Credit Card Usage Update

[bigleo48]

... cash is the better fit for our specific self serve smaller transactions.

mike walsh www.kingkoin.com

Based on what? If you don't want CC acceptors...that's fine. But I know if you do, you are limiting usage and so the full potential of you business by limiting ways people can pay. This is not conjecture or just my way of seeing it...it has been proven time an again and has proven out in my experience.

Back to the OP, its too short a time period as you need to change their habits. That's it...nothing more.

 

[mmurra]

Pretty soon Google Wallet will be able to handle transactions via cell phone proximity (smilar to blue tooth?). You will not need swipes on vacs, etc. Just a small block? Something like that.

 

[mjwalsh]

More than one way to add convenience

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!

I appreciate DCalhoun sharing on this fairly & honestly gathered information based on a reasonable time frame & efforts. It is helpful for those of us who are trying to take care of other inconvenience issues such as the nuisance of our coin customers putting in 4 times as many coins than those customers would have to. Which is partially caused by mainly higher cost per transaction non self service operators ... working against proper availability of dollar coins in our dear USA.

mike

 

[cdreed06]

With all due respect Mike, the inconvenience of depositing 4 times the number of coins than they would have to is nothing compared to the inconvenience of walking around at the site, swiping the card, getting cash, going to the changer and getting change and then depositing coins in the bay. I really don't understand why you work so hard against the inbay acceptors. I really do say this with all due respect, you have been at this a lot longer than I have but the train has already left the station. CC acceptors honestly are an asset to our business.

 

[Earl Weiss]

What % of the following don't take CC?:

SS Gas stations.

IBA Washes

Auto attendant Tunnel washes

The SS wash business is different because...?

 

[PaulLovesJamie]

The SS wash business is different because...?

Lower gross receipts
Lower transaction volume
Lower transaction values
Lower incidence of attendants

These are many of the same things that drive up the rates for smaller businesses. The reason they raise the rates is the increased risk...

Not to mention that equipment cost / revenue is higher and other follow-ons to the few items I listed.

I'm not anti-credit card, never have been. Just agreeing with the OP that for my wash in my market adding CC was NOT a profitable no brainer, it is costing me money. Necessary? Depends on your perspective & business strategy but definitely NOT a no brainer as many of you are stating/implying.

 

[PaulLovesJamie]

Back to the OP, its too short a time period as you need to change their habits. That's it...nothing more.

Serious question: How long? I'm coming up on 3 years and have virtually the same experience as the OP. Yes I'm seeing a minor shift - 3 or 4% - from cash to CC in the last few months, but that could be a blip.

 

[PaulLovesJamie]

Point 3. Depends on age and size of transactions. But over say 18, they prefer to use credit. Get points, budget and insurance. My daughter (in College) purchased a iPhone5 a couple of weeks ago. She dropped it and cracked the screen. CC insurance paid to have it fixed ($230)! Do you think she'll buy anything cash again...not likely. My son gets gas cards from points of our CC...about $1200/yrs worth...pays for his gas because we run all business purchases through our cards. Yet many still pay cash and will till there's a generation shift.

I think you just agreed with me - larger transactions CC gives a benefit.
I reconfirmed with my sons. Both instantly said cash is king, they only use CC for gas, larger purchases, and online purchases. The vast majority of smaller transactions they use cash, as do all their friends. My younger son actually whipped out his wallet and fanned bills in front of his face, said "a picture is worth a 1000 words..." I asked if any of their friends use CC at our wash, they said nope, too easy to spend too much money.

Maybe its a difference between city folk and country folk

 

[mjwalsh]

The SS wash business is different because...?

Number of receptacles required. There are a lot of car washes combined with laundromats which makes the # of required CC receptacles many more. Like I said ... I was not going to take the time to post on this thread but I felt that DCalhoun & PaulLovesJamie gave some balance to the ones who keep encouraging the misleading "all blue sky" of extending all transactions in the USA to CC &/or other costly merchant fee types of transactions. Intentionally or unintentionally supporting government policy that discourages a more convenience coin use is what I have been shedding light on .... not against those who see & have found that CC has been & continues to be better for every piece of equipment on their specific properties. Time will tell, but with all due respect ... I think some of you are shooting yourselves in the foot because the weaker the cash option becomes the less likely the CC conglomerates will feel any healthy tension to keep the merchant fees as low as possible. Sure they have some competition among themselves but the elimination of cash as a strong competitor does not help to keep your merchant fee cost down in my opinion. There are plenty of examples in history where some alternatives to whatever was discouraged & was not as good in the end for the general public. Plenty of people come prepared with cash, so the argument that all or even a high percentage of customers have to seek it out walking away from the bay ... has been much exaggerated.

mike walsh http://kingkoin.com/USA_Deficit_Reduction.html

 

[PaulLovesJamie]

Why do I want to get rid of cash. Its a pain. Heavy, dirty and costly (coin mechs, change machines, vac it up, bill acceptors, coin changes, sorting machines, safes, security, counterfeit, fraud, etc etc etc). I'd be happy just to collect the cash directly in my bank account. And for me personally, it makes it more difficult to run the carwash remotely for long periods of time.

Bigleo, just for the record I'm not trying to be argumentative, this is an important issue & I appreciate your thoughts. If I didnt respect the opinions of all you guys here I wouldnt waste my time posting.

But let me have some fun with your statement by changing a word. I'll do it as though they were your quotes:

Why do I want to get rid of Vacuums? Its a pain. Heavy, dirty and costly ...... it makes it more difficult to run the carwash remotely for long periods of time.

Why do I want to get rid of trash cans? Its a pain. Heavy, dirty and costly ...... it makes it more difficult to run the carwash remotely for long periods of time.

Why do I want to get rid of all dirt in my bays? Its a pain. Heavy, dirty and costly ...... it makes it more difficult to run the carwash remotely for long periods of time.

Yes I understand CC solves some of those problems. But it brings its own set of problems - expense, loss of privacy, some loss of control, CC fraud and chargebacks to name a few.

Just saying, chosen medium of exchange is a business decision that should be evaluated, not blindly followed, and it will not be the same result for everybody. Too much rhetoric, not enough data and dialectic.

 

[PaulLovesJamie]

What % of the following don't take CC?:
SS Gas stations.
IBA Washes
Auto attendant Tunnel washes
The SS wash business is different because...?

Earl, serious question that might help illuminate my perspective: do you have CC on each and every one of your drop shelf vendors? I'll assume you do not, and ask:
why not?

 

[PaulLovesJamie]

crap this is more than I've posted in 20 years, what the heck came over me???

 

[I.B. Washincars]

Oh you had to come in here and throw your common sense around...show-off

 

[Earl Weiss]

Lower gross receipts
Lower transaction volume
Lower transaction values
Lower incidence of attendants

These are many of the same things that drive up the rates for smaller businesses. The reason they raise the rates is the increased risk...

Not to mention that equipment cost / revenue is higher and other follow-ons to the few items I listed.

I'm not anti-credit card, never have been. Just agreeing with the OP that for my wash in my market adding CC was NOT a profitable no brainer, it is costing me money. Necessary? Depends on your perspective & business strategy but definitely NOT a no brainer as many of you are stating/implying.

And per MJ - Number of receptacles.

Lets see:

Transaction volume yes. Why does this make a differemce. Is the fixed monthly cost really an issue? I thought it as only the per ransaction cost.

Lower transaction values? Why does it matter? Net profit effect per transaction is lower. Lets look at Gasoline $4.00 gallon with 25 Cent Gross margin. 10 Gallons is $40.00. The CC cost eats into the margin based on overall price so it really has a more negative effect. Yet it's still prevailing.

Lower incidence of attendants. Not sure this is true, how or why it matters.

Number of receptacles. Not sure this is true either. Each gas dispenser has a receptacle plus typicaly one in store.

 

[Earl Weiss]

Earl, serious question that might help illuminate my perspective: do you have CC on each and every one of your drop shelf vendors? I'll assume you do not, and ask:
why not?

If I had electricity to them it might be an option.

 

[cdreed06]

I'm not against cash, never have been never will be. I am FOR accepting any way someone wants to pay me. If they want to pay me with cash, CC, Paypal or whatever I want to make it easy for them to do it. If they want to pay me in dollar coins, super. If they have to walk around my lot and use 2 different machines to be able to put the coins in another machine to wash that just doesn't make sense to me. I'm not trying to be difficult. It just works for us.

 

[JMMUSTANG]

If your competition doesn't have C.C. and you don't feel your customers would like to have the convenience of having multiple options to pay for your services then don't put C.C. at your wash.
Just hope that your competition doesn't decide to put in C.C. before you.
I've had C.C. since 2001 and can tell you that my averages are between 18-28% per month year in and year out.
Have they helped increase my business is hard to say being that we have had the worst business enviroment since 2008.
All I can say is that many customers love the idea of using the C.C.
It is nice too when for whatever reason my quarter or bill acceptor in the bay is not working and the customer can use the C.C.

 

[JGinther]

From a cost point of view, no one would take credit cards - duh. From an income perspective and competitive perspective, everyone would take credit cards - duh. So businesses that are focused on their costs will choose not to accept them, and businesses that are focused on their income will. So, which type of business are you? Further which type of business usually prevails? Hmmm...

 

[Earl Weiss]

From a cost point of view, no one would take credit cards - duh. From an income perspective and competitive perspective, everyone would take credit cards - duh. So businesses that are focused on their costs will choose not to accept them, and businesses that are focused on their income will. So, which type of business are you? Further which type of business usually prevails? Hmmm...

There is another reason - outside of cost that businesses don't take CC. It has to do with reporting income.

 

[mjwalsh]

There is another reason - outside of cost that businesses don't take CC. It has to do with reporting income.

Earl,

I think I see what you mean ... businesses reporting extraordinarily high proportion of CC to cash ... could get flagged. I personally would not wish that on my worst enemy to have to suffer through too many audits by too many government agencies.

I see another reason to have cash ... are you sure that our better "keep the change" customers who have the ability to put 5s & 10s in our bill acceptors with even more convenience aren't spending at least 15-25% more than they otherwise would spend including some who also have credit cards??? I understand where the 100% cashless car wash proponents are coming from in terms of their management style of loads of loyalty card types of marketing etc. Many of us ... especially in more rural areas do not see that style of marketing to be ... in the final analysis ... that helpful to us or our customers.

mike walsh http://www.kingkoin.com/USA_Deficit_Reduction.html