How Cashless Aceptance Got It's Start in the Wash Industry

“I bought my first car wash in 1989 in Saint Paul Minnesota and then City of Saint Paul decided they were going to tear up the entire length of the main road that my wash was on. I had a brand new wash and traffic through the wash was at an all time low once construction started. I was certain it was going to ruin me if I did not figure out something to drum up more business.”  -Dan Yarusso

Nearly every car wash operator has read an article or has seen a presentation on the benefits of accepting credit cards and loyalty cards. In fact there are dozens of equipment manufacturers that now offer built-in credit card acceptance and loyalty card programs. Car wash operators in 2007 can't swing a stick at a car wash trade show without hitting the latest cashless acceptance solution for the car wash. But how did cashless acceptance within the car wash industry all start?

The Origin of Cashless Card Systems in the Wash Industry
Eighteen years ago accepting credit cards in the bay was unheard of and loyalty programs were nothing like they are today. The concept of a loyalty program consisted of discounted tokens, token notes, and coupon books. Seventeen years ago the concept of card-based cashless acceptance in the wash bay was only realized and evangelized by one man in the wash industry while the rest of the car wash industry was content selling tokens, paper notes, and coupon books. You may remember seeing a guy at the Car Care Expo trade show in the early 1990's with a fish tank in his booth that had goldfish and a card reader in the bottom. The fish tank was to demonstrate the readers ability to work in “wet conditions”. That man with the fish tank was Dan Yarusso and he started a company back in 1990 called WashCard Systems. Based out of his garage in Hugo Minnesota, Dan started his business as a one man show. In a recent interview, Yarusso admits that WashCard was not invented in order to be sold to other car wash operators. In fact, it was created out of a necessity to market his own struggling car wash.

On the Road to Ruin
Dan recalls, “ I bought my first car wash in 1989 in Saint Paul Minnesota and then City of Saint Paul decided they were going to tear up the entire length of the main road that my wash was on. I had a brand new wash and traffic through the wash was at an all time low once construction started. I was certain it was going to ruin me if I did not figure out something to drum up more business.”

What Dan thought was was to be a profitable little side business when he bought the wash was quickly becoming a huge stress factor for Dan and his family. Dan spent nights and weekends at the wash keeping things in repair and doing whatever he could to keep his customers happy while the road construction in front of his wash dragged on. Unfortunately for Dan the construction project was encountering many delays and his business was on the verge of failing if business did not increase.

Pet Peeve Leads to Inspiration
Yarusso’s full time day-job was working for a company that designed access control technology for security systems. It was with this knowledge of access control technology that gave Dan an idea how to fix a pet peeve of his. Dan hated carrying pockets full of tokens around just so he could wash down his self service bays and wash his own vehicle. After weeks of tinkering he had wired in waterproof access card readers into each of his bays. The readers were wired into programmed control panels in his equipment room that were then wired into the bay timers. For each swipe of an access card the system was supposed to simulate coin drops and add time to the meter just as if cash or tokens had been used. In theory, each swipe of the card would add more money to the timer without having to dig for more coins in his pockets in the middle of a wash.

Eureka! The Big Breakthrough
oldwashcustomer.jpgIt was late one weekend when Dan finally got the system working. He was excitedly running around from bay to bay sliding his card adding money to the meter. After turning all of the bays on he would then would run back into his office to check his results.  Dan could verify the bay activity on the black and green terminal monitor that sat on his desk which displayed each card swipe, time/date stamp, and associated dollar value.

With all of the running around from bay to bay it did not take long before a customer got curious approached Dan to ask him what all of the commotion was about. Dan recalls that he was perhaps a bit overly excited as he motioned the customer into the bay and explained, “Ok, so I take this card and slide it through the reader... and now the bay turns on just as if I added coins into the acceptor! When I slide the card again it adds more money to the timer! I have a screen in my office that records the wash so I can track any washing that either myself or my employees do with this card. Sure beats giving employees tokens to wash down the bays and since the first thing they do when they get in and the last thing they do when they leave is wash down the bays, it’s a time clock too!”

The customer standing in the bay listening to Dan was perhaps a bit overwhelmed by all of the enthusiasm. Dan recalls that the customer just stood there for a few moments before he said anything and just rubbed his chin in contemplation. He looked Dan in the eye and then said, “Thats REALLY cool. So if you can track each card use for employees how do I get one of those cards for myself??”

As if realizing something for the first time Dan motioned for the customer to wait just one minute.

Dan ran back into the office with a huge grin on his face and entered a new card into the system. It was then that Yarusso got his first card customer! He took a black marker and drew an arrow on the card to indicate the direction in which to slide the card through the reader with the hand printed word ‘SLIDE’ across it’s length. He handed the card over to the customer with satisfaction. They agreed to settle his bill on the first of every month for any washing that he or his family did using the card.

Customers Know a Good Thing when They See it
Several weeks later the same customer that got the first customer card came back with friend and he too wanted his own washing card! This time Dan ran back to his office and returned with the another card marked with the arrow indicating it's use and the new customer asked, “My buddy told me about how he washes without needing tokens, that is SO great! So what do you call it anyways?”

Dan pondered for a moment and with his magic marker in hand wrote two words that would forever impact the car washing industry.

“I don't know... I guess it's a Wash Card” he said as Dan happily wrote the letters on the front of the plain white card before handing it over to his newest customer.

Success is Setting Yourself Apart from the Competition
It did not take long for Dan to realize he had something that no other car wash could offer to their customers.  At first Dan spoke with friends, family members, and business owners in his immediate area and got them set up with their own account cards. He eventually went to the local police departments and small businesses in the area and got all of their washing business which carried him through the remaining period of road construction. He approached anybody that would be interested in having an “account” with the local car wash. Within no time he had  six local police and sheriff departments on account and WashCard and was soon catching the eye of other local car washes. The first few washes in town that approached Dan asked if he would build them a card system of their own. He politely turned them down as it was the only thing that allowed his car wash to maintain a competitive advantage over any other wash in town. “Why would I give them the ability to directly compete with me?” remarks Dan. “Once somebody had my WashCard they would never even consider washing anywhere else even if it meant driving to the other side of town.” What experience had shown is that a business that used to buy $50 dollars in tokens or token notes a month would invariably double or triple their monthly washing expenses when they were put on an open invoiced account with a card.

It did not take long before word spread about the “wash with the cards” and wash owners from out of town offered Dan good money to build them their own card system. Eventually he agreed to build and install WashCard systems for several other car washes throughout Minnesota and Iowa.

Taking the Show on the Road
tradeshowAs interest in cashless payment systems would start to catch on Dan Yarusso had some difficult decisions to make. He could either keep his full time job and continue selling WashCard locally on the side or he could take his “idea” on the road. According to Dan, in retrospect the decision was an easy one to make. He then spent the better part of ten years traveling to numerous trade shows with his card readers telling car wash owners about the profit building potential of adding a card system to their car wash.
Imitation is the Highest Form of Flattery
With the success of so many car washes that attributed substantial increased profits to their WashCard System it was inevitable that competitors would appear on the market. As it turns out existing customers of WashCard felt so strongly that a cashless car wash system was a great idea that they decided to build and sell systems of their very own such as Express Key and eWash. These companies became the first competition for WashCard in the cashless arena. The notion of replacing dirty tokens with cards, keys, and bar codes swept through the car wash industry since consumers were demanding such conveniences at the car wash. The real challenge for these cashless pioneers had nothing to do with convincing consumers of the value, it was the car was owners that took some convincing in those early years of cashless adoption.

The Status Quo of Cashless Payment Systems
As of today the number of cashless payment solutions has skyrocketed as result of demand from consumers to use their credit cards or put their commercial vehicles on account at the car wash. Consumers get to use their plastic to pay for gas and groceries, why not soap and water for their cars? By finding a solution that caters to both the consumers desire for credit card acceptance and the ability to offer commercial fleet accounts is a sure fire way to take advantage of how potential customers are looking to spend their money in 2007.

These days it is just as important how customers can spend their money as it is where they can spend their money. If your wash business is not catering to the hundreds of thousands of card-carrying consumers you are losing money every day in potential profits. Credit cards and gift cards in the United States has change how consumers spend money. The “buy-now, pay-later” mentality of credit cards increases the dollar-per-ticket earnings of every wash and prepaid loyalty gift card sales increases customer visits by a factor of x2.5 times a month!” At the rate in which payment-by-credit card  is rapidly growing, wash owners that do not capitalize on credit card and loyalty card acceptance solutions now will feel the impact of their missed opportunity in years to come.

The Future of Cashless Payment Systems
Based on the current consumer trends is clear that in the near-future cash sales will no longer be the mainstream form of payment by the majority of your customers. Saving cash receipts and passing out tokens will recede into the past as more business owners with company vehicles have the capability to run their own activity reports and manage their employees and pay their car washing invoices online. Purchasing and managing car washes is now just as secure as online banking. Those businesses that fail to embrace this level of customer convenience will find themselves with a problem far worse that road construction on their main road. Car wash businesses that fail to make changes to their business today will see their customers going to the competitor that offers them a loyalty card or simply accepts their credit card.

It is clear that advances in technology will be playing a large role in how businesses such as a car washes will be operated in the coming years. There are now car washes that have CEO's and influential investor groups funding continued growth of their company. It is more important now than ever for individual wash owners to re-evaluate how they are conducting business today. The car wash industry is full of new technologies and new solutions to bring in new business and maximize the business that you already have. Ask your sons, daughters, nephews, and grandkids how they pay for goods and services today, I can tell you now that they do not pay with cash. Will your car wash business struggle or will it thrive when these card-carrying customers become your primary demographic as they get their own vehicles?
Posted on December 7, 2007 and filed under Marketing.