Just another SS Credit Card Usage Post

[Greg Pack]

I know we have participated in many of these in the past. I must confess I'm one of those guys that rarely looks at his Merchant statement unless something is wrong. In an effort to run a more profitable business i'm making myself again pay more attention to the "numbers" side of the business. So I'm devoting an entire four hours a week to that.

Having said that, I just reviewed my TSYS Statement for the Etowah valley System for the first nine months of 2014, and was quite surprised at what I saw. Here are the details

Wash is located in an upper-middle class community. IBAs are my bread and butter on this site, contributing to the lion's share of the site income. Current SS price is $2.00 for 3:30. Credit card is programmed to count up, The customer selects stop on the rotary dial when they have used the amount of time they want to.

Wanna guess what my average credit card charge is? It's a whopping $3.15

In addition, Merchant fees average 11 percent, netting me an average of 2.81 per transaction

I could understand a low average if I was set up for 2.00/swipe, but I was very disappointed in these numbers. I've seen other operators talk about 5 dollar averages.

Is it possible my debit/credit customers are actually spending less than my cash customers?


I'm definitely going to change pricing- I can't decide whether to go 2.50/four minutes PLUS a convenience fee of .25 for card users, or just go to $3.00 for five minutes for everyone. I'm leaning towards the former after number crunching.

Any operator input is appreciated

 

[PaulLovesJamie]

I'm a little surprised to hear such a low average for count up.
My start price for CC is $5 (count down), $2.50 for cash/token customers. This difference in start prices has caused a small amount of confusion... a very small amount I think. But Ive noticed it, so it concerns me. I'm considering changing to a $3 startup for both cash & CC, and tacking on that convenience fee for CC. Not sure, but I dont like having 2 different start prices.

edit: meant to mention, my cc average is around $6.50, I'd have to check for the exact #.

 

[BBE]

That seems really odd to me, especially with count up. Something doesn't seem right about those numbers.

I recently kept the same price on my self serves but decreased the amount of time given, and my count up credit card average went up to almost 8 dollars.

I know this sounds really obvious, but are you sure your credit card system is set up to charge at the same rate as your cash? When I did my time decrease, I had to go through my credit card settings and change the cents per minute amount charged to match up with what I was now giving my cash customers. If you truly are only getting a 3 dollar average off of count up, then maybe at your location you would be better off doing a 5.00 per swipe count down.

 

[GoBuckeyes]

"In addition, Merchant fees average 11 percent, netting me an average of 2.81 per transaction"

Hmmmm, that 11% wouldn't be out of line at all if you had BluePay. I just switched to TSYS for all my automatics and couldn't be happier. My percentage for my slowest wash it's first full month was 3.6% off the top of my head. All the others were less. Based on that, I just ordered my programming card from TSYS to do my self-serve bays. If they come in at 11% I'm going to be hot!

You said your Autos make up the bulk of your business at this wash. Are they with TSYS as well? What fee percentage are they running? Do the autos and the bays come on different statements?

Thanks

 

[sparkey]

I have Etowah Valley credit card readers with TSYS in my selfserve bays. I have a $3 minimum. I switched from count up to count down about 5 months ago because its suppose to be cheaper to count down due to their system double authorizing in the count up mode. If I look at the total I paid TSYS compared to my income for the last 13 months I arrive at 16% fees to the credit card company. Of course this includes the extra fees like the PCI compliance fee. If I drop the month with the PCI compliance fee it is running 12.6%. This is actually a savings from when I had bluepay. If I had it to do over again, I wouldn't have spent the money to add credit card readers to the selfserve bays.

 

[MEP001]

cfcw, what system do you run? Does it have a push-to-stop button? I used to see a lot of customers swipe their card and immediately press the stop button before I rigged it up to end the transaction when stop was selected on the switch.

 

[robert roman]

“….on to the "numbers" side of the business…I'm devoting an entire four hours a week to that.”

If so, consider those hours where it counts most.

For example, what is more important – paying 11 percent merchant fee or having customers go elsewhere because plastic payment isn’t available?

Wand is similar to coin-op laundry business - key metric is turns per day.

What is more important – getting more customers who use more turns on average or getting two or three times as many customers who use far less turns on average?

“IBAs are my bread and butter on this site, contributing to the lion's share of the site income.”

Well it should because over 70 percent of total available market is automatic washing.

Consequently, except for rural areas, most markets have opportunity to convert 30 percent or more of existing wand users to automatic washing.

What generates greater net profit per vehicle – wand or in-bay?

 

[Greg Pack]

MEP, I have a rotary switch so the customer must select stop on the dial to halt the process. So the customer has to make a conscious decision to stop washing. I should tell you guys I have virtually no signage,and the only way a person knows how much they purchased is by stopping the process. It is then that the terminal displays the amount of the purchase. Perhaps that is causing some people to stop prematurely in fear of an excessive charge. I would prefer the purchase amount displayed instead of the time. Is that possible with that system?

Maybe I am mistaken, but to arrive at that number I just divided total revenue by number of transactions as reported on my merchant statement. In September it was 647 reported transactions with revenue of 2100.50 which comes out to 3.25 per transaction. Merchant fees were 209.88, or 9.9% Cash still accounts for most of the purchases on the SS side.

I assume SS transaction have a much higher percentage of transaction fees just because of the lower ticket average and fixed swipe fees. By forcing CC customers to pay a higher purchase price I should reduce fees as a percentage of sales slightly. My auto merchant fees are averaging around 5-5.5%.

Robert, by putting in automatics that actually do a decent job cleaning about eight years ago I have already converted many SS customers over. Looking at my wash prices and average per customer it looks like my best source of increased revenue on the site is going up on Auto prices. I am currently 5,7,8&10 dollars and my average CC purchase was over $9 in September

 

[Greg Pack]

BTW

current price 2.00/3:30
If I go to 2.50 for 4:00 minutes that is a 6.25% increase in price per minute
If I go to 3.00 for 5:00 that is a 5.4% increase in price per minute

the first option with swipe fee is more profitable and perhaps more palatable for the customer

 

[washme1]

My average cc sale in SS with Crytopay is exactly $7.00 for the past 30 days which is consistent with what I've been experiencing. I'm at $2 start for 3 min 36 sec.

 

[Greg Pack]

I think I'm going to work on some signage, go up on base price to 2.50, and add a (in)convenience fee. I'll try to remember to let you guys know how that changes things.

 

[mmurra]

Several of us have gotten TSYS down to a much lower rate that what is being reported here. You must be willing to work at this. Check around for other rates (Costco is great). Contact TSYS and ask for a "rate review" and insist on a better rate or you will leave them. You have the best ammo if you have a written rate review and offer from another vendor (Costco is great). Do not stop working at it as these are dollars you are pouring down the drain, in terms of paying too much for what you need (and you do need debit/credit clearing). Good luck! Mark

 

[Greg Pack]

Thanks Mark. Can Costco actually serve as the processor any of carwash equipment?