Credit Card Usage Update

[Dcalhoun]

We installed Cryptopay credit card system in one self serve bay and our dog wash a little over a year ago (Feb 2013). I thought it might be helpful to share my results for the first year. Some pertinent facts: Our city population is about 35,000, we are the only car wash with CC acceptance in ss bay among 5 IBA/SS washes in town, we did promote CC acceptance on radio and on site.

Revenue for both the ss bays and the dog wash was flat year to year. SS customers migrated slightly from bay without CC to the bay with. Overall, about 25% of sales are CC. (Compared to 60% cc at automatic bay) Final result: Visa gets richer, I give up profit to them. In the end, we have not seen any increase in time being spent in the bay or dog wash. So, 25% of my cash customers have converted to CC but it has not resulted in greater income for me.

Basically, all the conventional wisdom has not come to pass at our wash in central Illinois concerning how we need to add credit card acceptance.

Food for thought. Happy washing everyone!

 

[MEP001]

Have you estimated the amount spent per car with cash vs. credit in the self-serve bays? I did a car count against gross income and determined that our customers spend about 20% more with credit.

In the auto, cash sales are about about 40% the top wash package and the rest spread among the other three. With credit, about 75% purchase the premium wash.

 

[JGinther]

Basically, all the conventional wisdom has not come to pass at our wash in central Illinois concerning how we need to add credit card acceptance.

How do you know you wouldn't have been down this year if weren't for your credit card addition?

 

[jimbeaux]

We installed Cryptopay credit card system in one self serve bay and our dog wash a little over a year ago (Feb 2013). I thought it might be helpful to share my results for the first year. Some pertinent facts: Our city population is about 35,000, we are the only car wash with CC acceptance in ss bay among 5 IBA/SS washes in town, we did promote CC acceptance on radio and on site.

Revenue for both the ss bays and the dog wash was flat year to year. SS customers migrated slightly from bay without CC to the bay with. Overall, about 25% of sales are CC. (Compared to 60% cc at automatic bay) Final result: Visa gets richer, I give up profit to them. In the end, we have not seen any increase in time being spent in the bay or dog wash. So, 25% of my cash customers have converted to CC but it has not resulted in greater income for me.

Basically, all the conventional wisdom has not come to pass at our wash in central Illinois concerning how we need to add credit card acceptance.

Food for thought. Happy washing everyone!

Thanks for sharing your real world experience. I have been struggling whether to put cc acceptors in some of my bays and wondering if the return on investment would be worth it.

 

[robert roman]

“We installed…..credit card system in one self serve bay and our dog wash…. Overall, about 25% of sales are CC….Compared to 60% cc at automatic bay….”

Typically, failure to get results can be attributed to poor planning, implementation and/or execution.

For example, purpose of credit card acceptance is to make a business more attractive and convenient for consumers.

Using profit and loss as a reference point, the framing of a new venture like adding card acceptance should be part of an overall strategy to increase sales volume and/or increase average sales so the improvement can produce a return on investment.

For example, many card systems are tied to customer loyalty program that is designed to get customers to visit more often and/or spend more per visit.

Today, many carwash operations are around 25 to 30 percent cash. Consequently, and will all due respect, I don’t believe that all the conventional wisdom has been applied.

For example, did you promote online or educate through social media? Also, having only one bay means people have to wait when it’s being used.

And so forth.

 

[BBE]

Are you doing count up or count down? Customers will spend more with count up.

 

[Dcalhoun]

@MEP001 - I did not try to estimate the difference in time purchased with cash or credit. Our cameras do not allow me a means to monitor which customer uses cash and which use CC. Also, trying to figure out when they are buying time or just in the bay is too difficult to arrive at anything near accurate. I have not analyzed the auto wash package decision based on form of payment. I look at it in the sense 'it is what it is' and what would I do different if I knew the information. Perhaps there is great insight to be ascertained that I am just not thinking of.

@JGinther - good question concerning maybe the credit card acceptance kept our numbers up. I believe this is not the case simply because all other revenue streams were flat. Our total revenue in 2013 was within $1,000 of total revenue in 2012. Some revenue streams up a tad, some down a tad - no significant changes anywhere.

@Robert Roman - The Midwest markets seem to defy the conventional wisdom that is puked out of the coasts. Our people are not slave to social media and many businesses here are abandoning all the hype and resources they had poured into it. Quite frankly, social media does not seem to be king here. We did promote the cc conversion quite heavily and even made mention of the benefits to customers who were walking to and from the bill changers. At the top of our 'educating customers' heap was that we are the only wash in town offering cc in the ss bays. It is a rare occasion that a customer is waiting just to use the cc bay, but it does happen. Marketers are quick to throw out internet presence and social media promotion but they kick the dirt and stutter a lot when asked about empirical data to support their claims.

@BBE - we are doing count up

Thanks everyone!

 

[PaulLovesJamie]

...the conventional wisdom has not come to pass at our wash in central Illinois concerning how we need to add credit card acceptance.

I call it the "current sales pitch," I dont find what you're referring to as "conventional wisdom."
Also food for thought

 

[Waxman]

Since your credit card system is a long-term investment, why not give it more time and keep trying.

Your attitude about your investment seems negative based on only 1 criteria; flat sales year over year.

If you want to make more money, try raising your price.

If you are the only wash with CC acceptance in SS bays, tout that as well as other spiffs you give customers like free towel dry, rich soaps, good show and scent.

Sometimes it takes customers awhile to see your changes. Heck, we have been here since 1996 and still get customers who are here for the first time and never knew what we did here. BTW; we advertise on radio in newspapers on Facebook, etc.

I think you should relax and change your attitude around and charge a bit more if you want to see revenues increase more.

 

[MEP001]

@MEP001 - I did not try to estimate the difference in time purchased with cash or credit. Our cameras do not allow me a means to monitor which customer uses cash and which use CC. Also, trying to figure out when they are buying time or just in the bay is too difficult to arrive at anything near accurate. I have not analyzed the auto wash package decision based on form of payment. I look at it in the sense 'it is what it is' and what would I do different if I knew the information. Perhaps there is great insight to be ascertained that I am just not thinking of.

I used the surveillance video to count only the cars that washed - I read the numbers at a particular date and time, then checked them again a day later and watched the video between the two times.

 

[bigleo48]

Dcalhoun,

I would not call your results anything but anecdotal. First, your time frame is too short and second, you don't really keep track of different usage. Finally, only some of your services have it so its not universal (personally I don't like that).

I have installed CC acceptance in my SS bays and Petwashes about 4 years ago. First year was low to very low usage. I have a WashPay system that allows me to count and report all sales (cash, CC & accounts). I can tell you that my CC usage is now at 20% and climbing every year. I can also tell you that my CC users spend almost 40% more.

I see some businesses that do not take CC in my area. It makes me shake my head! Why create obstacles for payment? Sure you have to pay a percentage to the CC companies, but they also take the risks and you don't have to handle money. So worth it IMHO.

Big

 

[mmurra]

Big Leo, you rock, as always! You hit the nail on the head; What are the legitimate options to credit card acceptance in the world today? Do we think that young people are in love with Pre-Roman metal units? Coins are useless. Paper currency is out of favor. They all use credit cards. They expect to be able to use credit cards. We do not set the rules. The customer does. Our carwash went from -0- use over 15 years ago to over 60% of gross sales by credit/debit, today. Do I like paying the rediculous fees? NO! I do not make the market. I just make the system as convenient to my customers as possible and they reward that convenience with more business. Period. Set prices accoridingly. Please keep the card system and it will pay you back in the long run. Mark

 

[Earl Weiss]

I am in a Chicago suburb. Last time I checked that was in the Midwest. Installed Cryptopay in 4 of 8 bays three years ago. After a year I put it in the other 4 bays. Usage increae was slow but steady. A few good months paid for the system.

 

[PaulLovesJamie]

Please help me understand - are you guys saying that
a) CC increases profits at a SSCW
or
b) CC acceptance is a necessary cost of doing business at a SSCW

I put it firmly in "B", and I think that was the point of dcalhoun's original post, that it is b, not a. So yeah, barring significant market differences I disagree with most of the responses. Except Earl's of course - I too consider Chicago to be midwest.

 

[Dcalhoun]

I am not depressed over the result. It is exactly what I expected but was hoping wouldn't happen. My point is the conventional wisdom concerning credit card acceptance has not proven to be valid - at least not in my neck of the woods. One of the great promises of cc acceptance is increased revenue because everyone would spend more time in the bay since they weren't counting quarters and so on. The whole point is to increase revenue - if that doesn't happen then it is a failed investment. We are led to believe that customers are just chomping at the bit to pull out their credit card and spend more money at our car washes. Further, if we didn't do it our competitors will and in so doing lure all of our customers to them.

My only point is that things haven't turned out this way - at least not yet. I really struggled with installing cc acceptance - not that it was a major investment (because it wasn't), but rather because I wasn't interested in giving up more profit to VISA and my customers weren't asking for it. I wanted to get the competitors customers and was hoping cc acceptance might be the hook to catch them. But, cultural changes arrive a little slower in the Midwest so the day may come when it all works out as planned.

 

[Dcalhoun]

Big Leo, do you have cc acceptance with vacs and vending too? These are the only areas we don't accept CC's and I am having a hard time with justifying the cost for a 75 cent vac cycle or a $1 Armor All pad especially since people aren't asking for it. In our area, we are starting to see candy and snack vendors with cc now in some of the break rooms of larger employers and some of the local hospitals but not yet on the streets.

 

[Earl Weiss]

Please help me understand - are you guys saying that
a) CC increases profits at a SSCW
or
b) CC acceptance is a necessary cost of doing business at a SSCW

.

IMO all of the above. No way I can substantiate that CC use was not just a switch from money. I really think that CC users would not spend less than cash users and the extra is at least enough (but more than likely a lot more than enough) to pay the extra transaction cost and equipment cost.

 

[bighead]

My experience and opinion are the same as Earl.

I added CC acceptance to one bay (I have the DAN system)... ran it for a year, then looked at the numbers. Then I installed one in the other bay as well as my dog wash. When I rehabbed my other wash, I didn't even think about it.

IMO: more and more people are using debit and credit, and you are going to alienate them if you don't adapt. Besides, IMNSHO, its a better experience to wash your car and hit a button and be charged for whatever time you use (count up) vs. constantly racing against the buzzer trying to beat the timer. I tell the customers, when that timer is beaper and you take the time to add more quarters, you are actually paying me to add those quarters. They get it, and thats why alot have switched to CC use.

 

[bigleo48]

Big Leo, do you have cc acceptance with vacs and vending too? These are the only areas we don't accept CC's and I am having a hard time with justifying the cost for a 75 cent vac cycle or a $1 Armor All pad especially since people aren't asking for it. In our area, we are starting to see candy and snack vendors with cc now in some of the break rooms of larger employers and some of the local hospitals but not yet on the streets.

No...Unitec doesn't offer it yet and I'm in Canada so Cryptopay doesn't support us yet.

 

[bigleo48]

I really struggled with installing cc acceptance - not that it was a major investment (because it wasn't), but rather because I wasn't interested in giving up more profit to VISA and my customers weren't asking for it. I wanted to get the competitors customers and was hoping cc acceptance might be the hook to catch them. But, cultural changes arrive a little slower in the Midwest so the day may come when it all works out as planned.

First, I think you are not taking into consideration the costs involved with handling cash. From coin & Bill acceptors, change machines, trips to the bank, bank handling charges, security, counterfeit, loss of biz, less usage, etc. I think if you could come up with a figure on these expenses, you wouldn't feel that way. I would love to turn my wash to a CC site only.

Also, I am not from the midwest, but I think what you are seeing is likely average. Gotta give it more time as you are changing long established habits (coin washes have always used coins...go figure). I have my card machines front and center...when customers have problems with change, I show them the CC option "swipe, wash & press stop...that easy. no messing with coins, beepers, same price and you make points!" I am always surprised how many people haven't even noticed it!