Secure tokens and their cost is increasing per token

[copperglobe]

For many years we've been vending in our bill changers high security tokens from IDX. Each token has a value at the washes of $1.00. Wondering about what we'll do when the cost to purchase those tokens reaches $1. Other token companies have high security tokens (Van Brook, Hoffman, etc) but we've never gone with those. What is your source for those high security tokens and what are your plans as the cost for those tokens reaches $1?

 

[Randy]

How long have you been using the IDX coded tokens? Are you using the IDX X-10 coin acceptor? You might be able to find a token that will cross over. Contact Dottie at Van Brook and see what she can do for you. Good quality tokens are expensive. There are only 3 real players in the car wash token business, Van Brook, Osborne Coin (they make the IDX token) and Hoffman and Hoffman. It’s kind of hard to change tokens once you get 10,000 or 20,000 of them out in the field, been there and done that. I have a customer who values his tokens at $2.50, gives 4 minutes of time for $2.50. He vends them out of his changer at 2 for $5 or 4 for $10 and gives 9, 1 extra for a $20. Now his problem is how does he raise his prices. The only thing he can do is lower his time and he’s not too keen about doing that. I don’t plan on being in the car wash business when the price of tokens hit a $1.00 apiece.

 

[copperglobe]

Randy, thanks for the reply. We're using the X-10 acceptor with the IDX high security tokens for about 20 years and have about 25,000 of those out there in circulation. My last order from IDX I paid $.65 per token. Once they get closer to $1 each I'm in trouble. My thoughts are that maybe I should now be switching over to Van Brook now and, over time, the IDX will disappear. Van Brook, on their site, quote $.31 for the high security CT tokens which is half what I'm currently paying through IDX. Like you said, I hope that that day never comes when they cost me $1 to replace. I'll give Van Brook a call and talk things over with them about their tokens and my X-10 acceptors. Thanks again.

 

[JMMUSTANG]

I did a quick check on EBay looking for IDX coded tokens and came up with some possible hits for you.
Check it out.

 

[mjwalsh]

I did a quick check on EBay looking for IDX coded tokens and came up with some possible hits for you.
Check it out.

With the Ebay approach .... could there be a re-code issue to match copperglobe's existing IDX coded tokens?

 

[copperglobe]

mjwalsh, there is an issue with the ebay approach although thanks to jmmustang for telling me to go look on ebay as I found a couple other car wash things I just bought...cheap. The IDX tokens have to match the metal and the "swirl" on the token. Those that are on ebay currently aren't a match for what I'm using. Although, somebody is selling each IDX token there, at least they've got them "for sale", for $9.95 each as a collector item. I'll sell you all you want for $9.95 each out of my "collection".

 

[mjwalsh]

mjwalsh, there is an issue with the ebay approach although thanks to jmmustang for telling me to go look on ebay as I found a couple other car wash things I just bought...cheap. The IDX tokens have to match the metal and the "swirl" on the token. Those that are on ebay currently aren't a match for what I'm using. Although, somebody is selling each IDX token there, at least they've got them "for sale", for $9.95 each as a collector item. I'll sell you all you want for $9.95 each out of my "collection".

copperglobe, jmmustang, & others,

Just a thought ... I wonder if IDX has a way of reprogramming the X10 acceptors so the secure tokens from both a large bulk from Ebay & your large bulk will work. Of course the cost would have to be more in line & practical.

Depending on your theft-vandalism danger ... most of us dollar coin dispensing operators would lean more in the direction of $1 coin & even a potential future $2 & $5 coin actual legal tender.

In the case of our Canadian friends they will have $5 coins coming in 2017: http://www.mint.ca/store/news/royal...0002&parentnId=600004&nodeGroup=#.WE8sYLIrJaQ

mike walsh www.kingkoin.com

 

[washnvac]

I use Dottie at Van Brook/ Osborne. I pay about 20 cents delivered. That 65 cents is outrageous! I order about 15k tokens every 18 months. I have a 100 mile protected radius around my five washes that they will not sell the same metal content token.

 

[Earl Weiss]

I am not a token user but it would seem you would lose money on the walk off but it would still have a value of greter than $1.00 on the re use. You sell it for a dollar but how many times do you re sell the same token before it walks off? I f you re sell it 10 time s an d it walks off on the 11th didn't it cot you 10 cents? What am I missing?

 

[MEP001]

I am not a token user but it would seem you would lose money on the walk off but it would still have a value of greter than $1.00 on the re use. You sell it for a dollar but how many times do you re sell the same token before it walks off? I f you re sell it 10 time s an d it walks off on the 11th didn't it cot you 10 cents? What am I missing?

If the token costs face value to purchase, it's already the same as using currency coins. We re-use quarters in a changer and reselling them doesn't count toward income.

 

[Earl Weiss]

If the token costs face value to purchase, it's already the same as using currency coins. We re-use quarters in a changer and reselling them doesn't count toward income.

Yes and no. Are you really "Selling Tokens". I know the walk off value is an added value. But what you are really selling is a means to access your service. I have changers that transforn paper into coins that can be used elsewhere. So that is different than a token only useable at my location. I guess my point is you are dispensing a means to access your sales and you need to look at the overall cost / benefit. Again, if you "Sell" a $1.00 cost token worth $1.00 in sales to you each time it's used 10 times that is $10.00 in sales. You have the same gross margin whether the token cost you 10 cents or a dollar. Now, if it walks off the 11th time you still broke even at the dollar cost level. If it cost $1.10 that 10 cent loss eats into the average gross margin times X uses per token before it walks off. Allocate the .10 for an average of 10 uses and that is a margin loss of 1 cent per use.

 

[2Biz]

I see the OP's reasoning...Hypothetically....If a token costs $1.25...And you're dispensing it for $1.00 in hopes it doesn't walk off and you'll be able to reuse it an infinite amount of times....If you have 1000 walk off in a year...You lost $250.00, no matter how you slice it...At that point you would either have to eat the loss or raise prices to cover the added cost of doing business...Just like how water and sewage is figured into the equation.

 

[copperglobe]

Having tokens walk off is a loss to my bottom line. It's like someone walking off with my foam brush. No matter how many times that particular foam brush was used I still am required to replace that foam brush with a new one. The cost of that loss is the replacement cost of the foam brush. The cost of replacing tokens that walk off is the replacement cost of those tokens. As it is now I sell a token for $1 and it walks off. The replacement cost is less than $1 so my bottom line is positive with that one transaction. If a token costs me $1.25 to purchase and I sell it for $1 and it walks off I need to replace that token with a new one at a cost of $1.25 from which I only received $1. Bottom line is I lost $.25 on that transaction. When tokens cost more than you'll selling them for you will lose money with each walk off.

 

[Earl Weiss]

Having tokens walk off is a loss to my bottom line. It's like someone walking off with my foam brush. No matter how many times that particular foam brush was used I still am required to replace that foam brush with a new one. The cost of that loss is the replacement cost of the foam brush. The cost of replacing tokens that walk off is the replacement cost of those tokens. As it is now I sell a token for $1 and it walks off. The replacement cost is less than $1 so my bottom line is positive with that one transaction. If a token costs me $1.25 to purchase and I sell it for $1 and it walks off I need to replace that token with a new one at a cost of $1.25 from which I only received $1. Bottom line is I lost $.25 on that transaction. When tokens cost more than you'll selling them for you will lose money with each walk off.

I see you have grasped the concept I was trying to convey. You can view it as a straight up "Loss" or you can view it as a cost of doing business, as part of the overall picture. No different than losing a Vac Nozzle, foam brush or whatever. At the end of the day it's the totality of circumstances that matter.

 

[MEP001]

Earl, that's what I've been saying, regardless of whether it's a quarter or a token that vends for what it cost there's an initial purchase of coins for the changer, then each time one is vended, used and returned you've made the money originally accepted by the changer once the coins are returned to the car wash. Since there's a constant income of quarters that restock the changer, you don't count quarters vended as income. Same with tokens if you're replenishing the changer from tokens collected from the wash.

It would certainly be better to pay less than face value for the tokens and make a profit from walk-off.

 

[pgrzes]

I dont get it??? I buy tokens for about .30 a piece. Probably about the same as I pay for a little tree freshener that I sell for a $1 bill. That is a profit center in my eyes. Am I missing something here? Once the coins get to about .85-.90 a piece then might be time for a change. I used to dispense .25 tokens. the cost went to .22-.23 a piece, I went to a $1 token that I only pay a few cents more. .65-.70 a coin times about 7000 coins a year is roughly $5000 a year that I really do nothing for. Plus the added comfort that vandalism is lessened when tokens are being used. Just my opinion on this not blasting anyone.

 

[copperglobe]

I dont get it??? I buy tokens for about .30 a piece. Probably about the same as I pay for a little tree freshener that I sell for a $1 bill. That is a profit center in my eyes. Am I missing something here? Once the coins get to about .85-.90 a piece then might be time for a change. I used to dispense .25 tokens. the cost went to .22-.23 a piece, I went to a $1 token that I only pay a few cents more. .65-.70 a coin times about 7000 coins a year is roughly $5000 a year that I really do nothing for. Plus the added comfort that vandalism is lessened when tokens are being used. Just my opinion on this not blasting anyone.

pgrzes, you're right. It's a profit center. At my wash it's great when a person buys a token and then loses it never to return it to the wash...as long as the cost of that token is less than the $1 I sell it for. Your comparison to the little tree vending is correct. And, as you said, when the cost of that token approaches the $1 vend price we'll need to look for answers.

 

[robert roman]

A token is simply an object that looks like a coin and is used in place of a coin.

If you distribute a token, you control how much money it is to represent. If you wanted to, it could be designated as being worth $0.50 or arbitrarily set at $2.00. No one might be willing to give you $2.00 for it but that doesn’t negate ability to do so.

So, I agree, once cost of goods exceeds expected price, use regular coins.

 

[robert roman]

“It's a profit center. At my wash it's great when a person buys a token and then loses it never to return it to the wash...”

Perhaps this is one reason self-serve continues to decline.

After I realized how many tokens I lost or piled up in glove box, I quit going.

 

[Earl Weiss]

“It's a profit center. At my wash it's great when a person buys a token and then loses it never to return it to the wash...”

Perhaps this is one reason self-serve continues to decline.

After I realized how many tokens I lost or piled up in glove box, I quit going.

Defies reason. The piled up tokens could be used with no further monetary outlay.