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