Getting ‘Carded’

By Alex Kane | Aug 27, 2010

Currently there are several different “card systems” for self-service laundries – smart cards, mag-stripe cards, radio frequency ID (RFID) cards, credit cards, online systems, offline systems, etc. And the more choices there are, the more confusing it can be.

I’m going to attempt to cut through this tangled web and simplify the options available to today’s laundry owners.

Offline System

We’ll start with the offline system. This is one of the most inexpensive and simplest card systems. This system typically uses a smart card, which has a small, embedded chip. A smart card makes it possible to read – and write – values directly on the card. This is one of the most important differentiating features of this system. The money is stored directly on the card, and because if this, if a customer loses the card, the money is lost with it.

The advantages of this system are the relatively low hardware cost and simplicity of the system. The card transfer machine doesn’t need to be wired into a master system and the card readers, which are in the laundry equipment, do not need to be wired to a main computer. Once money is stored on the card, it is removed by the equipment card readers as the cycles are activated.

One disadvantage of this system is the cost of the smart cards themselves. With a cost of several dollars each, providing the cards at no cost to the customer can be a challenge. Also, there is no tracking of your customers or the specific usage of the machines.

Online System

Another laundry card system is the online system. This system typically uses magnetic-stripe cards or RFID cards, which contain an account number for a particular customer. In this system, the card identifies the user’s account, but the account information (the money) is stored in a central computer in the store. When a customer swipes his or her card in the card transfer machine, the account number is transmitted back to the central computer, along with any cash value that has been processed by the station. The central computer stores this information. When the corresponding card is swiped in the card reader on the laundry equipment, the account number is again transferred to the central computer. The computer then verifies the money in the account and removes the appropriate amount for the cycle. The card reader then activates the laundry equipment. The important factor of this system is that the money is stored in the central computer. Because the card only contains an account number, if a customer loses his or her card, it is possible to provide that customer with a new card that links to the same main account.

One of the main advantages of the online system is that you can gather more information about your customer base. Since there is now an account for each customer, you can encourage them to provide their personal information. And, of course, having your customers’ names, addresses and especially their e-mail addresses is a very valuable marketing advantage. This will enable you to directly market to and retain your customer base. You can also offer incentives such as “10th wash free,” a free cycle on their birthday or other marketing “freebies.” By tracking customer usage and creating an intensive direct marketing campaign, you can ensure that you are doing the best to keep your valuable customers.

The magnetic-stripe cards are less expensive. This allows you to provide them at little or no cost. Some online systems use an RFID (Radio Frequency Identification) card for account number identification. This allows users to activate their cards by tapping them on a small receiver. As RFID technology continues to mature, the cost on these cards will surely decrease.

Another advantage to an online system is that you can have complete remote access to customer account information, machine usage and auditing of cycles. With the proper machine compatibility, you can also adjust store pricing without even setting foot inside the store. Also, with such a system, you are no longer locked into quarter-increment pricing – you can adjust prices down to the penny.

The online system requires the installation of complete wiring throughout the store, since the card transfer machines and laundry equipment must be hard wired to the central computer. In most cases, the card readers in this system replace the coin drops, thus eliminating the ability to accept coins. These systems generally include at least two card transfer machines so that, if one machine fails, another is still available to allow customers to add money to their cards.

Direct Credit Card System

One of the newest developments is the direct credit card system. In my opinion, this is one of the most exciting developments in the self-service laundry industry in many years. With this system, credit card readers are placed directly on the laundry equipment, without replacing the coin drops (so customers can still use coins to activate the equipment). Customers can then swipe the credit cards they already have (and use in most other consumer businesses) to activate the machines. In most cases, the credit card readers are connected to a main computer in the store, via an encrypted wireless system. This makes the system much easier to install.

Other advantages of such a system include the following:

• It is comfortable for customers to use and understand because it’s just like using a credit card at a gas pump.

• Customers don’t have to purchase separate cards and put funds on those cards.

• Customers can use credit rather than their cash.

• The system allows for remote access and monitoring of the system on any Internet browser.

• The money is automatically deposited in your bank account each night, reducing collection costs.

Some of these systems even provide for an online system optional add-on, which allows the use of magnetic-stripe cards as outlined above. This allows you to add the marketing features that the online system provides.

The direct credit card system is not inexpensive. As with most leading edge technology, the cost of entry is high for early adopters. However, you don’t have to convert your entire store at once – you can add readers over time. I would suggest doing a few machines in your store to see how the system works for you.

If you’ve read my previous articles, you know that I am a firm believer in researching and comparing the ongoing costs associated with any operation. This is no different. There are methods to combine the individual cycles into a single (larger) transaction to keep these costs to a minimum. Also, this system works in conjunction with credit card processors. Make sure that you understand and compare all of the ongoing fees.

Laundry card systems are an exciting new add-on to your laundry that, when set up and used properly, can provide a great convenience for your customers. In addition, the marketing advantages will allow you to gain new customers and maintain your existing ones.