Does Pepsi/Coca Cola even want my money at all?
January 12, 2010 12:01 PM Subscribe
Why don't vending machines take debit or credit cards?
With the success of things like redbox, and the proliferation of plastic acceptance all over the place, cash is increasingly rare when it comes to the pockets of the general population. And yet, too many times I've desperately wanted a coke or a bag of chips only to realize that the vending machine demanded some sort of dollar bill or coin as opposed to my perfectly good debit card. Why is this?
With the success of things like redbox, and the proliferation of plastic acceptance all over the place, cash is increasingly rare when it comes to the pockets of the general population. And yet, too many times I've desperately wanted a coke or a bag of chips only to realize that the vending machine demanded some sort of dollar bill or coin as opposed to my perfectly good debit card. Why is this?
Vending machines that take plastic do exist, but I haven't seen many. I'll wager that the combination of the expense involved in upgrading and the likelihood of the card readers needing repair outweigh the added business from accepting cards.
posted by Faint of Butt at 12:06 PM on January 12, 2010
posted by Faint of Butt at 12:06 PM on January 12, 2010
However there are vending machines that take credit cards - many airports have vending machines that sell iPods. Those take credit cards.
posted by GuyZero at 12:06 PM on January 12, 2010
posted by GuyZero at 12:06 PM on January 12, 2010
Also I would imagine a not-insignificant number of vending machine owners consider "cash only" income to be a distinct advantage of operation.
Interpret that as you will.
posted by jckll at 12:11 PM on January 12, 2010 [4 favorites]
Interpret that as you will.
posted by jckll at 12:11 PM on January 12, 2010 [4 favorites]
They do exist. You just haven't seen them.
They aren't very popular for many of the reasons listed above.
Additionally, a lot of machines take other types of cards. For instance, on my campus most of the vending machines take student IDs. I've seen that in other places with other types of IDs.
So yeah they exist you just need to search harder.
posted by lucy.jakobs at 12:11 PM on January 12, 2010
They aren't very popular for many of the reasons listed above.
Additionally, a lot of machines take other types of cards. For instance, on my campus most of the vending machines take student IDs. I've seen that in other places with other types of IDs.
So yeah they exist you just need to search harder.
posted by lucy.jakobs at 12:11 PM on January 12, 2010
An article from an industry mag: Experts Review Progress In Cashless Payment
The convergence of lower-cost, more powerful wireless networks, higher vend prices and enhanced computer-based auditing is encouraging the installation of credit and debit card payment systems in vending machines.posted by smackfu at 12:11 PM on January 12, 2010
…
Concerns that have slowed acceptance of “open” cashless payment systems by operators include the costs of remote communication, the fee charged for processing every transaction, and the need for security.
…
The hardware cost tends to average $350 to $500 per machine; communication expense comes in at around $10 per month. Processing fees absorb about 5% of revenues.
Another thing that hasn't been mentioned is that credit card processing needs some amount of security hardening. Guarding against the risk of someone subverting a vending machine, which will mostly operate unattended, for unauthorized charges or stealing credit card data must play a part in increasing the cost past the point where this makes sense.
posted by Dr Dracator at 12:17 PM on January 12, 2010
posted by Dr Dracator at 12:17 PM on January 12, 2010
I've seen them at the Home Depot. I think it's just an issue of needing a lot of money upfront to get a low interest rate on the transaction. It's the same reason a lot of Mom and Pop stores either have minimum credit amounts (which is technically not allowed) or cash discounts.
I've used them. It's not much more time than cash, considering that you don't need time to count out quarters or find dollar bills. I'm assuming they leverage an internet connection from the store, as the connection is very fast, not like a phone line to a bank.
posted by mccarty.tim at 12:19 PM on January 12, 2010
I've used them. It's not much more time than cash, considering that you don't need time to count out quarters or find dollar bills. I'm assuming they leverage an internet connection from the store, as the connection is very fast, not like a phone line to a bank.
posted by mccarty.tim at 12:19 PM on January 12, 2010
Out of curiosity, if a vending machine got fitted with a skimmer, would the owner of the vending machine be held liable for not keeping his property secure?
posted by mccarty.tim at 12:21 PM on January 12, 2010
posted by mccarty.tim at 12:21 PM on January 12, 2010
I've seen soda machines that accept cards. The ones I've seen, though, either overcharge the sodas (probably to make up for the added expense) or don't list the price on the machine at all. I imagine both of those lead to lower vending-machine sales and thus decrease overall demand.
Additionally, I'm not sure vending machines need replacement very often, so there's no reason to upgrade - I don't know the typical vending machine lifespan, but I see 20-year-old machines that work fine.
posted by Metroid Baby at 12:22 PM on January 12, 2010
Additionally, I'm not sure vending machines need replacement very often, so there's no reason to upgrade - I don't know the typical vending machine lifespan, but I see 20-year-old machines that work fine.
posted by Metroid Baby at 12:22 PM on January 12, 2010
In the States, the answer is processing, or interchange fees, and the cost of upgrading the machine.
Another from '08:
posted by zamboni at 12:26 PM on January 12, 2010
In the world of micropayments, processing fees remain a large issue that has set the retailer against the processing company. In the case of larger, more traditional sales, the processing fees remain a small percentage of the total that the retailer can easily absorb. It’s when those price points decrease to just $1 or $2 that processing fees become a larger factor.
A debit or credit card sale made from a vender is similar to that of a retail location. A consumer makes a purchase and the payment is processed through the operator’s bank and the bank that issued the card, both of which add on a transaction fee to the seller or operator. These fees, known as interchange, are based on Standard Industry Code (SIC) or Merchant Category Code (MCC). Unfortunately, at the present time there are no codes specific to the coin-op industry.
Another from '08:
The hardware cost tends to average $350 to $500 per machine; communication expense comes in at around $10 per month. Processing fees absorb about 5% of revenues. And it has demonstrated that the principal challenges are installing the readers and negotiating the transaction fees.
posted by zamboni at 12:26 PM on January 12, 2010
The only place I've seen these regularly are in hotels - likely where the markup is such that any fees that exist are far outweighed by the profit margin.
posted by bitdamaged at 12:38 PM on January 12, 2010
posted by bitdamaged at 12:38 PM on January 12, 2010
I use these all the time at Union Station in New Haven, CT - even several of the soda machines on the outdoor platforms take plastic. However the farthest platform doesn't, and I've wondered if it wasn't an issue with getting the data connection needed for card validation that far from the station proper.
That being said, I think I'm in the minority of folks using the card swipes, just from watching other people buy sodas or snacks.
posted by pupdog at 12:39 PM on January 12, 2010
That being said, I think I'm in the minority of folks using the card swipes, just from watching other people buy sodas or snacks.
posted by pupdog at 12:39 PM on January 12, 2010
On my cross-country train trip I saw these in Minot, ND - soda and snack machines alike.
As we had ten minutes of smoke-break there, and there was no good location like a 7-11 nearby enough, I indulged in a bunch of root beer and a Dew.
posted by mephron at 12:42 PM on January 12, 2010
As we had ten minutes of smoke-break there, and there was no good location like a 7-11 nearby enough, I indulged in a bunch of root beer and a Dew.
posted by mephron at 12:42 PM on January 12, 2010
My brother works on machines (not traditional vending) that function similarly to the Redbox. They are really struggling and he absolutely hates his job because of them. The machines are expensive to purchase, require an internet connection and/or phone line and if one breaks down HE's the one that has to drive across two states to fix it because it's not just something they can hire a man-off-the-street to maintain. Some of that is due to the fact that they have a computer interface in addition to the credit card scanner, but the point is that maintaining that machine requires more from the tech than just a key and bag of money.
posted by bristolcat at 12:51 PM on January 12, 2010
posted by bristolcat at 12:51 PM on January 12, 2010
They do, in Europe.
That is, your debit card, student ID, or what-have-you has a chip on it (it's called a Quick Card in Austria) which you can load money onto out of your debit account at any ATM. You can then use that money to buy soda, candy, beer and cigarettes at vending machines, the card also serving as an age check to make sure you're 16 for the beer and cigs.
posted by dunkadunc at 1:13 PM on January 12, 2010
That is, your debit card, student ID, or what-have-you has a chip on it (it's called a Quick Card in Austria) which you can load money onto out of your debit account at any ATM. You can then use that money to buy soda, candy, beer and cigarettes at vending machines, the card also serving as an age check to make sure you're 16 for the beer and cigs.
posted by dunkadunc at 1:13 PM on January 12, 2010
Data point: They exist in both Australia and New Zealand, though they are not ubiquitous. They tend to be in very busy and or secure areas, eg Melbourne's Southern Cross Station. They also take notes as well as coins.
[grumble] We were promised Student ID access to machines in the late 90s, but I don't think this ever eventuated (at least in NZ) [/grumble]
posted by Suspicious Ninja at 1:49 PM on January 12, 2010
[grumble] We were promised Student ID access to machines in the late 90s, but I don't think this ever eventuated (at least in NZ) [/grumble]
posted by Suspicious Ninja at 1:49 PM on January 12, 2010
Some college campuses have vending machines that take their student ID/debit cards (for example: UCLA - every vending machine on campus takes the Bruin Card which functions as a student ID that one can load money onto)
posted by majikstreet at 1:59 PM on January 12, 2010
posted by majikstreet at 1:59 PM on January 12, 2010
The Coke machines, outside World of Coke (it's like a museum devoted to Coca Cola) in Atlanta take credit cards. I've never seen them anywhere else.
posted by exhilaration at 2:04 PM on January 12, 2010
posted by exhilaration at 2:04 PM on January 12, 2010
They have these at my office. I suspect they're not popular just because they're not as profitable for the vendors. The revenue from extra people who wouldn't have bought if they had to scrounge up quarters do not, apparently, balance out the equipment costs and card fees.
posted by decathecting at 2:07 PM on January 12, 2010
posted by decathecting at 2:07 PM on January 12, 2010
We have them at my office as well. They have antennas on them to process the cards, so they don't need a phone line. I think the key is that they are in a more controlled environment (our office building) and not just in some random store or other location. This somewhat mitigates security issues mentioned above (like skimmers) and also probably helps reduce the amount of problems you might have with general consumers (cards not working, chargebacks, etc). The only problem I've seen with them is that some of ours our so far inside the building that they don't always get a good connection to be able to process the card, so they don't always work.
posted by CMcKinnon at 2:23 PM on January 12, 2010
posted by CMcKinnon at 2:23 PM on January 12, 2010
I have seen them starting to show up around here (Ottawa, Canada). The first place that comes to mind is Costco. I thought it had something to do with the new MasterCard chip thingy.
posted by Abbril at 2:27 PM on January 12, 2010
posted by Abbril at 2:27 PM on January 12, 2010
Our college campus has all the vending machines rigged up with card readers, but it's a fairly reliable bet that one will be down at any given moment.
posted by dervish at 2:46 PM on January 12, 2010
posted by dervish at 2:46 PM on January 12, 2010
Much like dervish, my campus has soda machines (but not snack machines) with card readers for student IDs and (sometimes) credit cards (some are swipe and some are only touch to pay). But they're usually out of order.
posted by anaelith at 3:52 PM on January 12, 2010
posted by anaelith at 3:52 PM on January 12, 2010
I recently was an office manager for a vending machine company and we had about 4 of those machines. Here's a little breakdown of what happened at that company:
1) We had to actually buy the machines. Typically with Pepsi and Coke, they're "rented" so if our maintenance guy cant fix it then Pepsi or Coke will send out someone. If these breakdown, only their company can fix it.. and we had to pay. They broke down a lot.
2) The companies we put them at had to agree and had to have a large employee base (more than 200). Many companies said yes.. until they broke down so much. Then I got a lot of angry calls.
3) We had to raise the price of everything to counteract the credit card fees. The machines we had would charge $5 - $20 as a credit and then that transaction would be "stored" in their fingerprint.
4) They didn't do as well as predicted.. people weren't buying much from them. Maybe they didn't trust the machine, the credit card scan, or the products inside were lousy (I got some stories that would make your skin crawl and never make you buy vending ever again)
That's my take on it. I know more and more machines like that are coming out.. but vending machines aren't as profitable as some might seem. It really depends on the area, the vending company, and their client base.
One more thing.. those machines were mostly snacks and some non-soda drinks. Pepsi and Coke had not given permission to put their products in.
posted by czechmate at 4:32 PM on January 12, 2010
1) We had to actually buy the machines. Typically with Pepsi and Coke, they're "rented" so if our maintenance guy cant fix it then Pepsi or Coke will send out someone. If these breakdown, only their company can fix it.. and we had to pay. They broke down a lot.
2) The companies we put them at had to agree and had to have a large employee base (more than 200). Many companies said yes.. until they broke down so much. Then I got a lot of angry calls.
3) We had to raise the price of everything to counteract the credit card fees. The machines we had would charge $5 - $20 as a credit and then that transaction would be "stored" in their fingerprint.
4) They didn't do as well as predicted.. people weren't buying much from them. Maybe they didn't trust the machine, the credit card scan, or the products inside were lousy (I got some stories that would make your skin crawl and never make you buy vending ever again)
That's my take on it. I know more and more machines like that are coming out.. but vending machines aren't as profitable as some might seem. It really depends on the area, the vending company, and their client base.
One more thing.. those machines were mostly snacks and some non-soda drinks. Pepsi and Coke had not given permission to put their products in.
posted by czechmate at 4:32 PM on January 12, 2010
I've seen lots of those, but the card reader is always broken/out of service. Maybe that's another reason they aren't as popular as they might be.
posted by ctmf at 5:51 PM on January 12, 2010
posted by ctmf at 5:51 PM on January 12, 2010
The Randall's grocery store near me has a credit card swipe attached to its Coke machine. (Despite this technology, this store remains the dumpiest supermarket in central Austin.) I ran out of currency once and resorted to using a credit card. I was worried it would charge a processing fee, but it showed up on my bill as an even $1.
posted by spamguy at 7:00 AM on January 13, 2010
posted by spamguy at 7:00 AM on January 13, 2010
Another reason why this often isn't necessary, is that a lot of places that have vending machines also have ATMs. No cash? Just go to the ATM and then go to the vending machine. Of course, you might have to pay ATM fees, but (generally) every time a plastic card is involved, somebody somewhere is paying extra for it.
posted by Vorteks at 1:12 PM on January 29, 2010
posted by Vorteks at 1:12 PM on January 29, 2010
This thread is closed to new comments.
posted by GuyZero at 12:05 PM on January 12, 2010