Content about Debit card

CHICAGO — Recent developments in our troubled economy have served to dramatize how credit can be a valuable friend or a dreadful foe. Used sensibly, credit can be a powerful asset in your business life. Use it carelessly and it can become your worst enemy.

You may not need to use credit every day, but when you need it, you can’t afford to have the door closed in your face. Here are nine ways to put credit to work for you and your laundry and not against you:

Consolidating Card Balances Is Not a Cure

You’ve seen the advertisements: “Consolidate all your credit cards debts into one low-payment loan and we’ll negotiate with your creditors to reduce your debt.” Don’t believe it.

Once you allow yourself to get into unmanageable debt, there’s no easy way out. Debt consolidation may sound like an easy cure, but many professionals and business owners have discovered that so-called debt consolidation led them down the road to an even more burdensome debt load.

“Consolidating debts may be only digging yourself into a deeper hole,” says certified financial planner Brent A. Neisner. “Before you take that step, you should ask yourself how you got into debt trouble. Overspending almost always involves emotional and psychological issues that aren’t going to go away by treating the symptoms.”

Eliminate Receipt of Pre-approved Offers

Those pre-approved credit offers that find their way into your mailbox represent a temptation for identity thieves who might try to open new credit accounts in your name or the name of your business.

You can opt-out by visiting the official Credit Reporting Industry website or by calling 888-567-8688.

Be Aware of Differences Between Debit and Credit

While there are many similarities between debit and credit cards, the differences can significantly affect the cash flow in your business.

It’s easier to qualify for a debit card than a credit card, because there’s no credit involved. When you use a debit card, you must already have the money in your business account at the bank. Your purchase is debited to your account electronically as soon as you make your purchase.

Using a debit card is almost like using cash. Unlike writing a check, using a debit card saves you from having to show identification when you conduct a transaction. Having a debit card not only frees you from carrying cash, it will be more readily accepted than checks where you aren’t known.

However, debit cards carry their own set of disadvantages that you need to know about. Unlike credit cards, debit cards give you no grace period for paying your bill. The money is deducted from your account immediately each time you use it.

Keeping your account in balance can be a problem. It’s easy to misplace a receipt and forget to notate the transaction in your check register. That can result in overdrawn accounts and financial penalties.

While you get protection from liability due to fraud on both credit card and debit card purchases, debit cards do not offer the same protection as credit cards in the case of defective or unsatisfactory merchandise. With credit cards, you may dispute errors or unauthorized charges and withhold payment until the matter is resolved. With a debit card, your money is irrevocably spent the moment you complete the transaction.

If you pay off your credit card balances in full each month, the last thing you need is a debit card. You’re now enjoying up to 30 days of free use of someone else’s money. This is “using the float,” the period between the purchase date and when the money is actually withdrawn from your account. In this case, you should congratulate yourself on your financial acumen and hang on to those credit cards.

Never Co-mingle Business and Personal Funds

Not only is mixing your business and personal finances an open invitation to problems with the Internal Revenue Service, it complicates your recordkeeping and cash flow management. You should maintain separate business bank accounts and make all of your business credit purchases on a separate business credit card.

Some experts compare unwise use of credit to use of drugs: It can offer short-term pleasure in exchange for long-term pain. Once the “credit monster” gets his hooks in you, it can be painfully difficult—and sometimes impossible—to free yourself.

However, credit in itself is not harmful. Used skillfully, it can be a profitable tool for managing your business affairs. Use these tips to help make credit one of your business assets, not one of your liabilities.

Click here for Part 1.

CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.

American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:

ACO: What are the top two or three reasons why laundry owners may be hesitant to go cashless?

Michael Schantz, president, Setomatic Systems:

Totally cashless systems can be expensive since they require the owner to convert every machine in the Laundromat. They must also purchase at least two “Add Value Stations” for customers to reload or purchase their card.

The owner will continue to purchase several hundred cards a month for the life of the store. With a hybrid system, you do not have to convert the entire store or buy “Add Value Stations” or cards. The cost of entry is much more reasonable.

Many customers simply will not purchase a prepaid card. These consumers include tourists, seasonal washers (blankets, spring cleaning, etc.), the elderly, and the impoverished who can’t afford to leave anything on their card. In this industry, we can’t afford to lose even one customer to our competition.

Steve Marcionetti, product manager, Card Concepts:

Owners that are hesitant either believe that their customer base will not understand or adapt to the technology, or they believe that the systems are too expensive.

The best way to overcome the fears of customer acceptance is to either visit stores in similar demographics that have a system and talk to the customers, or talk to the storeowners and ask them about customer acceptance and if it affected their business.

As both a solution provider and a storeowner, I have found that the fear of customer acceptance is not warranted and that 99% of the consumers that use Laundromats have already accepted card-based technologies in other aspects of their lives.

For owners who believe that the systems are too expensive, we have easily been able to show strong return-on-investment formulas that make the investment easier to tolerate.

Ryan Carlson, director of marketing, WashCard Systems:

People are worried that all their business is going to get sucked up in fees. If they do the homework and can run through a number of scenarios, they’ll see that, at worse, they’re breaking even.

Kevin Hietpas, director of sales and marketing, Dexter Laundry:

Since there are now systems available to go cashless at a wide range of costs, the two main reasons we see are a customer’s concern that patrons won’t adjust to the new system and the store will see a loss of business, or they are apprehensive about the higher level of technological complexity they are adding to their store.

Amy Gitlin, president, ESD:

First are IRS guidelines. New changes require all merchant statements to be filed along with tax returns.

Second, owners think consumers who use their laundry do not have credit or debit cards because they are not affluent. The simple fact is that 85% of U.S. consumers have a credit and/or debit card. The other 15% use prepaid debit cards. Therefore, you can bet that customers of Laundromats also have credit and debit cards.

Finally, most laundry owners do not agree with the time and cost that can be saved by not dealing with coins and cannot make the cost of installing a payment system of any kind make sense.

“It only takes a few hours a week to collect my store” is the line we hear often. Most people report that coin collection totals about 10 hours a week. But when examining this statement more closely, you will find this activity to be costly and time-consuming. If an owner’s time is worth $40 an hour, that’s $20,000 per year and many hours consumed.

ACO: What are the hallmarks of a successful cashless payment system?

Marcionetti: Like anything, commitment is the most important thing to ensure a successful implementation of any system. Most systems are easy to use, but storeowners should commit to understanding the system and its capabilities so that they can properly train their attendants. When the attendants are well versed on how to use the system, the store’s customers really adapt easily and enjoy using the system.

Carlson: The devil is in the details. How user-friendly is it? Does it automate the heavy lifting for various tasks? Does it give operators control over their ongoing costs or their strict lock-in? Is there flexibility to be used on different pieces of equipment?

Hietpas: Ultimately, the owner determines the success of any payment system. If the owner is pleased with the performance and reliability of the system, it’s a success.

Gitlin: Quite simply, the hallmarks of a successful cashless-payment system implementation are reliability, customer friendliness, efficiency, marketing, and support from the manufacturer and distributor.

Schantz: Setomatic believes the hallmark of a successful payment system is its flexibility to give the laundry customer the choice to pay with any method they desire. That is what will keep new customers coming and drive added revenue. You need a payment system that will not be obsolete in a few years.

Web Exclusive Tomorrow: How are technological advances impacting the cashless store? What level of after-sale support should be expected?

Click here for Part 1.
Click here for Part 2.

To learn more about payment systems:

Card Concepts — laundrycard.com
Dexter Laundry — dexter.com/laundry/products/management/
ESD — esdcard.com
Setomatic Systems — setomatic.com
WashCard — washcard.com

CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.

American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:

ACO: What are the immediate benefits to the laundry owner who decides to go cashless? What are the long-term benefits?

Kevin Hietpas, director of sales and marketing, Dexter Laundry:

By going cashless, a storeowner is trading one set of operational challenges for another. One item that many owners have reported as a major immediate benefit is that their collection time in the store is significantly reduced. With only one unit to collect and no change to handle, owners free up time to devote to other management and operational duties.

At the time of opening the laundry, or transitioning to a cashless system, owners should plan on devoting time to educating attendants and customers on use of the system. Some customers might be resistant to (use) the new system, and making the transition as smooth as possible with friendly help and support will make sure that the laundry doesn’t experience a loss of customers.

Amy Gitlin, president, ESD:

Cashless to some might mean not accepting coins, only smart cards, in your Laundromat, while cashless to another would mean eliminating coin and bills from the Laundromat (and) using credit/debit cards as a means of conducting store transactions. Either way, a self-service laundry owner would reap a number of immediate benefits.

By removing coins or other currency, one eliminates the temptation for theft or vandalism—this also includes employee theft. Another benefit is the reduction or elimination of collecting coins and bills. In addition, the laundry’s customers would benefit from the convenience of not needing to find and carry heavy coins. Instead, they would simply carry their smart card or credit cards to complete their transactions.

By going cashless, your customers are apt to utilize more machines, especially your large machines with higher vend pricing. Your customers will continue to benefit using their bankcard (either credit or debit) by earning more loyalty rewards/benefits associated with their card of choice.

The long-term benefits are easier accounting practices for laundry owners and continued customer convenience.

Michael Schantz, president, Setomatic Systems:

We believe that going totally cashless is no longer in the best interest of the laundry owner. We have been developing these types of systems since 1995, and over the last few years it has become evident to us that a hybrid system is more advantageous to the storeowner than a totally cashless system.

The average Laundromat user does not want to purchase a card that can only be used in your store. Offering the Laundromat customer the convenience to pay with any method they choose is what drives more customers to the laundry.

Our credit card system allows customers to pay for their wash by using coin or their own credit or debit card. No unhappy customers walk out the door because they don’t want to buy a card.

It is true that the storeowner has the convenience of never collecting coins in a totally cashless system, but he or she should be looking to maximize revenue. To do this, you need to give your customers the added benefit of paying by credit card or coin.

The consumer has been conditioned to pay by credit/debit card for even small purchases like a cup of coffee today, so why should they not have that convenience in a Laundromat?

Steve Marcionetti, product manager, Card Concepts:

The obvious immediate benefit is the time savings and the safety of having central collection. What many people don’t think about is what you can do with the time that was once dedicated to pulling quarters from machine.

For many operators, collecting is the primary reason for visiting the store. With collection reduced to only a few minutes, this time can now be used to pay closer attention to the details that make their store attractive to their customers. This is a great opportunity to take some time to speak to the customers in the store and find out what they like or don’t like about it. Taking this extra time to focus on “marketing” the store rather than just collecting has both short- and long-term benefits.

The more obvious long-term benefits come from two important factors: penny incremental pricing and float.

Having the ability to properly price your equipment and maintain a fair profit margin regardless of the increases in utility costs will ensure consistency. Too many coin operators resist increasing vend prices because they lack the flexibility of penny incremental pricing and ultimately lose profit when their utility costs rise. Only when the costs have risen above what they can tolerate do they consider increasing vend prices, and often it’s too late.

Float is the unspent value that is residing on customers’ cards. For example, most customers will add $20 to their card but only spend $16, taking the remainder home to use on their next visit. Two huge benefits here: First, the storeowner gets to hold that money in their account until the customer returns; second, this unused balance is a “loyalty” factor that will encourage customers to return to the store rather than visit a competing store.

As the owner of four Laundromats myself, I can personally attest to the validity of these two benefits. They have made all the difference in the success of my stores.

Ryan Carlson, director of marketing, WashCard Systems:

There are two reasons to go completely cashless; neither of them benefits the consumer. We have to be clear about why an operator wants to go cashless. The first is security. We’ve got clients who want to eliminate all cash collections from machines because they can’t carry a big enough gun at their store to feel safe. They want to centralize all the money collections into a locked, secure, separate room.

The second one is for an off-site operator, someone who is a “serial” entrepreneur who owns lots of different businesses and the Laundromat is where they’re planning on not spending any time. They hire employees as attendants, and all the attendant does is clean (the store) and educate people on how to use the card technology. You cannot have an unattended store and be 100% cashless; it does not work, period. You use the cashless system for accountability, to eliminate any opportunity for employees to handle money.

Tomorrow: What are some basic questions a laundry owner should ask when considering a cashless store?

To learn more about payment systems:

Card Concepts — laundrycard.com
Dexter Laundry — dexter.com/laundry/products/management/
ESD — esdcard.com
Setomatic Systems — setomatic.com
WashCard — washcard.com