The Death of coins, its coming to a store near you

[Howard]

Even Larry has admitted, although not verbally, that the use of money in his store is dying and that dollar coins and quarters are starting to become nothing but tokens. Sure they are legal US tender, but they act effectively as tokens. How has he admitted this? Well by his actions of course. First by having a change machine, but more importantly by installing an ATM in his store. The latter is further proof that the use of money is declining and will continue to do so. But let me back up and explain the history.

Years ago people brought their change to a Laundromat to use the equipment. First it was dimes, then quarters, and now a few even use the 100 cent coin. As time moved forward many people stopped using change and instead relied on a new machine which accepted their paper money and gave them coins. People used these quarters (or dollar coins) effectively as tokens. They really did not want them but were required to use them to operate the equipment. The use of these coins never meant people liked them – they had no choice but to use them. Sure some stores need to take some of this change to the bank and others have to go to the bank to get more coins, but for the most part if you drew a box around the store very little change either enters or leaves most stores. I know some individual stores are different, but if you drew that box around the entire laundry industry that uses coins you would find it comes out at close to neutral in terms of coin flow.

It’s really not a lot different than casinos that use chips at their gaming table, except that if you have to you can use these laundry coins elsewhere. People have no real desire to use chips at a casino, they would be just as happy and maybe even more so to use real money. The casino makes you convert your money to chips. When you leave (if you have any left – lucky you) most people cash them out. Some people take some home, and may come back at a later date and reuse them. Bottom line is that when you draw a box around a casino and draw a similar box around a Laundromat you really see just about the same thing in terms of the flow of money. The chips in the casino, and the quarters and dollar coins in the Laundromat, are mostly just used inside and there is very little flow of these things into or out of the building.

Today, the customers does not even want to be bothered with carrying the paper money to buy the quarters and dollar coins to start the machines. They rather use their credit and debit card. So the non forward thinking store that does not allow the customer to start the equipment that way forces them to take the credit or debit card and use it in one machine (the ATM) to convert to paper money. They must then go to another machine (the changer) and convert the paper money to metal money. They then have to insert the metal money into yet additional machines to accomplish the ultimate task of laundering their clothing. Wow that was exhausting. Why put customers through this maze? That is why what I think that is called the Spyder system seems to be one of the best methods of assisting our customers ***. You can claim that quarters are the best way to run a store, or that dollar coins are, or even some mix of them. They might be from your perspective, but customers really don’t want to deal with money at all. They would by and large be much better served by just purchasing with their credit or debit cards like they do in almost every other establishment today. Sure there are some, and not very many, people that don’t have cards and that is why that Spyder system is probably the best system out there as it will also accept coins.

FYI – Just read that another traditional cash business is converting to credit cards. The WSJ today reported that last year over half the fares for New York City taxi cabs were paid by credit card. Coins and cash usage is fading fast. Better adapt or die.

*** Disclaimer - I have no financial interest in that product and have never actually used one, it just seems to make a lot of sense from a true customer perspective.


MODERATION TEAM – I don’t intend this to be a coin versus card debate and would urge respondents not to discuss in-house cards and would appreciate moderators moving any post about in-house card systems as that is not what this thread is about. Thanks.

[CanCanCase]

-Case

[Adamski]

Howard,

Only about 1 in 30 customers use the ATM to get money off their debit or credit card to get cash to do their laundry. That leaves 29 in 30 customers who do NOT use the ATM for that purpose but instead take notes or coins out of their purse to do their laundry. Yes, they do convert notes to dollar coins using the changers similiar to customers inserting notes into a VTM to put credits on a laundry card. No surprise there.

As far as comparing government made quarters and dollar coins to privately manufactured casino chips; the two systems could not be more different from each other. The casino chip has zero value outside the casino (kind of like a laundry card) but the quarter and dollar coin has full face value in thousands of businesses and person-to-person transactions throughout the U.S. So I have to disagree with your statement that you can draw a box around a laundromat (generally speaking) because its cashflow is isolated and separated from that of other commerce. That's simply not true by any stretch of the imagination - even your's.

Let's look at what really happens. Some customers bring in coinage from home and use it in our laundromats to do their laundry. Other customers take coinage home from our laundromats after doing their laundry. If I took all the dollar coins in my laundromat today and painted them blue, it wouldn't take long before half the blue coins were gone ... replaced with golden dollar coins. It looks like your "box" has a huge hole in it.

In summary: Adding an ATM does not mean the laundromat has become "card operated". Quarters and dollar coins are not used as tokens and they actually circulate into and out of every laundromat on a daily basis. Coinage is not "dying" and I never said (or implied) that it was dying. In fact, with the new golden dollar coin slowly catching on, our coinage system is becoming stronger every day.

[Howard]

Larry, Larry, Larry, you are a smart guy, its to bad you choose to not be honest with yourself. You know you put the ATM in to make money, and if it was not making money you would take it out. You have there because people have the need for currency because the don't carry it. With much expensive therapy maybe one day you can learn to be honest with yourself. As for your box, you never created it so you really don't know. Try painting them blue and report back to us.

[rbh]

First, while I'm a quarters store, I do agree with Howard that the future is in something like a spyder system. I haven't researched it myself, but will at some point. I think it will take some time for it to settle into something reasonably priced/reasonably fee'd (if that's even a word!).

That said, I'm quite positive Howard doesn't really think coin stores will go away anytime soon....never met him, but his articulate responses to the DC thread tell me he's too smart for that....of course, there's a big difference between decline and death. I suspect, although I may be wrong, that Howard is playing with, just a bit, those who have gone overboard recently in championing the DC and the elimination of the dollar bill.

[Howard]

Ron, you nailed it.

Thanks

[Adamski]

Originally Posted by Howard

Ron, you nailed it.

Howard, Howard, Howard,

So you finally admit that all your recent ranting about dollar coins being tokens in disguise and how the "use of money is dying" and how Spyder Wash is about to surpass coin use in this industry is just so much HOT AIR. Well, I knew that all along and now EVERYONE here knows it. Your credibility soars and dives like that of the leading political candidate.

[Howard]

No Larry, I was just agreeing the inevitable change won't take place by next month

[rbh]

Larry, in all fairness....and I don't have a dog in this hunt....but Howards 'rantings' have, each and every time, been in response to what surely you will agree has been an overly aggressive attempt to advocate for the elimination of the dollar bill (in order to, selfishly, ensure the success of the payment method of DC). I looked back and I can't find a thread Howard started 'going after' the DC....but some of the the threads advocating for the DC for some reason had to be done at the expense of the paper bill, which I think has drawn an appropriate response from Howard amongst others. I'm not trying to carry Howards water here, hell, he does just fine himself. I'm just sayin'......

I guess the moral of the story, to me anyway, is it is ok to advocate for your payment system on its own merits, but when you have to do so at the expense of another payment method that affects others, well, I think its fair to expect a response as such.

I've said many times I respect that you have made your DC store work. But I think you are being less than honest with yourself to think its the answer in more than a small percentage of situations. My market is my market. Yours is yours. And they probably have little in common.

[Adamski]

Originally Posted by rbh

I've said many times I respect that you have made your DC store work. But I think you are being less than honest with yourself to think its the answer in more than a small percentage of situations. My market is my market. Yours is yours. And they probably have little in common.

Ron,

As I've pointed out on many occasions, I recommend DCO for high price leader laundromats. I have never recommended it for ALL laundromats or even MOST laundromats. Like any change, it has to begin somewhere and that somewhere would logically be with those High Price Leaders. After that, other laundromats will see the value of DCO and they will adapt it when they feel ready.

I don't see my market as unique from most markets represented here. I have my share of competitors including Charity laundromats. The biggest difference I see between myself and other High Price Leaders is fortitude and a strong desire to try a new way of doing things. Based on my experience, debit/credit card system viability appears to be years away so what I'm now doing is "cutting edge" enough to suit me and serve my customers today. I'll deal with tomorrow, tomorrow.

As for the elimination of the dollar note, it just makes good sense in so many ways. That's why I support it. I am not concerned about the one-time cost of adapting to the phase out. I am looking at the long-term efficiencies that I, my fellow operators, the banks and the government will gain from the 4 year phase out.