Will That Be Paper or Plastic?September 15, 2010 No Comments
These days, less and less people are walking around with cash-filled wallets. Whereas cash used to be a staple, nowadays, many people prefer swiping a card to handling many bills, particularly Generation-X and -Yers. All this being said, not all business owners are on board with the idea of a cashless future. The vending machine and amusement industry seems to be going in that direction, but the owners of these businesses may have to be urged down that road, quite begrudgingly, as they observe that the customers utilizing their machines may be some of the few cash-carriers left.
JW’s Amusements, in Louisville, N.C., distributes jukeboxes, arcade games, pinball machines and more. Owner Jerry Williamson said that their jukeboxes and golf games are already equipped to take credit card transactions, but his business is not close to being totally cashless and, said Williamson, “I hope it never comes to that.”
Williamson’s concerns are based on what he sees at his locations. “Not everyone necessarily carries a credit card, so we would be shutting out the population that only carries cash. Also, we distribute to many bars and, often, the bartender will shout out ‘Dollar for the jukebox!’ and someone will hand some cash over for a song. No bartender will shout out ‘Credit card for the jukebox!’, that isn’t going to happen. We will lose money that way,” Williamson said.
As Williamson mentioned, his company does have jukeboxes with a credit card option. However, if in one night the jukebox brings in $300, Williamson stated that only $10 of that is from credit cards. “People have cash in their pockets to spend, whether it is change from the bar, or from the ATM. I do see that having a credit card option available is a good means to bring in additional money, but I do not see it as ever bringing in the majority of the money,” Williamson said.
Ron Ries, president of KD Amusement in Ames, Iowa, concedes that cashless vending is, indeed, the wave of the future, but is reluctant to travel down that road. “It looks like cashless vending is becoming more and more prevalent,” said Ries. “Eventually, you will not have much of a choice about whether or not you want to go this route. Not if you want to stay competitive.”
Ries reads the industry trade magazines and observes his competitors and has realized that those in their 30s-50s are using their credit cards more and more frequently. “We do not have too many of these cashless machines, currently,” said Ries. “I am not a huge fan of it, as to me, it means more fees, not to mention, more complications. I would prefer to stay on a cash basis for as long as possible,” Ries claimed, although he does see it as an inevitability.
Kalamazoo Amusement, Inc., in Kalamazoo, Mich., is a distributor of high-quality billiard tables and game room equipment and owner, James Silman, is not in any hurry to go cashless. “We are starting to see more and more machines with the capability of taking credit cards. But what I don’t like about that are the requirements for spending minimums. I want to keep that guy who has an extra dollar here or there to throw in a machine. Going to a cashless system would potentially be bad for my business.” Silman said he will lose those customers who spontaneously put their extra dollars in the machines. By setting minimums of $5 or $10, that excludes those patrons.
“At your more upscale places, the customers may be more likely to walk around with their credit cards, but at your average bar, the majority of the patrons carry cash. I rely too much on those $1 or 50-cent customers to consider limiting them. It is easier to spend change on a jukebox than to swipe a card. Cash is more likely to allow you to indulge on those impulses,” said Silman, who does not see his company going down the road to cashless anytime soon.
“Paperless money is too hard to collect,” said Dan Goins, owner of Kelly Coin Machine Company in Carroll, Iowa. “I like cash. The customers spend it and you have it in your hands. I do not like having money owed to me. Collecting money becomes too complicated when you are using a cashless system.” All that being said, Goins does admit that cashless vending is imminent, but said he will resist it for now.
“We do dabble with some cashless machines. Mostly the bar counter-top games, such as the MegaTouch. These types of machines seem to be going the paperless route faster than some of the others,” said Goins. “The younger generations seem to only have credit cards on them. That is the way they were brought up, so I know our company will give in eventually, but just not anytime soon.”
Kevin Smith, owner of Kevin Smith Amusements in Wyalusing, Pa., and David Rhea, general manager of JVC Amusement, Inc., in Huntsville, Ala., are also hesitant to go the cashless route.
Smith’s company has some jukeboxes with the ability to take credit cards, but Smith said that less than 1 percent of the revenue comes from these card purchases, making it hard for him to embrace this technology. “The return-on-investment is just not worth it to me, at this point,” Smith said.
Rhea remarked that while many new machines come equipped with the ability to take credit cards, it is not necessary to set up that feature. “It is just going to end up costing more money than it is worth,” said Rhea, echoing Smith’s statement about the poor return-on-investment. “If most people are still using cash, it doesn’t make sense to go through the process of setting up the credit card feature and being charged processing fees for each transaction, etc.”
Rhea said that his company’s largest game room has only eight pieces. “Perhaps this functionality would be better for a larger company, such as a Dave & Buster’s, but we are struggling as it is. For us, going cashless is not a priority or something I foresee in the near future.” -