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Frisbie217

Credit Card reader questions

39 posts in this topic

I would agree with you, however, what about the cost of the product sold?  An increase of $10 would probably run around $5 for the product.  The $9.40 turns into $4.40, and in 4 weeks, you gain $17.60.  My other problem is just because you have credit card sales does not equal increased sales due to credit card acceptance.  Some people are going to use credit as an alternative form of payment, rather than cash, so how do you really know if you have increased sales, or just offered a new form of payment?   I still think that if a machine cannot do pretty close to 200 credit card transactions per month, the operator will have to be prepared to help subsidize the credit card service, which  sounds to much like a democrat program to me.  To bad they didn't come up with Obama card readers.

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Wegroup I also agree with the math. This is why I like the PayRange app. It allows cashless transactions with no monthly fee. One time cost of $80-90. It works great in my warehouse locations and larger office firms. Anywhere where people are there everyday and they don't have to worry about change. I haven't had them in long enough for any real data, but at such minimal cost outlay I can't see it going wrong. Another benefit is if it is in an under utilized location, you can just pull it out and move it to another machine. No appearance change to the machine. No missing cc reader to complain about. It just seems so convenient. Okay I don't want to come off as a schill just my 2 cents, or six cents, or whatever I'm up to.

Sent from my SAMSUNG-SM-G900A using Tapatalk

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I get it, I have card readers on machines myself.  The origins of this thread began as a question from a guy who had bought his first machine, an AP123, wondering if a card reader was the way to go.  I agree with all that you guys have said, I just didn't want a new operator thinking that every machine needs a reader, without doing the math and considering the potential of the machines location.  A 123 is a good size machine, hopefully it's going to a location that will kick butt, and with a card reader that pays for itself.

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That's a good point and I agree with you.  In my opinion, the best way to start out is with good machines and card readers in good accounts, but that's not always possible to do.  If the accounts aren't good, a card reader will eat up a lot of profits in an already difficult situation when you're new to the industry and expired products is a problem.

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Arkhuster.  I agree with you on what a card reader can do to sales, even at a small location, but I think you're being a bit generous.  So far, the going rate for increases seem to be in the range of 15-20% increase... so a location doing $40/week should expect anywhere from a $6 to $8 increase in sales per week on average.  Assuming 4.33 weeks in a month, you're adding $26-$35/month in additional sales, or about $12-$16 after COGs and card transaction fees.  Once a wireless fee is paid for on a leased basis, you're left with nothing.  In that situation, a leased card reader doesn't cost anything but it doesn't add anything either.  While there's nothing wrong with adding card acceptance when possible (in such an example), many machines in low-volume locations often aren't MDB compatible.  If that's the case, you may also need to pay for a board upgrade at a minimum.  All of this could change in the long-run as the card usage goes up as a percentage compared to cash, we can't expect actual sales to increase much at low volume accounts.  Having said that, I am already starting to upgrade locations that are doing at least 5k/year between snack and soda (combined).  I'm not doing it with the intention of adding profits.  Rather, I am doing it as a convenience to myself AND for telemetry.  I have found that the 5k/year locations in manufacturing sectors are difficult to keep optimal profits because the sales aren't very consistent and whether plays a big role in sales.  On larger accounts, readers are practically a must anyway but I care less about telemetry at the large locations and more about the added profits since I pretty much know what I will need before i get there.  As for accounts doing 2k or less, I have no intent on upgrading those unless they are an obvious choice (all young, no one carries cash, etc....).

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On 5/10/2017 at 1:35 AM, Sgolembiewski0903 said:

Great advice! DOes anyone on here have any stories about using a Blukey?

There are videos on line.  Very easy to install.

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Angry Chris

It adds convenience for your customer which creates customer satisfaction and loyalty, It also drives higher transactions and higher ticket items. With two-tier pricing, the fees are covered and the avg transaction amount goes up. Not to mention the efficiency gains of telemetry by reducing the labor and cash tied up in inventory, the reduced number of services & higher collects  per service. There is a much bigger picture than just the increase in sales that a card reader provides. A one man operation can do at least 20% more machines with telemetry and prekitting than without it. Think about what that does for a growing small operator or even the operator that isn't interested in growing but just making a living; 20% more is significant. 

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I agree with you regarding the benefits, I just don't think it's usually feasible on accounts where machines average  $40/week. If a card reader were the only added expense, then I think you're right. When you start replacing boards, I don't think new operators will ever get their return back.  Think about this: some MDB machines don't dex. Under those circumstances, telemetry loses a lot of its implicit benefits such as accurate pre kitting.

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I've upgraded machines just to add telemetry, not a card reader, and made them pay for themselves just based on efficiency gains. If I can stretch services from weekly to bi-weekly I cut my cost to service in half. With the use of a good VMS that helps me optimize machines cutting number of services in half is pretty easy. That alone pays for a UCB in a year. 

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Arkhuster. We agree on everything except the profitability. You and I can probably afford upgrades and take advantage of lease options. We can also get better equipment as we grow. A smaller and newer vendor might need every penny. I just don't think a machine doing $40/week will justify the expense in most situations.  Sure, if you have a vms, an actual delivery vehicle, and enough money to invest, then I definitely see your point. However, I don't think most operators are at that level. 

I don't know the numbers, but I'm betting the vast majority of operators out there have less than 10 machines.  I'm really only disagreeing with you in a general sense. I'm sure your numbers work for you and they might work for me as well. I am literally upgrading machines doing around those numbers, but that's because I feel I have the means to take advantage of telemetry. Let's not forget that pre kitting requires some type of facility where you can get your product. Even avan or garage will work, but some people are working out of their car.

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That raises an interesting board question. 

 

 

 

 

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