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Card carrying customers

October 11, 2010
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Consumers are converting from cash customers to card customers in record numbers.

As the consumer driven economy is flooded with private label credit cards and gift cards, carwash owners need to adapt their sites to the new payment methods to retain their clientele.

Credit card acceptance: Pros and cons

The rampant proliferation of credit card acceptance throughout the business world has prompted carwash owners to offer credit cards at their sites in order to compete. However, credit card theft and fraud has the potential to eat into profit margins.

As a result of credit cards being offered nearly everywhere, consumers possess a greater freedom in how and where they can spend their money.

As consumer benefits increase with credit card acceptance, so do the associated risks for the businesses that accept credit cards.

Fraudulent credit card claims skyrocketed to $678 million in 2004. Nearly 80 percent of the claims associated with stolen credit cards and fees linked to insufficient funds could be prevented if more businesses made use of the latest in credit card clearing technologies.

Wash owners must also recognize the risks associated with offering credit card payment options as well as the benefits.

They should also utilize the technological advances that continue to expand security features related to this option.

Sometimes even the safest route isn't so secure

Carwash owners must be aware of drawbacks to any credit card solution they implement. If a wash does not currently have credit card acceptance, a common answer is a credit card to token machine.

On paper, this solution seems to cut the cost of retrofitting existing equipment in the bays or on an entry system. It is the unforeseen costs involved with credit card fraud that have relegated this solution to a last resort.

In hindsight, many owners point out that by giving thieves the ability to use a stolen credit card at a token machine they can easily empty all the untraceable tokens without even resorting to breaking anything.

Not only are the carwash operators out hundreds of dollars worth of tokens, but now the bank wants to collect money and charge back fees.

Local police claim that, many times, thieves sell the stolen tokens to innocent people who then redeem them for wash services.

This leaves owners out the cost of the tokens, liable for the charges made on the stolen card and supplying free washes that were never paid for.

There is a solution for owners and operators to protect themselves from this type of theft.

Either limit the credit card purchases to a one-time service, such as the use of a wash bay, or be sure that the vending unit is dispensing something that can be tracked and deactivated in the event of fraud.

Is it worth it?

The problem that some operators run into when they order a credit card acceptance system is that they don't see a huge rise in revenues to offset the cost of the system.

The addition of a straight credit card system only prevents an eventual loss in revenue; other wash locations that offer credit cards acceptors absorb a percentage of the credit card business as well.

Many operators have also noticed that a large portion of their credit card sales comes from customers who would have used cash had the credit option not been available.

However, one drawback is that a credit card system throughout the facility doesn't typically promote customer loyalty, but it does provide a convenience to the growing population that prefers to pay with a credit card.

An alternate card option

Wash owners who wish to capture the business of card carriers and still keep them and the rest of their cash customers coming back for repeat business utilize the best of both worlds by offering alternate payment methods.

Major retailers have been offering gift cards for a decade now and the sale of gift cards has risen to the top selling item in the holiday seasons of 2003 and 2004.

Nearly every person in the US has used a gift card with a prepaid balance that could be redeemed for products and services.

There are also products and equipment available within the carwash industry that can sell prepaid cards/keys/or codes through a machine that accepts both cash and credit cards.

This type of system caters to both the impulse buyer and the bargain shopper by offering loyalty benefits for prepaying.

The benefits can vary— such as bonus wash dollars or discounts on services.

In addition, this type of system can convert a single credit card transaction into a card or key that can now be redeemed without transaction fees or the need for cash, tokens or paper vouchers on future purchases.

Many of these systems also allow the end user to add more value to their card/key/code through the same dispensing machine or even on their computers via the Internet.

Do your homework

While researching this type of credit card-compatible loyalty system, it is important to ask the following questions that may not come up in the sales pitch:

  • Can I deactivate a card/key/code that is fraudulently purchased with a stolen credit card?
  • Does the system track which card/key/code is sold with each transaction?
  • Is there a limit to the number of cards/keys/codes that can be in the system at any given time?
  • Does the system offer post-paid fleet accounts as well as pre-paid gift card sales?
  • How is the transaction data stored/retrieved? Is this automated or does it require on-site visits?
  • Is the transaction data backed up in the event of hardware failure?
  • Does the system batch the credit card transactions?
  • Does the system require additional phone lines to clear credit cards?
  • How much do the loyalty cards/keys cost per unit? What about customization?
  • How does the system handle upgrades and feature adds? Do I need to pay for these upgrades?
  • How flexible is the system in terms of offering discounts or running promotions?
  • How much development has been done to enhance the system since it launched and are there future plans to continue innovation on the product?
Opportunity for success

Many carwash owners and operators have found that the costs associated with purchasing an alternate payment program can be daunting, although the long term gains heavily outweigh the upfront costs.

Some carwash owners decide that they have enough business and only wish to appeal to the one-time sales associated with credit card use at the bay.

Other owners see these payment alternatives as an opportunity to offer credit card acceptance alongside a strong incentive program to build customer loyalty.

By offering gift cards and post-pay accounts for commercial vehicles, carwash operators can now implement a hybrid system that offers the best of both worlds.

Ryan Carlson is the project manager of WashCard Systems, a company providing credit and debit-card technology to the carwash industry. For more information Ryan can be reached at

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