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.
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.