Tom Shivers: It’s Tom with the Vending Business Show and I’m here again with Larry Towner a vending business consultant with Service Group International and we’re continuing this series on vending business tools. So which tool are we talking about today Larry?
Larry Towner,: Let’s talk about Vending Operator Tools money handling and how you handle your money and what you’re gonna need to actually get your money from the machine to the bank.
Tom Shivers: Okay.
Larry Towner,: So of course we all know that money just magically, they put the money in and the best part of the vending business is actually counting the money, at least that’s what I was always led to believe. But you do find that counting money tends to be not all that much fun when you do large quantities of it and it starts to actually become kinda drudgery in a job.
Larry Towner,: So what we’re gonna give you are some tips here onVending Operator Tools Handling Money and how to handle your money and make it efficient and make it fast. From the machines we always like to, and we found in our research around and talking to vendors around the company, that it’s best to inventory money from each machine so you’re going to need to have some kind of a system where you pick up money from each machine which means you’re gonna need a container to carry money from each machine. There’s a variety of money bags that are available out there. There are zippered bags, there are canvas bags, there are all kinds of different containers. I know one guy that uses paper bags and uses them very effectively, buys lunch bags and that’s what he uses. He writes the account on the outside, the machine number on the outside of the bag, puts the money in it, sticks it in his box. Works great for him, everybody’s got a different system but you’re gonna need a individual way to handle money from each machine that you get out there in the world.
Larry Towner,: So with that again, there’s all kinds of different bags, zipper bags and things like that. Money needs to go into the truck. There’s a couple of different things, money of course is a very, what do we wanna say, a highly desired item and some of the bad guys might try to steal it from you so from a security standpoint you’re gonna have to have some kind of system where you can make your money somewhat secure or make it completely secure. There’s safes available, there’s all kinds of things that you can do. There’s Deceit, we placed our money all around the trucks in different locations so that if somebody did break into a truck and wanted to steal the money from us, they would get some of it but not all of it.
Larry Towner,: How you handle that is your business, but I want you to be cognizant of the fact that that kind of thing happens out there. So you get your money and you get it back into your office or your warehouse or wherever it is that you handle your money. Where do you go from there? A couple of things, you’re gonna need some kind of a mechanical counter for both coin and for bills.
Larry Towner,: There’s many many different kinds of coin counters that are available. Anything from hand rail counter systems that you crank by hand to fully electronic visions where you just poor the bag in and it sorts and separates and gives you a total, knows exactly what you’ve got in every different denomination. These are fantastic tools. You’re going to have to have one.
Larry Towner,: Plenty different manufactures of this equipment out there, do a little research on the internet and expect to spend some money. The least expensive ones you’re gonna find are gonna be about $500, and that’s in a used situation for a rail sorter, you’re gonna find something in about the $500 range that’s worth having I wanna say.
Larry Towner,: And the most expensive side you can spend into the $20,000 range to get a really really good, new coin counter that’ll do six, 7,000 coins a minute and sort and separate and give you very low rates. Starting off obviously, gonna start on the lower end of that but eventually you’ll find you’re gonna need to move up into better things. Great problems to have.
Larry Towner,: Same thing with bill counters. You can go down to the local warehouse club and you can buy yourself a bill counter that will work. It will count all of your bills and all it does is what they call piece counting, it does no counterfeit detection and it will not pick up anything that has to do with if you’ve got a $5 bill in there it does not sort and separate out the five’s. That’s about 200 bucks. You can go up to almost an unlimited amount of money depending on speed and how much counterfeit detection they have and also how much sort and separates because there’s bill counters out there that’ll separate your fives off into a different bin, your 10s, your 20s, your 50s, all of that exists out there. Most vendors usually only handle fives and ones but if you’re dealing with a lot of fives you’re gonna wanna have something that’ll automatically sort out the fives or you’re gonna have to do it by hand. Because you really don’t wanna count a five dollar bill as a one dollar bill. It’s a pretty big loss.
Larry Towner,: Really important, lots of research to do on that kind of stuff and many many different manufactures of this kind of equipment but you’re gonna have to have one. Getting money from your coin counters to the bank. How do you move your money from the counter to the bank? Coin is very very heavy. You’re gonna need … You need to talk to your bank. You need to see what their requirements are. My bank would take money in federal reserve bags so we took a $1,000 worth of quarters at one time and that weighed 52 pounds. Our bags actually came from the bank, they supplied us with the bags, our coin counter loaded bulk into those bags and we took whole bags down to the bank.
Larry Towner,: There’s other systems that are available. They’re starting to do partial bags now because of your bank. It depends on how you wanna do it but all of these are issues that you’re gonna have to worry about and going to the bank with a hand truck having to carry several thousands dollars is always a very fun and exciting experience. Remember folks keep it safe, make sure your people are aware they become a target. Don’t go at the same time. We’ll do a show on security, on basic security measures coming up in the future.
Larry Towner,: Tom do you have any questions on Vending Operator Tools Money Handling?
Tom Shivers: Did your equipment help you sort these out beforehand or no?
Larry Towner,: Yes, you’re gonna want a machine that does what’s called sort and separate. Meaning it takes the various different coins, if you dump a bag of mixed coin in there it splits it out in to each individual bag. There’s a couple of different designs that do that. One’s called a rail sorter where the coin runs down a rail and it falls in by size because coins are all different sizes and that works really well. The other is an actual spinning system and that does the same thing only it does it on a [inaudible 00:06:39] and it’s a lot faster.
Larry Towner,: But again, your research on the internet will show you the different kinds. There’s a big variation on cost on all of these different programs so it all depends on your budget also.
Tom Shivers: All right, great. Thanks Larry. If you want more good vending business tips like these then be sure to subscribe. And you’ve been watching Vending Operator Tools Handling Money at the Vending Business Show, a publication of A&M equipment sales.
Bill Recyclers Mean Profits An interview with Chuck Reed, Director, Marketing and Sales at MEI
Why was bill recycling developed?
Bill Recyclers Mean Profits On average consumers do not carry exact change; most carry one or two dollars in coin and bills and then a five and a twenty dollar bill. The consumer has alternatives with convenience stores and so they change their behavior. If a vendor does nothing more than enabling $5 dollar bill acceptance it can save sales up to 10-15% and it goes up if they enable higher bill denominations.
What has MEI’s experience been working with operators?
Operators have not seen fraud to increase after installing bill recyclers. They have seen sales across a wide specturm of placements increase by 10-20%. Bill recyclers also enable operators to win new accounts. Bill breakers go away.
What locations benefit the most from bill recycling?
Locations where consumers are not coming on a daily basis with exact change.
Listen to the interview:
Tom Shivers: I’m Tom Shivers with the Vending Business Show. Here with Chuck Reed, director of marketing and sales at MEI. Today, we’re talking about new technology and bill recycling. Chuck, thanks for being here.
Chuck Reed: You’re welcome.
Tom Shivers: Why was bill recycling developed? Bill Recyclers Mean Profits
Chuck Reed: Bill Recyclers Mean Profits Well Tom, a couple of years ago a couple of business companies decided it looked like there was a problem in the vending industry in terms of enabling higher bill denomination acceptance. There was a concern by the operators that if they started accepting 5s, 10s and 20s that the changer would starve. It was a real concern understandably by the operators that that could result in exact change or sold out situations in the vending machine, that’d be a problem. A couple of companies got together and created what was new for the industry, called a bill recycler. Which is a product that is like a bill validator but stores, instead of just in a cash cassette, stores onto a drum a quantity of bills. Typically up to about 30 bills, although the operator can decide how many it is.
Chuck Reed: The operator can decide to store either one denomination, typically they’re one dollar bills or five dollar bills, one or the other, not both. That technology’s advanced now for the last couple of years. MEI of course in the bill recycling space and has deployed well over 30,000 of these devices now. We’ve moved well beyond just a niche product into something that really does work for an operator. What we find operators telling us is that you know in the old days the line was if the machines cleaned, filled, and adjusted you’ll get the maximum amount of sales. What we’re finding is is that there’s a surprising large number of sales that an operator is missing. Because today a lot of consumers don’t carry a lot of exact change on them.
Chuck Reed: In fact we did a study about two years ago and found that on average about half of us carry the equivalent of about three, one dollar bills or the equivalent in coin. Only about, and most of us have at least one dollar bill on us. The large majority of what people carry on them is say one or two dollars in coin or bill and then a five and a 20. If the vending machines only taking a one dollar bill and some loose change, a number of consumers, in fact as many as half, won’t be able to make the purchase at the vending machine.
Chuck Reed: I think it’s been a surprise to everybody involved. What happens is the consumer has an alternative now. They go to a convenience store, a kiosk, whatever it may be. The operator not only loses that sale for whatever that product was going to be, but they lose a larger percentage of sales because a consumer changes their behavior. If the stores closed more often, the vending machines not able to take their money, then they start changing their behavior.
Chuck Reed: What we have found is by looking at what the consumer is carrying and enabling a higher denomination in bills the vending operator is able to capture a larger percentage of sales. In fact, what’s interesting is if the vending operator does nothing more than just enable five dollar acceptance in a vending machine, which is often times enabled through a dip switch on most bill validators today. They can see sales lifting between 10 and 15%, which is pretty dramatic for doing nothing more than just enabling five dollar acceptance. The number goes up even higher than that if they enable 10 and 20 dollar acceptance.
Tom Shivers: What is MEI’s experience been working with operators?
Chuck Reed: What we found is there was a lot of concern among operators early on about enabling this higher denomination bills and would that result in consumers claiming fraudulently that they had put a 10 or 20 dollar bill in the machine and indeed they hadn’t. Then trying to get money back from the operator. What we have found, that really hasn’t been the case. Operators have not experienced any kind of, see increased fraudulent activity with people claiming higher denomination bills being cheated from the vending machine.
Chuck Reed: What they have found, most operators, is that indeed by enabling five, 10, or even 20 dollar acceptance, they’ve seen sales lifts of 15, 20, 25% or even higher. What’s also interesting is that many of the operators that have a large number of recyclers deployed have seen the sales lift across a wide spectrum of product placements, location placements. Car dealerships, hospitals, amusement parks, locations particularly where there’s a lot of transient activity and people may not have exact change on them and they walk up or they may have a family of four that all wants something to drink. The vend prices say $2.00 each. At that point they have say, almost $8.00 of product to buy. The consumer would prefer to put a 10 or 20 in versus trying to find the equivalent of $8.00 in loose change or dollar bills.
Chuck Reed: We have seen significant increases or operators have seen significant increases in sales and they have also not experienced any kind of dramatic reduction and reliability. Bill recycling today is a very reliable technology, particularly the MEI product. We see very, very little on the way of jam frequency. Operators are increasingly confident in putting recyclers out across a wide spectrum of locations and seeing the benefit of the sales lift. Operators are really thrilled about that as an opportunity for them. It’s also enabled them to win new accounts by being able to go into a new account and talk about taking higher denomination bills, which everybody inherently knows is what they’re carrying them on when they’ve gone to an ATM recently.
Chuck Reed: All in all it’s been a really good experience for most operators. Good sales lift as well as seeing some new placement locations for them. Another thing to point out, which a lot of operators like to point out to me, is that they’ve also been able to eliminate a lot of bill breakers out of their banks. The bill breakers that we use to always have in a vending bank can go away with bill recycling because at that point with the bill recycler, you don’t need to worry about changing out a 5, a 10, or a 20 dollar bill for change. You’re able to accept that bill right into the bill recycler and pay back in bills and coin, just like they would in a retail experience. A lot of operators are excited also about the ability to take bill breakers out of vending bank and save that equivalent amount of capital deployed across a large number of vending banks.
Tom Shivers: I know you mentioned in several locations there, but what locations benefit the most from having bill recycling?
Chuck Reed: Tom what we find is you want to find locations where consumers aren’t necessarily coming to that location every day and therefore would have exact change for the 1.25 drink purchase or the 85 cent snack purchase. Locations where there’s a fair amount of transient activity. Like I said, we find that hospitals tend to be a good location. We hear a lot of good things about them. What we find is that operators are telling us that they haven’t found many locations where recycling doesn’t work. Hospitals, shopping malls, theme parks are wonderful location where you’ve got large families gathering and at some point during the day needing either a drink or some snack product. You have to think about the vend purchases more than just a single vend price. For example, if the drink is $1.50 out of the vending machine and they need four of them. That’s not $1.50 vend price to them, that’s a $6 vend price. That’s the way they treat it and that’s the way the operator needs to treat it. In that case, as I said earlier, since most of us don’t carry that amount of exact change or coin on us, it’s important that you’re able to take a 5, 10, or even a 20 dollar bill. That’s really what the consumer has on them and they consider that $6 vend worthy of putting in a 5 or a 10.
Chuck Reed: I think we’re all past the days of lamenting about how customers wouldn’t put in a higher denomination bill into a machine. I think we all go to a store wherever we live and we put into the self-check kiosk 5, 10s and 20s already. Consumers are well trained on putting in larger denomination bills into a machine and fully expecting good reliability. Again, wherever there’s a large group of people that gather where they may not necessarily have exact change, you’re going to find bill recycling’s a great alternative way to enable higher denomination acceptance. Not worry about the changer starvation and really capture the sales you otherwise would have lost when the consumer simply wouldn’t have the means to make that purchase.
Tom Shivers: Well, Chuck thanks for sharing. Any little thing you want to share about MEI with us?
Chuck Reed: I think MEIs excited about introducing some of these alternative payment technologies. Obviously, we’re here to talk about bill recycling today but we also provide cashless products to the operator base as well. I think what’s important for the operator to understand is that MEI has a proven track record of developing very robust, reliable alternate payment technologies. I think operators need to take the time and take advantage of what’s been developed and try to change up their offering to marketplace so they can capture new accounts, retain the accounts they have, and more importantly capture some of the lost sales that are otherwise are walking away and going to a convenience store, a kiosk, wherever else a consumer has to go to make that retail oriented experience.
Tom Shivers: You’ve been listening to Bill Recyclers Mean Profits at the Vending Business Show, a publication of A & M Equipment Sales. For more Vending Business Blogs USA TECHNOLOGIES ePORT G9
In this episode of the Vending Business Show, we interview Dale Barebo, a successful vending operator, and vending sales manager.
He shares Common vending machine repairs issues with validators and changers & The major brands of validators and changers available today
EPISODE TRANSCRIPT:
Tom Shivers: I’m Tom Shivers with the Vending Business Show, here with Dale Barebo, Sales Manager of Phoenix Vending Systems, and today we’re going to talk about vending machine repairs, validators, and changers. So, Dale, thanks for being here.
Dale Barebo: No problem, thank you for having me. Let’s Talk about vending machine repairs
Tom Shivers: What vending machine repairs are easy for vending operators to perform on as it relates to their vending machine validators and changers?
Dale Barebo: Well, I would say that any vending machine repairs is fairly simple. When they get out to a machine it’s just a matter of not panicking and not getting upset. To diagnose it correctly and see if it’s taking money. If it’s not taking money, check and make sure that it’s clean. Just generally a damp cloth to wipe out the bill path or wipe out the coin path. Then, number one thing I always recommend for people to do, is simply just power the machine down, count to 10, power it back up and try it again. It’s just like your computer at home. The hard drive is gonna crash. It’s gonna lock up. It’s gonna lose its memory. You power it down, you power it back up. It’s reset and it’s up and working. And that’s the number one thing I always tell people to look for.
Tom Shivers: Okay.
Dale Barebo: It’s pretty simple.
Tom Shivers: All right, well, that’s easy.
Dale Barebo: It is very easy, and it’s not rocket science to work on these machines. It’s just, like I say, if you don’t panic, use a little common sense. You look for the problem that exists and a lot of the times I’m gonna say 70% of the time it’s dirt related. 20% of the time it’s something simple that there’s a dollar bill stuck in the bill path, there’s a coin in the coin jam. And 10% of the time it’s a problem that you’re going to need outside help, in which case you just remove the validator, you remove the change, and you put a replacement in, and you send it in and we get it repaired and send it back to you.
Tom Shivers: Yeah. I imagine there’s a number of common do-it-yourself repairs that vending operators could handle or even … not just vending operators, but anybody who owns a machine.
Dale Barebo: Correct, and I always tell everybody, anything we do you can do. It just comes down to, there’s a knowledge base that you have to have, but beyond that, cleaning is the big thing, like we talked about. 70% of it is gonna be dirt related, and if they can manage on a semiannual basis or once a quarter, to just get in there and just, when they’re servicing the machine just take those corrective measures to clean the coin path, to clean the bill path, to dust it off a little bit. They’re going to save themselves so much time and so much money because it’s gonna reduce the breakdown, and dirt is the enemy. Coins are dirty, dollar bills are dirty, people’s hands are dirty. That path is off and it gets into those things.
Dale Barebo: And that’s the big general maintenance things that most folks can do. As far as taking it out of the machine and taking it back to a bench and tearing it apart, yeah, you can do that, but again it might get more complicated, and you may not have the replacement parts. But, we sell the parts if you need them. If you break something it’s no big deal. Everything is replaceable on those units. There’s nothing that isn’t manufactured that we don’t have replacement parts for.
Tom Shivers: Okay, good to know. Well, what major brands are available?
Dale Barebo: Well, the major brands that are out there, basically, are gonna be Coinco and Mars. Those are the two major brands. There’s some other brands, such as Conlux and JCM and CashCode and all those. And we certainly look at all of those and we can repair most of those, and if we don’t there’s other service centers that can. Pretty much the major brands, the major players are Coinco and Mars and Conlux, and those guys produce probably most of the validators and coin changers that are out there, and those are usable in all manufacturers of machines, from Automatic Products, Dixie Narco, Vendo, Royal Vendors, [AMF 00:04:25]. Every machine that’s out there are gonna use the same changers, the same validators. There’s just different connections that hook into ’em, and again, today’s market is mostly [MVB 00:04:15] on the new stuff. The older stuff we carry replacement parts. We can fix those. There’s different models that go in there, and the manufacturers have made similar models that cross over.
Tom Shivers: So, Coinco, Mars, and Conlux.
Dale Barebo: I would recommend those three, yes.
Tom Shivers: Okay. Well, anything else you can share with us?
Dale Barebo: Well, I always just tell folks if they need anything to give us a holler. We do customer education programs that come out to your facility and help you guys do things. We have some criteria for that but they can call us and we can certainly talk to ’em. We don’t mind talking to folks over the phone to try to talk them through problems that they might have and source them in the right direction to help them out. No charge for that. So, we try to help you out.
Tom Shivers: Okay, great. Super. So, y’all are Phoenix Vending Systems. How do people get in touch with you?
Dale Barebo: Well, they can get ahold of us at 1-888-858-8583, and we consider ourselves an obsolete equipment repair company, meaning we can fix anything that’s been produced probably since the mid ’50s up until today, and certainly we carry all replacement parts for those things. We offer a one-year warranty on everything we fix, and we do a fixed price program for you guys that will do a … you know what it costs you when you send it in. So, it’s pretty basic and pretty simple. We got different programs for different sized companies. All they have to do is give us a call and we can certainly talk to them over the phone about that.
Tom Shivers: Awesome. You’ve been listening to the Vending Business Show, a publication of A&M Equipment Sales.
Our vending consultants are happy to answer any questions or concerns you may have. Call 770-482-7993 or Email one of our consultants at: [email protected]
