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As vend prices surpass a dollar, operators need to have confidence in the capability of their currency handling equipment. Bill validators facilitate the raising of prices, but other devices can further maximize customer convenience.

HIGHER PRICE POINTS

Bill validators are necessary in today’s vending bank, either on the machine or as part of a stand-alone change machine.

The benefit of bill validators is to capture incremental sales, said Tom Paczkowski, vice president of marketing, Coin Acceptors Inc. (CoinCo). The acceptance of paper currency allows operators to raise prices and meet the demand of populations who are carrying fewer coins with them. Additionally, with more items selling over a dollar and consumers carrying higher bills, operators are practically forced to turn on the $5 acceptance.

Higher denominations lead to the problem of how to give change back to the customer. This can mean a larger demand on the coin changer. A bill recycler might be more efficient since it can use the bills customers are inserting into the machine as change for other customers, said
Paczkowski. Otherwise, the operator has to fill the coin dispenser more often.

VALIDATORS INCREASE SALES

When bill acceptors or bill validators were launched around the 1980s, operators saw a spike in sales, maybe 25 percent back then, said Chuck Reed, marketing director, MEI/Conlux. The argument is that by being able to accept higher denomination bills, it’ll increase the likelihood of not only a purchase, but the purchase of a higher
value product.

“Obviously everyone wants paper,” said Charlie Deck, president, Deck Vending Co., Conneaut, Ohio, about the popularity of bill validatiors. There’s definitely an increase in sales, he added. He is also increasing the number of validators which accept fives.

In machines with multiple dollar price points, Deck has seen an increase of at least 10 to 20 percent. Currently, these machines are set to present change in $1 coin mode, but Deck is looking at bill recyclers. “The American public wants to hold onto paper. Ones ($1 bills) don’t buy as much as they used to, so you have to accept $5 or $10s. If you have a bill recycler, you don’t have the added cost of a stand-alone changer,” said Deck.

Deck believes cashless technology and bill recyclers will each have a market in the future depending on the size of a location. Specifically, recyclers will be a good fit in a smaller location that still requires change for $5 and $10 bills. Currently, Deck has a few bill validators accepting $10 bills. He believes that number will grow.

Stansfield Vending Inc., La Crosse, Wis, reports that 80 percent of its machines accept bills $5 and higher. Some bill validators take $20s. “We are experimenting with recyclers, placing them in one machine at high volume accounts. They accept up to $20 bills and dispense $5,” said Jim Wilson, vice president. “Customers love them.” Although difficult to measure, Wilson believes the recyclers have increased his sales at those locations.

As the price of the products increases, said Wilson, fewer customers have the correct change in their pockets to make the purchase. This is a definite benefit to accepting bills in general.

RECYCLERS MINIMIZE CHANGER REFILLING

Paczkowski of Coin Acceptors makes a case for recyclers when a customer purchases an item with a $1.25 vend price. The consumer uses a $5 bill and now needs $3.75 in change. Instead of getting a pocket of coins, the customer can get three recycled bills and three quarters. He sees recyclers as something that can be empty at the start of the day, and then switch to returning deposited bills from cash paying consumers at a later time.

Coinco doesn’t offer recyclers, but Paczkowski sees the pros and cons of the technology. Right now, he said the industry is in a discovery state, evaluating the technology
of bill recyclers or, another option for increased price points, cashless readers.

DOLLAR COINS STILL GET MIXED REVIEWS

Many operators who are not using bill recyclers report dispensing the dollar coin. Bob Yeomans, president of Central
Vending Co., Janesville, Wis., has bill validators on nearly all of his machines. And of those, about 35 percent accept denominations as high as $5. “We only accept $5 bills at machines that pay out dollar coins,” said Yeomans, “where we have a 4- or 5-tube coin mechanism on the machine.”

The Automatic Merchandiser State of the Vending Industry Survey has found that as many as half of all operators have switched from earlier coin changers to the 4- or 5- tube changers. Being able to make change with dollar coins has facilitated higher denomination bill acceptance.

Yeomans was one of the operators who took advantage of the larger capacity tube changers as soon as they
were available.

INTEGRITY OF BILLS PRESENT AN ISSUE

Yeomans prefers coins to recycled bills because of problems with the integrity of the paper currency he’s received. The quality varies from the crisp new bills to the crumpled old bills. “The quality of bills is still a problem even with some of our bill validators,” said Yeomans. “We’re successfully using dollar coins,” Yeomans said, so he feels strongly about encouraging the new currency.

While some operators love the dollar coin, others have difficulty acquiring it. This affects the dollar coins’ desirability.

Reed from MEI said he estimates nearly every bill validator across the industry is set for dollar bills, whereas only 30 to 35 percent take $5. Less than 5 percent take $10 bills and less then 2 percent take $20 bills. If you take higher denominations such as $10 and $20 bills, you have to allow coin changers to dispense $1 coins when paying back change.

Customers aren’t thrilled with dollar coins, said Reed. Recyclers are one option, or operators can go to cashless. If someone is going to buy two or three sodas, swiping a credit card is more desirable. “Also, thinking of price points, cashless is a reasonable alternative for customers,” said Reed.

He claims a very small percentage of operators are using cashless. Of MEI equipment users, less than 5 percent are currently using cashless.

Reed attributes this to the telemetry and transaction fees. Operators are waiting for rates and vending tariffs to decrease, but they know it’s coming. Five years ago, there might have been a question of “if” the world is going cashless. But, Reed said, with Generation X using mostly credit, it’s less a matter of if, but when to add it to the vending bank.

Comparative analysis of different types of change making equipment for vending locations