Most laundromats (and lots of other locations) operate a change machine. I’m assuming they’re mostly rented or leased. Does the laundromat get a cut of the bills inserted into the machine? Is there a standard cut?
You do realize that there’s an exactly 0% profit margin on these, right? (The old joke about the one machine in Vegas that always pays off comes to mind).
The bill changers are probably just as likely to be leased as the washers and dryers and if they are it’s probably just a regular old x per month payment. It’s not like a vending machine where the guy has to come around and restock them-- the laundromat’s got quarters on hand!
All the laundromats near me have gone to a card system. The card machine takes the money and electronically logs it onto the cards. There’s a $3 charge to buy the card. They used to be free. I guess this is incentive to not misplace the things and get two, three, or four going.
Those machines are all serviced by First Citiwide Change Bank.
The cut is, the laundromats customers will feed those quarters into the washers and driers. They are a service necessary to run the business, like lights or garbage cans.
In a similar vein, how abut ATMs? Our condominium complex had two ATMs from different banks, until they were both removed because the banks said they weren’t making enough money off of them. Huh? How do you make money from an ATM? I thought they were just there for you to pull out some cash from your account, although it is true you can pay certain bills via them.
You don’t pay any charges for using out-of-network ATMs? I’ve seen charges as high as $3 per transaction, in addition to whatever your own bank might charge you.
No, there are no charges unless you’re accessing a network outside the country, which is not that often except maybe in tourist areas. You can use other banks’ ATMs freely.
Actually, maybe that is it. There are a number of foreign residents in this complex – four 36-story towers grouped together – so maybe they were hoping to cash in on foreign transfers. But this isn’t a hotel, and just about anyone living here is going to have a local account.
At the library the change machines are bought and paid for, and we (well, not we, the finance office) have to fill them. It’s a huge problem because we need one that gives nickels.
I’m having a lot of trouble making sense of the OP’s question. As has been pointed out, change machines make 0% profit. So why would any change machine company install and maintain a change machine that does not make any money, and then take a further hit on this net loss by giving the laundromat a cut of the inserted bills?
There are two sides to an ATM transaction if it’s not your bank’s ATM. Some banks will not charge their own customers if they use another bank’s ATM, but the other bank will usually impose a fee of a couple of bucks. (I think that many ATMs are not operated by banks at all, not sure what the laws are on that.)
The OP assumed the machines were leased, so the company that owns them makes their money on that. No reason for the laundromat to demand a cut, though, since the machine is strictly break even.
But if I owned a laundromat, I wouldn’t pay someone else to come out and restock the change machine, I’d do it myself. The lease would be cheaper if they only had to come when the machine was broken, and I wouldn’t have to lug bags of quarters to the bank. Win-win.
When I owned a laundromat back in the dark ages, we owned all the machines. Washers, dryers, and bill changer. We leased the space in the buiding. That was the industry standarad business model.
The coins pretty much just cycled back & forth between changer & washer/dryer, and our income was emptying the bill changer & taking the currency to the bank.
In any business, you can outsource some or all of the operation. Outsourcing is much more prevalent now than it was 30 years ago.
I imagine today I could hire a company to do 100% of the work at the 'mat and just send me a check every month. Or I could lease some or all of the machines.
If I leased the coin changer, it would probably be for a flat monthly fee. If there was any variable component to it, they’d charge a bit more based on volume since a high-use machine requires more refilling / emptying and more maintenance from wear & tear.
All of these things are cost/benefit trade-offs. Can they do the job so much more efficiently than I can that I can pay their profit & still come out ahead? Leasing is really just another form of financing. What is the effective interest rate & what is my availability of capital via loan versus lease?
Heck, I might be willing to outsource 100% of it & just get a check every month even if they were eating 50% of the gross. Provided that freed me & my time up to do something even more valuable. Like open 10 more.