02 Jun 4 Reasons Why Card Readers Have Remarkable ROI
The adoption of card readers in vending is exploding – the number of vending machines that accept credit and debit cards has hit 15%, the highest percentage ever recorded. Why are operators buying them in bunches? Well, operators report that cashless readers not only product a sales lift, but increase customer satisfaction. Furthermore, operators that have adopted card readers rate it as their best investment when it comes to ROI.
When it comes to results, the proof of card readers’ value is in the numbers. A study of machines equipped with Parlevel Pay in San Antonio Texas showed that card readers increased average machine sales by 42%. But how exactly does going cashless increase machine sales? Of course credit cards are being more commonly used, but is that the full explanation? Here are 4 reasons why card readers have a remarkable ROI and can help an operator’s bottom line:
1. Serve more potential customers
Carrying cash is becoming less and less common as many people favor credit or debit cards. Consumers around the world made a total of 417 billion cashless payments in 2014 – an increase of 34% since 2010. So, cashless is clearly growing. Also, only 14% of American consumers use cash for everyday purchases. Furthermore, Only 9% of Americans prefer to use cash, while 78% prefer to use a credit or debit card. Customers actually prefer to use cards, so offering that option will increase customer satisfaction.
Offering only cash or coin options in a vending machine is ignoring the huge number of potential customers that don’t carry cash or prefer not to use it. Why shrink your customer base? As cashless use grows and grows, products and services that only accept cash will continue to suffer. Opening up a vending machine up to cashless payments expands the base of potential customers and keeps an operator from missing out on sales. The more potential customers you can service, then the more potential money that you can make.
2. Make it easier for your customers to pay
While more and more consumers are using credit cards due to their general convenience, there are some interesting effects of using plastic. Paying for any purchase produces an immediate pain of paying. However, this pain differs depending on payment method. As a result, consumers spend more money when they pay with plastic as opposed to cash – and this had proven true in vending.
Not only do average transaction amounts increase due to card readers, but there are more transactions as well. Studies show that card users are more inclined to make impulsive purchase decisions, which is particularly effective for vending – impulse and convenience are main drivers for customers to use vending machines in the first place. This translates to much higher total sales in machines with card readers. In a study of machines connected to Parlevel’s system, machines with card readers sold 38% more total units per month than those without it. So if you are looking to increase sales on a pure quantity basis, installing a credit card reader will help.
3. Multivend card readers – sell more items per transaction
So how can an operator capitalize on the convenience of card readers even further? How about letting a customer purchase multiple items in one transaction? When a customer pays with cash, they insert the amount of money for their transaction, pay, and receive their item. If they want another product from the machine, they have to repeat the process over again – insert, pay, receive. Not very convenient.
Cashless readers with multivend, on the other hand, allow customers to select multiple items with one transaction. Instead of requiring multiple steps to purchase multiple products, customers can swipe once and receive multiple products. Furthermore, the screen on the card reader actually prompts the customer to make another selection after choosing their first product. This quick persuasion can be enough to inspire a customer to buy multiple products from a machine.
How effective is multivend? In a study of Parlevel Pay cashless devices, the readers that have multivend enabled have sales that are 62% higher than those without it. Vending is all about convenience. The convenience of multivend translates to a significant sales increase, so make sure your card readers have that option available.
4. Help your customers pay the way they want
While credit and debit cards are the predominant cashless payment method that customers use, it is far from the only one. Campus cards, mobile payment like Apple Pay and Android Pay, and even cryptocurrencies are some other popular cashless payments out there, and they’re only growing. In 2016, 4.8 billion individuals had mobile phones and 39% of all mobile users in the US had made a mobile payment in 2015. To put it lightly, cashless readers that only accept credit or debit cards simply don’t cut it.
For an operator to truly maximize sales with a card reader, they need to maximize the amount of cashless payment methods they can take. Vending is all about convenience. If you ignore the most convenient way for someone to use your machine, then they will be less likely to use it. What if you have a machine in a gym, and one of your potential customers forgets his wallet in his car? They might forfeit their purchase because they don’t want to walk back to the parking lot. But if that machine accepts mobile payments, they can fire up Android Pay or Apple Pay on a mobile device, and can continue on with the transaction – keeping you from missing a sale.
You’ve probably heard that cashless readers can increase machine sales, but now you know four of the biggest reasons how they achieve this. A larger consumer base, increased convenience, multivend, and increased payment methods all combine to produce a massive boost to machine sales. So if you are looking to add technology to your vending operation, card readers are a great place to start.