Collection Day

By Bob Nieman, CLA Member posted 01-03-2018 11:02

  
Laundry Owners Share Their Payment Options – Along with Their Subsequent Collection Procedures and Strategies

Without a doubt, it’s one of the first and probably most common pieces of advice a newcomer to the vended laundry industry will receive:

“This business isn’t just about collecting quarters once a week!”

Sage wisdom? Definitely.

And, although nothing could be more accurate than the statement above, every successful, long-time laundry operator will admit that collecting quarters or counting dollar coins or reconciling the income on a card system is clearly a huge part of the business.

As a result, this month, we asked a number of veteran store owners to discuss their current payment options, as well as their subsequent collection procedures and tactics:

Bob Frandsen
Maytag Laundries
Rush City, Minn.

Payment Options: At our laundries, the changers dispense dollar tokens and quarters, and our washers and dryers accept both options.

We collect every machine once per week – with some of the more heavily used machines being collected twice a week.

Our customers can buy change with cash or buy tokens with credit cards.

For security, all of our changers are rear-loading, and in most of our stores, the changers are in a secure vault room. We also have a camera system in that room so that we can view the store before we go out to collect. After collecting, we fill the changers and pull the currency, before leaving for the bank.

We dispense a combination of dollar tokens and quarters for cash, and only dollar tokens for credit card. Therefore, 80 percent of what’s in the coin boxes are tokens, which reduces the chance of someone trying to break in since they would get mostly tokens. For the same reason, when we are collecting, it reduces the chance that someone is going to try and rob us. We also collect during less busy periods, as that also reduces to chances of being robbed.

We collect washers and dryers by size, put that information into a spread sheet and calculate the dollars per machine size and spins per machine size. In my opinion, you can analyze this data to death, but the fact is that your customers will use the machines you have – and, if those machines are not available, they will use a different size machine.

My opinion is that someday an electronic payment system will be accepted by everyone – no changers, no change, no currency, no coin acceptors, no coin jams, no collecting and even no depositing. Of course, the key phrase is “accepted by everyone.” But it’s just a matter of time.

Bruce Walker
Wash It Kwik
Denton, Texas

Payment Options: We are a card store, and we accept MasterCard and Visa. If a customer has quarters, we will buy them and convert them to green coupons. Of course, the main disadvantage to this payment option is dispelling new customers’ expectations; they expect to pay with quarters and often make additional stops at the bank to have enough coins to do their laundry. It takes a little convincing to explain the card, but once they get it, it’s easy.

The majority of my business is from credit cards, so that gets deposited every day. I make a cash deposit every day or two from the cash register and once a week from the VTM/card machine.

I take the money to the bank and deposit it. My computer keeps track of my turns per day. At the end of the month, I run a report that breaks down all of my sales – wash-dry-fold, pickup and delivery, and self-service. I can simply look at my bank statement, subtract the pickup-and-delivery and wash-dry-fold income from the total deposits, and the remainder represents my self-service sales.

Because the VTM accepts debit/credit cards, the majority of my business’ income gets automatically deposited each night.

I will use the cash from the VTM to break any bills in the register and add enough to operate for the day. I am the only one who has access to the VTM.

In addition, my good friend and fellow laundry operator Paul Pettefer sold me my bill breaker, which keeps my team on task, rather than making change all day; it’s the best money I’ve ever spent on a piece of equipment for my laundry business. Again, customers come in, insert a $1 bill and expect four quarters to come out, so having a good team on site helps with the process. The bill breaker gets replenished weekly from the VTM. I break all of the $20 and $10 bills into $10 and $5 bills. If someone needs a $1 bill, we handle that over the counter.

I also keep a small amount of cash in the safe, to which all of my attendants have access. They break large bills or buy cash from the bag for the cash register. And I have a log where they can track everything. This has been how we’ve done it for 15 years, and it works. I’ve never had a problem, other than the occasional human error.

Of course, having a team of trustworthy people is the most important part of this entire process. And, with a card store, one hidden cost is customers who come in expecting to use quarters and simply leave. Fortunately, I have a great team of people who are friendly and helpful, which makes for much smoother sales. Although that doesn’t involve “store collection” per se, having a good team provides me with more money to collect.

Hank Walter
Whale of a Wash
Martinsburg, W.Va.

Payment Options: I own and operate 10 laundromats. I accept quarters only at six of the stores; quarters and dollar coins at three of them; and coins, cards and hand-held recognition at my most recently opened laundry.

Thus far, coins are being used to activate my washers and dryers 80 percent of the time, while credit cards are being used 20 percent of the time – and, of those credit card sales, just 2 percent to 3 percent have used our kiosk activate option or smartphone symbol recognition to start a machine.

I plan to upgrade two of my quarters-only stores to the triple-option system later this year. I believe that hand-held recognition is the payment system of the future for our industry.

The dollar coin option has been reasonably successful at two of the three stores where I’ve made it available; however, many customers think the dollar coin is just a token, and they will change them out for four quarters before leaving the store. There seems to be a fairly long learning curve with the dollar coin. The dual coin drop has worked well. We installed them on our 50- and 60-pound washers, as well as our 45-pound dryers. In addition, our newer 22-pound washers accept both quarters and dollar coins.

The disadvantage of the dollar coin option is that the collection process takes longer. The use of a coin separator/counter definitely helps. We are located in a casino town, so dollar coins are available from our local bank at no charge. On average, we “buy” or exchange $700 in dollar coins weekly to resupply our three changer systems for the outmigration.

If you choose the dollar coin option, outmigration is an ongoing collection day problem that complicates the procedure and is one for which you must allow. Personally, I carefully studied and decided against the “scale” collection system that many larger operators seem to be using. Be sure to think this one through before investing in any cumbersome counting and weighing equipment.

We are still experimenting with the features of our on-site kiosk and its ability to communicate with our remote office bookkeeping computer.

At a minimum, new store owners should be looking carefully at the payment systems at competing locations when making their own payment option choices. Also, no matter what payment system they choose, I recommend the installation of a high-resolution camera security system – placed to the front and back of the change machine or kiosk – with a 15-second online update to the company’s cellphone network.

Video is a valuable and critical part of our collection system; however, it poses the additional burden of the local police occasionally requesting access to our 24-hour recorded video when a wallet or handbag goes missing – and our staff has to spend time on site while it’s investigated.

We use case-hardened steel legs on the rear two corners of all of our change machines. These are mounted into four-inch concrete using the same pan-head expansion bolts that we use to anchor our hard-mount washers.

There is a “hidden” value to our collection system, as the collection visit also includes the delivery of cleaning supplies, vendor soaps and out-of-service diagnostics. We can tape the out-of-order machines, order the necessary parts and fix the issues in the next – and only – repair visit. Seeing as our locations are up to a one-hour drive from our main office/“flagship” store, saving a trip converts to a significant reduction in fuel expense.

The last recommendation, though not directly collection-related – is to pay your employees a generous wage per hour. Salaried employees have a tendency to feel they are overworked and underpaid in this 24/7 business. In my 40 years of experience in cash-oriented businesses – including laundry routes, restaurants, golf courses, laundromats and car washes – “underpaid” is the biggest single cause for employee theft.

Ron Kelley
EZ Coin-Op
San Jose Calif.

Payment Options: We use a hybrid system at my two of my laundries – quarters and credit/debit card acceptance – and quarters only at my third store. However, my coin-only store will be upgraded to a hybrid system later this year.

The advantage of the hybrid option is the fact that allowing customers to pay with coins or credit cards provides them with the same options as other retail businesses. Whether they’re purchasing gas, coffee, groceries, clothing or a meal at a restaurant, customers have a choice in how they pay, and I want them to have the same options at my stores.

My coin boxes are collected on set days, according to how busy that model of machine is. The entire store is collected weekly, with collections typically handled in the morning.

At the hybrid stores, reports for weekly revenue are available, so we run quarters through our coin counters only to bag 1,000 quarters in each – this way we know if we’re short on quarters for the upcoming week or have extra to use at another location. This also allows me to know exactly how much money is on hand at each store every week.

We always track revenue by machine type and size. This gives us the turns per day to help with vend pricing strategy, as well as when it comes time to purchase new equipment so that we know what size machines are most popular with our customers.

As business has grown, collections have gone from once a week on all of the machines to two and sometimes three or four times per week on some machines. Of course, with the addition of the hybrid system, collections have been simplified; we no longer have to count and batch quarters – now we just batch them.

As far as collection costs, I pay the standard credit card processing fees on my hybrid systems, but there is no extra cost for the reports. Cash deposit fees vary from bank to bank, as well as market to market. Collection does not impact those deposit fees.

I would recommend collecting twice per week, with one of those days being a full-store collection and the other being at least a partial collection. Of course, a store’s specific volume of business will dictate how often it needs to be collected in order to avoid full coin boxes jamming the coin drops.

Larry Vladimir,
Bakers Centre Laundry
Philadelphia, Pa.

Payment Options: Laundry cards and credit/debit cards

We have a card-only store. Customers can use our laundry card or their debit or credit cards at the washers and dryers. They can value their laundry card with a debit/credit card or an EBT/Access card at the value transfer machines. All counter sales are paid with laundry cards, debit cards or credit cards at the point of sale. In fact, our vending machines also accept only laundry cards or credit/debit cards. So, there is no cash out in the store. We have no cash drawer.

I collect almost every day. A lot of the small bills go right back into my bill breaker, which helps reduce the amount the money I leave the store with. We also have a drop safe that my manager uses if I’m not at my store or on vacation. Plus, we have a separate alarm zone and key pad for the office, which is alarmed and locked when I’m not at the store. Other than me, only our manager has access. Above all, I try to be as discrete as possible when collecting.

Fernando Salas
Freedom Laundry
Denison, Texas

Payment Options: Quarters only on dryers and 20- and 30-pound washers; dollar coins and quarters on 40-, 60- and 100-pound washers

In a recent survey, my customers indicated that they wouldn’t use credit cards, debit cards or phones to pay for their laundry, as most of them don’t use banks.

I collect daily so that I can track my daily sales. I recycle the coins and deposit the cash from change machines.

I will deposit the cash from change machines. Once a week, I fill the changer to a line marked on the inside, and the rest of the coins are deposited, along with the cash. I count the coins daily, before putting them back into the change machine. I will then document this information on spreadsheet to compare to past deposits.

All in all, be vigilant when collecting and extremely careful with your keys.

Samuel McKnight
Little Giant Laundry
Guilford, Conn.

Payment Options: Coins

Personally, collecting is boring and tedious but necessary. One way of looking at it is that it’s the fuel that runs your store. My store is coin-operated, and I have two change machines.

My principle has always been to have enough coins for high-demand periods, like weekends. After a while, you’ll know the specific customer traffic patterns of your particular store.

I’ll collect all of my washers and dryers twice a week. In between those full collection days, I’ll do partial collections three times a week, which typically involves just my larger washers.

On occasion, both of my change machines become depleted. When this occurs, I have “emergency rolls” of quarters that my attendant can use until I can get to the store. Of course, I’ve instructed my attendants to call me immediately when both machines are empty.

Another coin-related issue that can arise from time to time is when non-customers come in to use the change machine, despite having no intention of doing laundry in the store. Clearly, this creates a collection problem, as it directly impacts my coin supply. It doesn’t happen often, but it’s something to be aware of.

Mark Murray
Adrian Fabricare Center
Adrian, Mich.

Payment Options: We’ve switched to an exclusively card operation after more than 40 years of coin collection at this location. I had been handling coin pickups (quarters and dollar coins) for more than 50 years before moving to card.

Moving from coin payment to the current payment technology (credit card/mobile payment systems, etc.) is a difficult move for a number of reasons – including cost; complexity; risk of breakdown; and increased operating costs related to credit card acceptance, equipment maintenance and upgrades.

The upside? Ultimately, what choice is there? Today, large machines cost upwards of $8 to $10 – 40 quarters or 10 dollar coins. Let’s assume the government creates a $5 coin. Who will carry coins? I don’t. Most people under 50 don’t. We use debit and credit payment systems, as well as mobile payment technologies.

Think about it. If your competitor is charging one swipe for a full-cycle dry, versus your store at 25 cents for five minutes, what is the customer going to think about that? The next generation will, all else being equal, be going to a store with current payment systems that make sense to them, ones they use daily. Pre-Roman metal units used since the beginning of civilization are not the payment method used by people today or tomorrow.

Customers will adopt to card payment systems without difficulty because they use cards daily in most other environments. We lost a few customers on conversion, but we gained a lot more than we lost.

With our card system, the security is fantastic. Balancing takes seconds and doesn’t require the owner to handle cash. The reports are comprehensive. Credit card chargebacks are rare or non-existent in most cases. The marketing options are extensive. It’s never been easier running – or collecting – my store.

Mike Lavin
Gulf Gate Laundry
Naples, Fla.

Payment Options: Quarters only

I use quarters only at my laundry, as part of a keep-it-simple approach to the business. I have a large-capacity change machine, and there is a nearby ATM. Of course, the disadvantages to this way of doing business are the time spent handling quarters, the mistakes made by customers identifying quarters, the time it takes to insert quarters and the maintenance of the change machine.

By contrast, the advantages are offering reasonable price flexibility, accepting a universally known method of payment and great simplicity. I remove cash from my change machine daily. Coin collection and counting occurs two to four times per week – at irregular intervals and varying times of day, as well as days of the week. And I track machine revenue by size, such as 20-pound washers, 40-pounders and so on.

I would advise any laundry owners who are new to the business to collect their stores frequently, until they learn their operations’ patterns.

Andy Merendino
Suds Yer Duds
Carneys Point, N.J.

Payment Options: Quarters only

I operate a quarters-only laundry. I usually collect my store twice a week, but typically have to empty my larger washers about four times per week. Unfortunately, the larger machines often fill up before it’s convenient to dump quarters. After all, I’ve got $3 washers and $8.50 washers that both have the same size coin box.

I always collect when the store is quiet and not very busy in order to limit any security concerns. I weigh the quarters to get a count, $20 per pound.

I believe the advantage of the traditional, “coins only” business model is the fact that I have complete privacy and control over my business.

I’ve looked into other payment systems, but I haven’t found one that I could fit into my budget and business model of a mostly unattended laundromat. My personal opinion is that a cash option should always be offered in addition to any other payment options. In fact, I’ve had some customers start coming to me from a local apartment complex just to avoid the apartment laundry’s card system.

I’ve considered switching to a dual quarter/dollar coin acceptor, as well as to some type of coin/card system, so that my customers have a choice

Bruce Rocha
Mattapoisett Laundromat
Mattapoisett, Mass.

Payment Options: Credit/debit cards and cash

I collect once a week and I receive get computer reports that tell me how much money is in my VTM. For safety, I collect during a quiet time of day, and the collection points are out of direct view of my customers.

When you collect just once a week, it’s not a big deal. About 60 percent of our sales are on credit cards, so that goes to the bank electronically. The collection procedure takes less than five minutes for two VTMs.
Our records are e-mailed to us from the VTMs, or we can access them via computer at a remote location.

I’ve never had a collection issue since we’ve had our card system. On the other hand, when I had a coin-operated laundry 17 years ago, it was a major problem carrying buckets of coins, counting them, rolling them – and then apologizing to the bank for bringing in $2,000 worth of quarters. Filling the change machine was a problem, and fixing it when it was broken down was an expense and a problem. What’s more, employee theft was a big deal.

Today, it takes me five minutes to collect with the card system, and I know in advance how much money I will expect to have at collection time. When I was dealing with coins, it was a four-hour experience.

Ken Barrett
Washin Coin Laundry
Anniston/Oxford, Ala.

Payment Options: Quarters and dollar coins

My target has always been to collect twice a week. Over the years, I’ve put changes in place to help reduce the amount of times per week I need to actually collect. Sure, it’s great to have my machines running with a lot of people dropping money into them, but I still wanted to have a flexible schedule – and to not have the headache of the machines not running due to full coin boxes.

Initially, this was accomplished by making larger coin boxes. I’ve welded two coin boxes together and made some changes inside the larger machines to enable them to handle a 15-inch-long coin box. This enabled me to collect just twice a week, without any quick stops in between needed to empty a few machines here and there.

Next, I began accepting dollar coins, in addition to quarters, on the larger washers. With the mixture of coins, I’ve had to add coin sorters to the stores, which reduce the time required and make tracking faster.

My latest store dispenses dollar coins and accepts quarters as well. With the increased dollar capacity in the changer, I’ve been able to go 10 days between collections.

Although many laundry owners have concerns about someone other than a family member helping to move money – and others probably have more concerns with family members – I have a friend who helps each week and covers the stores when I’m out of town. However, he only refills the changers and doesn’t transport anything from the store.

In my case, moving the money from the store occurs at various times with various methods and packaging – soap boxes, tool bags, candy bags, big pockets… it’s constantly changing.

One tip: If you collect large sums of cash and have concerns about safety and security in your area, armored car companies are much more affordable than you might expect, and they will handle coins. Of course, you have to be set up to allow them access.

For new store owners, I would suggest trying to keep a regular schedule, with some variation. Emptying the coin boxes gives you a quick insight into what machines are being used more often – or not at all – and how much volume you’re doing. Typically, after pulling open a couple of boxes, I can estimate the income for the store.

I suspect that, in a few years, this discussion will be just a fun recollection of “the old days” as the switch to cards and apps increases. At that time, hopefully, I’ll be able to find a buyer for my bill counter.

[Editor’s Note: I want to thank all of the laundry owners who took the time and effort to contribute to this article, many of them sharing their collection procedures in great detail – including specific days, times and dollar amounts. As a safeguard to those operators and their laundry businesses, PlanetLaundry has chosen not to share some of those specifics.]
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