone what’s ringing the till.

The story of today’s laundromat can’t be told with data that barely scratches the surface. Owners want to drill deeper, much deeper. Their livelihoods depend on it. 

Take a look behind the curtain. You’ll be joining a lot of operators who are no longer left in the dark.

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Making bank at the dryer bank

Dryer pricing resembles limbo dancing: Lower the minutes and you might take a tumble.

The bar sure isn’t set very high when it comes to minutes-per-quarter on a 30-pounder. So I’ll ask: How low can you go? The majority of laundry owners shimmy down to six, possibly five.

But we all know tinkering with dry time is risky business. Operators typically move instead to their washer coin drops and raise the bar, not lower it.

Dryers are keeping the self-service laundry industry stuck in a time warp. While five-and-dimes graduated to dollar stores and car wash vacs went to a buck, neighborhood coin-ops remain largely quarter affairs. Walk into the laundromat and 25¢ still rents out a $6,000 dryer.

Paying to dry with quarters reigns supreme at eight out of ten stores, according to a recent online poll conducted at the Laundromat Owners Showcase Facebook group. And those big rotating hot pockets aren’t going anywhere price-wise.

Statistics reveal just how stagnant things are. For the fourth — yes fourth — year in a row, six minutes per quarter was the most popular tumbler vend price reported in American Coin-op’s national survey. The 28.6% of poll respondents at six minutes barely edged out the 27% who shaved down to five.

Patrons have long grown accustomed to paying little or nothing to dry and have backed owners into a corner. Fearing backlash from regulars who perceive dryer adjustments as sneaky, store operators take the path of least resistance by instituting washer price increases.

The resulting imbalance is pronounced. A drying department typically pulls in roughly half the income of washer banks, yet occupies a larger overall footprint than their wet counterpart when floor space devoted to machinery, service area and folding is taken into account.

Here’s a look from another angle: The same amount of time doesn’t translate into the same amount of money in the laundromat world. That $6 you collect for a half-hour wash-rinse-spin in a 60-pounder trumps the $3 or less rung up for delivering simultaneous 30-minute cycles on a stack 30’s top and bottom pockets.

Up the minutes by upping the coin

Truth be told, the drying department is the laundromat’s most neglected profit center. And much of the blame lies with the reliance on quarters as the pay format. Operators are locked in with a low denomination coin that inhibits revenue growth.

The solution to the dryer dilemma is easy: Up the minutes by upping the coin.

I’m old enough to remember laundry’s decades-long transition to all quarters. Washer coin slide design supported a mix of nickels, dimes and quarters. Coin drops welcomed quarters. But over at the dryers there were plenty of holdouts — original mechanical knobs that turned on a dime.

Inside our family’s store chain, time on a Huebsch had tumbled down to a mere five minutes per dime. Maintaining that level wasn’t an option for my dear ol’ dad. He retired those ten-cent meters by simply heading over to the supply house and picking up new ones that accepted a larger coin. It was goodbye five-for-a-dime and hello ten-for-a-quarter — double-digit minutes and a healthy price bump. A full half-hour cycle brought in 75¢ compared to 60¢, equating to a 25% increase.

Fast forward forty years and many of you find yourselves at a similar crossroads. Do you hold at the five-minute-per-coin mark or follow the proven — and profitable — path forward with a higher denomination coin?

The math is straightforward for those at or near five minutes: Offer a 15-minute dry with one $1 coin or a full 30-minute cycle with two $1 coins. On a per minute basis that works out to 6.67¢, and delivers a half-hour dry for $2 versus $1.50 — up 33%.

A one-third increase sounds steep, but bear in mind this is calculated for a multi-load capacity machine. Boosting mid-size front loaders by 50¢ is quite common nowadays.

Moreover, using fewer coins lessens the impact of a dryer rate hike. Customers perceive you’re giving them lots of time per insertion and, in turn, greater value for their money.

Two $1 coins for a 30-minute full cycle hits a sweet spot by drying most average loads. Patrons of stores equipped with high g-force extraction washers might get the job done in half the time with just a single $1 coin.

And with the flexibility of today’s dual acceptance coin drops on the market, dollars roll in tandem with quarters to satisfy top-ups as well as the entire vend price.

That’s right, go ahead and give customers what they want — more minutes per coin. Raising the bar will spin profits back into your dryer department. All it takes is a dollar.

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Are hybrid pay laundries essentially quarter stores?

The pandemic is helping us understand what’s truly essential in laundromat operations. Remaining open to the public is one thing. Giving them what they want and need is something else. 

Navigating the surreal coronavirus landscape demands a novel approach to the business of washing and drying. We see it evolving before our eyes: Load and go replacing watch and wait. Counter service moving curbside. And pickup & delivery vans driving everything home.

While much has changed, one thing has not — the industry’s reputation. Last spring, news crews across the country turned the spotlight on dedicated store staff and their non-stop sanitizing of washers, further cementing the laundromat as the place to get your clean on.

Suddenly, out of left field, the pandemic threw a curve ball. Cameras swung around to focus instead on the change machines. There was a buzz about a coin shortage stinging owners who were happy to serve as the neighborhood laundry, not its bank.

Day by day the changer hopper levels kept dropping. And those of us who deal with laundromat pay saw incoming calls rising. Store operators weren’t just annoyed by quarters walking out the door, they were agitated — and worried. 

Non-patrons have always made a beeline to changers. The perpetrators see no harm feeding in a twenty to gather up 80 quarters before heading home to wash loads in their apartment laundry room. To them, it’s a dollar-for-dollar exchange. 

The pandemic’s perfect storm of closed bank lobbies and hoarding mentality turned what used to be an occasional visit into a parade. Quarter-strapped individuals and businesses started hitting laundromats to stock up. 

Frustrated owners, who used to casually dismiss the public’s easy access to change, were coming under assault. They came to the realization that their well-oiled moneymaker runs on one coin — the quarter. 

When hundreds — if not thousands — of dollars in change goes AWOL weekly without sufficient replenishment, the vulnerability of a coin dependent business is sure to give its owners sleepless nights. After all, how can you expect to operate when the very money used to make money never makes it to the cashbox?

Hybrid owners make noise

Coin’s flight out the door was in the news and quickly picked up in social media circles like my popular Laundromat Owners Showcase Facebook group. 

Interestingly, the television segments and print articles revealed a fair share of hybrid pay operators complaining just as loudly as those running quarter-only stores. 

On display for the cameras — and for all the world to see — were card readers, kiosks, phone app logos and QR codes vying for attention right there with the ubiquitous quarter coin drop.

Those nifty alternative pay formats received passing mentions, along with expressions of hope that the public would avail themselves of the cashless options on offer. But the message coming from both laundry customers and owners could be summed up in three words: Quarters, quarters, quarters.

Fears of dirty money spreading the infectious disease turned out to be nothing more than unsubstantiated reports and another attempt to trash cash. In fact, as coins became scarce, people couldn’t wait to get their hands on more of them.

Focus is on the mech, not tech

When I don my sales hat and field calls from laundromat operators across the country, the majority tell me they run exclusively on quarters — a single coin dispensed at changers and accepted in every machine. I listen to their all-too-familiar tale of quarter bandits raiding inventories before we get to work on solutions to chase them away.

Then there are the inquiries where I hang on the caller’s every word — hybrid owners whose pay platform boasts a means to activate washers and dryers without quarters. 

Their machine readers, wall kiosks and phone apps are functioning fine, thank you. So why are they ringing me — that guy with a coin and token acceptance drop? The calls speak volumes: The coin shortage is hurting them as well.

Employing great technology didn’t break their dependence on coin. They still find themselves essentially running a quarter store. Whatever the figure — 70, 80 or 90 percent — the biggest chunk of their revenue stream relies on that single round coin measuring less than an inch. 

One west coast operator told me he remains optimistic more customers will tap his laundry’s phone pay system. Today, fewer than one-in-ten use it. Faced with an outflow of quarters and bank tellers turning their backs on pleas for bagged or rolled coins, his focus was on the coin drop mechanism itself, not what was tethered to it.

Like so many others, laundromat’s dynamic duo of dollar coins and quarters prompted his inquiry. When the topic of circulating tokens and becoming his own bank entered the conversation, he was all ears. 

What perked him up? Operating a private money system that eliminates the reliance on quarters while welcoming customers to spend with coin, paper currency or even credit and debit cards.

It’s been 37 years since I converted my family’s coin-op to a token-op, yet the same holds true today: The system works and it doesn’t rely on quarters.

Pay options make sense for laundromat owners. But it must be a humbling experience to take one of the highly-touted hybrid routes and watch as your patrons bypass new tech for the ol’ mech. 

I guess you could say one part of that hybrid isn’t proving to be so essential after all.

 

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Time for your own money system?

 

If there were any lingering doubts as to how big a role coin plays in the laundromat business, then the pandemic surely put those to rest. 

In June, just as self-service laundry traffic started picking up, store owners got another punch to the gut when quarters began disappearing from changer hoppers as fast as toilet paper on store shelves. 

With activity down and the fear factor up, coin circulation throughout the economy seized up. Laundromat operators found themselves in a perfect storm as businesses and bank lobbies closed, consumers clutched their money, retail vending machines sat idle, and the US Mint briefly slowed new coin production. 

Our nation’s central bank — the Federal Reserve System — was caught flat-footed and announced temporary rationing of coin inventories distributed to financial institutions until conditions improved. 

Laundry social media was abuzz with reports that local bank branches weren’t fulfilling bulk coin orders and, ironically, waiving off bagged loose quarter deposits.

Given that eight out of ten laundromats take in quarters at washers and dryers, the impact was felt in a number of markets — big and small — from coast to coast. Simply put, the lifeblood of the industry wasn’t flowing as it should.

For many coin-op owners, the cutoff of circulation to their payment system was a stark reminder that a plentiful supply of change is as critical to daily operations as water, gas and electricity. After all, you can’t run machines without customers pumping in money.

Coin bandits cash out

Remarkably, even laundries which historically generate excess coins saw their overflow buckets getting lighter as more and more quarters rolled out the door. The culprits: Quarter bandits armed with bills, not crowbars.

Among the usual suspects were apartment dwellers making a beeline to changers and bypassing laundry machinery. Joining the parade of non-patrons were local business staff and anyone else needing spare coins. With walk-up bank lobby services curtailed and grocers saying no to a roll of quarters for a ten, laundromat changers became the neighborhood’s go-to favorite.

On the floor, owners did what they’ve always done — posted signs, offered up friendly reminders or harsh scoldings, and tried their best to police inventories so regulars could have coins to wash and dry. Some went high tech, eyeballing suspected quarter bandits by camera and killing the changer’s power supply via a remote-controlled switch.

Back on social media, the Laundromat Owners Showcase Facebook group initiated a matchmaking service for the haves and have-nots. The platform, where owners could connect and privately exchange wads of cash for much-needed bags of coins, was a quick fix for those coping with a broken supply chain. 

Like the pandemic itself, there were pockets of the country where laundries experienced little to no disruption of coin inventories and just carried on one quarter at a time. 

Many operators weren’t as lucky. They came to the realization that a quarter-only pay system — as simple as it is — doesn’t have built-in redundancy. In other words, no backup in the event of failure. 

Dollar stores buck the trend

Among the laundry formats weathering the disruption well in the early going were dollar stores. The Fed’s rationing of low denomination circulated coins — pennies, nickels, dimes and quarters — didn’t extend to the billion golden bucks stockpiled inside government vaults.

It was business as usual at the changer, where dollar-only or blended dollar-quarter payouts served paying clientele and repelled outsiders.

Quarters just don’t get as much play in laundromats that circulate dollars, helping to absorb any shockwaves generated by government or banking industry policy. Mixed dollar-quarter dispensing means fewer quarters filling hoppers. And in “dollar coin mostly” laundries, the only quarters are the ones brought in by patrons and happily accepted at dual coin-capable drops.

While dollar laundries seemed immune to the pandemic, scattered reports began filtering in by mid-July that select banks weren’t completely filling some customers’ standing orders for boxes of rolled $1 coins.   

The question as to why dollars were slow to make it out of the vault will hopefully be addressed and acted upon swiftly when recommendations by the Federal Reserve’s newly-formed “U.S. Coin Task Force” are announced in the next few weeks.

Tokens shine brilliantly

All the coin news stimulated renewed interest in what many dismiss as an old school payment solution — tokens. Take a look around and it’s the lucky owners of token-operated laundromats who are laughing all the way to the bank. They kept the flow going using their own money system and without the help of Chase, BOA or Wells Fargo’s coin supply.

These savvy operators — not the Fed or banks — remained in control of how things at their store are valued, stocked and circulated. Each token is purchased far below face value from a private mint and functions the same as the real deal when it comes to satisfying a vend price. 

Their patrons know instinctively how to spend tokens — whether valued at a quarter, dollar or even two dollars. And owners certainly don’t lose sleep when a dollar-valued token that costs a quarter gets pocketed and heads out the door.

Some owners circulate higher value tokens with quarters, while others go all-in, all-token. Then there’s those who’ve tapped into an emerging hybrid pay platform— cash, token and credit card-to-token. Any way you wanna roll, the tried-and-true coin-like alternative is starting to make sense. 

Best of all, tokens are providing these operators a critical backup. The redundancy is right there inside the changers, as well as at every single custom dual coin/dual token drop installed on the washers and dryers. 

It’s the kind of flexibility — and peace of mind — that can help you through the best of times and even a pandemic.

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Laundromats crack the code

 

Laundromats have finally cracked the code on getting more people to use them: Bring the store to their front door. That’s right, put the laundromat at the welcome mat.

Picking up and delivering laundry might not be new, but having the neighborhood self-serve do the schlepping is. Bundle after bundle after bundle — laundromats nowadays are loading up machines by hitting the road.

Aaron and Matt Simmons got on the pick up & delivery bandwagon a few years ago. Aaron took stock of his parents’ established Super Suds Laundromat in Long Beach, California, and initially transformed it into a drop-off dynamo. When over-the-counter went over-the-road, Matt joined his brother and the two developed Curbside Laundries, a point of sale system designed for other shops wanting in on the hot niche market.

Seemingly overnight, a very successful laundry started by Sanford and Linda Simmons was propelled to the next level by their street savvy sons. Brick and mortar was no longer defining the Super Suds operations. This family business had tapped into a customer base that was always there, but never pursued.

The sheer volume of bags being trucked into Super Suds soon overtook what was carried in by self-service and wash-dry-fold patrons. We’re talking tonnage here — a new income stream well into the six figures.

Dangling the carrot

The coin-op industry has always pitched households to launder in public. But getting single family homeowners and their clothes out of the basement wasn’t as easy as plucking apartment dwellers from centralized facilities. It was a hard sell. 

As far back as the 1940s, consumers could own their own Laundromat by hooking up Westinghouse’s popular front load washer-dryer pair bearing its trademarked name.

When top loaders seized command of the domestic market, laundromat operators saw an opening to reel in homebodies with rows of Big Boys, capable of handling bedding and bulky items that no sane person would dare wrap around an agitator.

Coin-ops to this day still get their fair share of seasonal do-it-yourselfers who pop in to clean a comforter or doggy bed. But what’s not being hauled in by homeowners is the mountain of kids clothes. That pile of money remains stacked high in the laundry room awaiting a spin in an uber smart, extra large capacity washer and dryer.

Cashless pay for everyone

Aaron and Matt brought their storefront facility online. For residential customers, this new laundromat experience clicked, especially when they weren’t bothered to go there in person or even place a phone call. Tapping in an order for personal laundry pick up & delivery service meant no basket hauling and no face time with unfamiliar machines.

Even though these patrons never step foot inside, their impact is being felt in store operations. Super Suds’ third shift gets busy around 10 p.m., knocking out what drivers ferried in hours earlier. Laundry throughput sure revs up when the night crew doesn’t have to compete with daytime customers for machines.

Aaron and Matt’s staff processes every load in every washer and dryer without touching money. The system offers security to employees in the wee hours, as well as peace of mind for the operators who prefer a cashless bank.

Super Suds utilizes the same pay format for both its bundle and self-service businesses — tokens. Higher value dollar tokens used in combination with lower value quarter tokens. And each is accepted at dual token drops installed on all the machines in the house. Simple, reliable and oh so cost efficient.

The Simmons brothers cracked the code of the lucrative home laundry market. And they accomplished this feat without having to break the bank when it came to a cashless payment format on the laundromat floor. 

Get a closer look at Super Suds in a video here.

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The two coin solution

 

The laundromat industry’s long overdue move from quarter-only to dual coin pay appears to be taking hold. Dollar coin acceptance is up six percentage points and now ranks as the third most popular vend option, according to the latest Coin Laundry Association annual poll. 

Quarters aren’t gone — not by a long shot. They’re still welcomed by 82% of the laundry owners surveyed. But on the other side of the coin, operators running quarter-only vended stores dropped ten points, from 63% to 53%, in another clear sign of the shift.

Working with both dollar and quarter coins is foreign to most operators and distributors. And who can blame them? Keeping it all quarters at the laundromat for a quarter century is a long time.

Many newcomers to the two-coin pay format believe it calls for doubling up on coin drops, while others think it’s time for a high-tech mech. Those who’ve been in dual coin for years know there’s a simpler solution.

Pick the right slot

Two coins require two coin drops — one for quarters and one of dollars — right? Surely patrons can figure out the correct slot if you place them side-by-side, wouldn’t they?  

In a perfect world, all the quarters would be inserted on the quarter side. In the imperfect world of a laundromat, they aren’t. 

Dropping a quarter in the dollar slot is a real crap shoot. If it’s returned, customers get a redo. If it jams, they’ll get mad. If it falls through without registering, they’ll get really mad. And if that quarter counts as a dollar they’ll be happy, but the owner who got taken for 75 cents sure won’t.

Installing two coin drops side-by-side to handle each denomination not only adds cost, but complicates an otherwise simple transaction. Your customers aren’t out to cheat you, but they do make mistakes. 

The bottom line: Two inlets for two coins is unfamiliar territory for laundromat patrons accustomed to using just one.

The high-tech mech

Many agree with the above statement and believe it’s best to rely on technology when it comes to dealing with more than one coin. They embrace a single inlet electronic drop that can be programmed to accept the coins they want and reject everything else. To them, it’s easier to teach the coin drop than the customer.

In theory, the electronic devices should reject bad coins. In practice however, good coins also get returned. While the coins remain the same, the electronics and environment change. Over time, a high-tech mech simply doesn’t understand the coins and kicks them back.

Sadly, store owners are clueless as to what’s happening because word never reaches them. People like to complain when they lose money, not when they get it back.

All that lint flying around a laundromat impacts the coin drop environment. The fuzzy stuff takes refuge inside, clinging to soap residue and other debris. It’s far from an ideal condition to try and read coins electronically.

Imonex’s manual approach 

Single inlet drops designed to manually separate coins without electronics are tailored to fit the dual denomination pay format. How the coin is handled during the roll down determines what makes its way to the vault. The only sensor involved triggers pulses, not the judgment call as to whether a coin is good or bad. 

By erring on the side of acceptance rather than rejection, all the good coins pass. The tiny fraction of undesirable ones that make it through and get credited is a small price to pay for keeping cash flowing and machines operating. 

Dual coin pay is definitely on a roll in laundromats. If adding dollars is on your mind, remember there’s a simple solution to do the job. 

The goal is to make money, not turn it away.

Preventative maintenance helps maximize coin flow and minimizes the impact of lint buildup in coin drops. Here’s a helpful video for cleaning Imonex acceptors. 

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