Going cashless at a self-service laundry is more complex than just taking quarters out of play. Operators have a variety of options when it comes to implementing a cashless solution.
First, starting a machine by swiping a reusable card instead of dropping quarters will always appeal to some owners. In addition, cashless systems can allow owners to monitor sales, collections and system status from an outside location. Price changes can be made quickly. Marketing activity, such as loyalty programs, can be implemented.
With some systems, customers can have the option of using either credit cards or coins to start the machines. Even the card value stations have some unique features such as voice systems that interact with customers in multiple languages.
Looking for a totally different cashless approach? Tokens might even merit some thought. Searching for hidden costs, and listening to what other operators have to say, may prove beneficial in your decision-making process.
DRIVING DOWN HIDDEN COSTS
Eliminating cash by accepting credit, debit and prepaid cards in laundries is a trend that is slowly sweeping across the United States, says Ron Farmer, executive director of MicroPayments at Heartland Payment Systems. Heartland is a provider of cashless payment solutions, credit/debit/prepaid card processing, payroll, check management and other payment solutions for more than 250,000 businesses nationwide.
“It is very important for businesses to accept these types of cards to remain competitive and capture their share of consumers’ dollars,” says Farmer. “Credit and debit card usage continues to grow as consumers find the need to manage their cash flow, want to earn reward points, or simply like the convenience.”
State-of-the-art technology and new, innovative ideas are helping laundry owners easily make the switch to cashless to enhance their operations, Farmer says. “Bringing in new technology cannot only improve customer relations and retention by providing convenience, but it can also increase their bottom lines and drive down their costs in a number of ways as well.”
If you’re undecided about going cashless, Farmer offers the following operator benefits:
While going cashless has numerous benefits, it’s important that business owners avoid potential payments processing pitfalls that could cut into — or wash out — their bottom lines, Farmer warns.
“Payment processing can be complex and every processor approaches merchant pricing differently,” Farmer explains. “But often, introductory rates are not honored, fees are marked up or deliberately misrepresented, and other fees are hidden — or just plain fake.”
Farmer says processors often hide “junk fees” behind cryptic codes, jargon and fine print in offers and contracts — making them purposefully hard to decipher, especially for time-pressed laundry owners. “Then monthly statements are so hard to read, business owners have no idea what they are really paying.”
Payment processing costs are often among the three largest costs a business incurs, Farmer says. To keep expenses down, he advises laundry owners to learn the facts and logistics about payments processing and their rights as merchants.
“When owners have the right questions to ask, they can eliminate hidden or unjustified fees and reduce their out-of-pocket expense on every transaction — and put these savings toward more important things ... like their businesses.”
LEARNING AT THE LAUNDRY
Sometimes the best way to evaluate a cashless system, and any myths associated with it, is to talk with someone who uses a cashless system.
Some have said that a cashless system is only ideal for a larger store. Don’t tell Richard “Rich” Corley that. Corley owns EZ Laundries, a 1,769-square-foot store in Wilmington, Del., with 18 washers (two 50-pound units; eight 30-pound units; and eight 21-pound units) and 22 dryer pockets (nine 30-pound stack and two 45-pound stack).
The washer prices range from $2.50 to $7, and all are set up with super-cycle options that can add 25-, 50- and 75 cents to the tab. The dryer prices are 35 cents (30-pound) and 70 cents (45-pound).
Corley runs a debit card operation; funds, via cash, are loaded onto a magnetic stripe card by an automated machine inside the laundry. For every $20 loaded onto a card at one time, customers receive a $1 credit. Every time a customer uses a washer or dryer, he/she swipes the card through the card reader and the cost of the laundry service is automatically deducted. Funds can be transferred to a new card if one is lost, stolen or ruined, and the system also allows two cards to pull money from the same account for convenience and ease-of-use.
Corley, who has only been in the laundry business for a little more than a year, is responsible for educating the customers as they walk into the store. “I try to greet every customer and give him/her a hands-on demonstration, including benefits and inner workings of the cashless system.”
“The initial cost is pricey,” Corley admits. “I looked at the investment from a couple points of view. Realistically, I hope to have additional stores and this setup will allow me to tie multiple stores together. I prefer to have as much information as possible.”
Corley is pleased with his system, and believes that the up-front cost was well worth it. Customers also continue to tell him how it simplifies the laundry process, he says.
“It protects customers. Unlike with a smart card system, the magstripe system allows me to transfer funds from a lost card onto a new card. The system saves all of the account data so users do not have to re-register their cards if one needs to be replaced.”
Other system benefits, according to Corley, include:
The economic situation has taken a toll on his store. “To save money in this economy, some people have started washing their clothes at home in the bathtub. Then, they bring their wet clothes to a laundry facility to dry them. Some stores do not allow dry-only customers.” Corley has his own strategy for dealing with this.
“I offer credits towards the cost of drying clothes when a customer uses my washers. On average, the credit pays for one-third of the time needed to fully dry a load of clothes. Dry-only customers are paying a premium rate — an additional 10 cents on each load.”
While profits climbed steadily last year, his business has taken close to a 15 percent loss since October 2008. “The trend of people washing their clothes at home in the the bathtub and bringing them to the laundry facility to dry them obviously affects my profits.”
For more information on Heartland’s MicroPayments division and its Load it Laundry Solutions product suite, contact Heartland at 866-941-1477 or visit HeartlandPaymentSystems.com.
Ashley Kasdorf of Miller Brooks also contributed to this story.