Late Night Idea - CC Discount

[wyatt]

I now have a new location that uses tokens so I am new to the token game. Anyways, people love them because tokens are worth more time than quarters/cc and it's been that way for years. Now it's no secret that people spend more on credit cards vs any other payment type so would it make sense to discount credit cards so they match token value? Would the increase in wash time be enough to warrant the price discount?

My hesitations with the idea:
- More cc fees
- Less "float" money out on lost tokens (people buy tokens, don't use them, and then end up losing them)


Thoughts?

 

[MEP001]

You could vend tokens via a CC swiper, but historically people don't like to do it that way. You might still be able to make that work since the tokens are already there and it's something the customers are used to. Otherwise, I'd be concerned about combining discounted CC with all the fees and the CC equipment maintenance costs, combined with the loss of the bonus from lost tokens.

Does this wash need an attraction like this to beat the competition or to attract customers? Does it already have CC acceptance?

 

[wyatt]

It has CC acceptance already but only accounts for roughly 30% of revenue.

I just wish I knew the exact numbers because if the extra time used with CC heavily outweighed the amount of time people use with quarters or tokens it would make financial sense to encourage CC usage even with a slight discount.

Does anyone have an exact number or % more that CC users use vs traditional?

 

[CarWashBoy]

It has CC acceptance already but only accounts for roughly 30% of revenue.

I just wish I knew the exact numbers because if the extra time used with CC heavily outweighed the amount of time people use with quarters or tokens it would make financial sense to encourage CC usage even with a slight discount.

Does anyone have an exact number or % more that CC users use vs traditional?

 

[CarWashBoy]

Hi.. I ditched all tokens and quarters nearly 5 years ago.. We accept only cash/credit or debit.. about 72% of revenue is cards.. we have bill breaker that dispense 1-5-10 bills. best move I every made.. business increased by 40%.

 

[MEP001]

Does anyone have an exact number or % more that CC users use vs traditional?

I used surveillance video, timer counts and CC reports to calculate once. Over a busy weekend, customers spent close to 50% more per car with cards over cash.

 

[wyatt]

I used surveillance video, timer counts and CC reports to calculate once. Over a busy weekend, customers spent close to 50% more per car with cards over cash.

So it would make sense to discount CC over cash to improve ticket time and overall sales. Or better yet, keep CC prices the same and increase cash prices only.

 

[MEP001]

I don't know why you'd want to do that, aside for trying to attract business, and that seems like a strange way to do it. It's more like you're punishing cash customers. Maybe advertise and run a month-long discount for CC instead?

 

[Sequoia]

So it would make sense to discount CC over cash to improve ticket time and overall sales. Or better yet, keep CC prices the same and increase cash prices only.

Why tie yourself in knots with all these pricing and discount scenarios? Would you consider the simplicity of making cash and CC prices the same? I did that at my wash and am pleased with the results.

Last time I checked, my average wash bay customer using tokens/coins spent an average of $4.50 per wash. In my first month of CC usage (which is now,) my average CC customer has spent $5.95 per wash. That might be a little high because a few people didn't press the STOP button and got charged the $10 max. But even if it comes down a little, the CC "per wash" revenue is much higher.

 

[wyatt]

I have multiple washes that all price CC the same as cash. It has worked fine but I like to think there’s always a better way.

My thinking for example, is if a credit card user spends on average $7.50 and an average cash user only spends $5. If you discount CC 10% the charge would be $6.75 ($6.50 after 4% processing fee). So even after the discount and fee the average extra per customer is $1.50 ($6.50 - $5).

My main point is to get more people to switch to CC so I can cash in on that extra $1.50 per customer.

 

[wyatt]

It's more like you're punishing cash customers. Maybe advertise and run a month-long discount for CC instead?

I would want people to think I’m rewarding them for using CC.

The month long trial is a good idea.

 

[Sequoia]

My thinking for example, is if a credit card user spends on average $7.50 and an average cash user only spends $5. If you discount CC 10% the charge would be $6.75 ($6.50 after 4% processing fee).

When I worked in the software industry, I recall there was a statute on the books that required CC pricing to be the same as cash. I presume even if that is the case, it might not be a problem for some time, if ever. But something to maybe check out.

 

[MEP001]

When I worked in the software industry, I recall there was a statute on the books that required CC pricing to be the same as cash.

IIRC you couldn't charge more for paying by CC than with cash, but that was lifted more than ten years ago.

 

[wyatt]

Wanted to give an update... After 6 months of offering "discounts" for cc use I did transition customers into using them. I was at 30% using them, now I'm over 50%. Hopefully now I can bump up my cc price to match cash and keep that same percentage that uses cc. Total wash revenue was up 17% over this period of time compared to PY.

 

[JMMUSTANG]

I give no discount for credit cards. I have a lot of credit card users.
My cash customers start price is $2.50.
If they pay $5 they get 3 FREE minutes.
Everybody seems to be happy. Never had any issues.

 

[wyatt]

I give no discount for credit cards. I have a lot of credit card users.

I agree, I have 3 other washes where this is the case and most people use cc anyways. However at this location people wouldn’t use cc for whatever reason. Now because of the discount they do.

 

[bert79]

I'm very interested in this discussion. We are 27 sec/quarter with a $2 start for ss and the same time but a $3 start for cc. We set these prices when we opened 2 years ago. Last month we were 37% cc. I wish we would have had the same start price when we opened. I think the price difference scared people away from cc. We are contemplating this idea of discounting the cc (both the start price and offering more time) in order to encourage more cc use. I do think there is something to this. Cc is just soooooo much easier to deal with physically over cash money. We could never go cashless because our customers wouldnt do it.

 

[JMMUSTANG]

Two years ago I changed the minimum start time for credit cards to $4.
Once in a while a new customer will ask why $4 and I tell them with all the fees involved I can’t make money until then. They understand.
I changed the max credit card price from $10 to $9.73 to stop.
So if they did not press the stop button the timer would automatically stop at $9.73
I keep it an odd number in case a customer does not press the stop button so if they look at the bill they figure that’s what they used.
Since changing that I have not had any issues or calls.

 

[OurTown]

I'm very interested in this discussion. We are 27 sec/quarter with a $2 start for ss and the same time but a $3 start for cc. We set these prices when we opened 2 years ago. Last month we were 37% cc. I wish we would have had the same start price when we opened. I think the price difference scared people away from cc. We are contemplating this idea of discounting the cc (both the start price and offering more time) in order to encourage more cc use. I do think there is something to this. Cc is just soooooo much easier to deal with physically over cash money. We could never go cashless because our customers wouldnt do it.

We have the same pricing for now except the same $2 start and time for credit card. We are at only 34% CC in bays and 27% CC on vacs. Are you count up on CC? We are count down but going to count up (bays only) hopefully today if we can get the signs up. (after fixing a bunch of other stuff)

 

[bert79]

We have the same pricing for now except the same $2 start and time for credit card. We are at only 34% CC in bays and 27% CC on vacs. Are you count up on CC? We are count down but going to count up (bays only) hopefully today if we can get the signs up. (after fixing a bunch of other stuff)

We are count up on the CC. I think you will love the change! You WILL make more money and your customers will be happier. We have an IBA as well and I think the cc usage on that is around 40%. We do not have cc on the vacs.