Cashless 101: Selecting the Right Cashless Card System

Wash operators no longer question whether or not credit card acceptance at their car wash will be profitable. In 2007 nearly every for-profit car wash is built with some degree of credit card acceptance from the start. Wide-spread acceptance of this form of payment is in large part due to it's many economical advantages. Credit card acceptance is more secure than cash, consumers spend more money per visit, and cashless acceptance reduces employee theft and equipment vandalism.

Is it time to make add cashless acceptance at my wash?

What keeps washes from accepting cards now?
Of the car wash owners that I interviewed for this article, I asked those that did not yet have cashless acceptance at their car wash for the reasons why they did not accept credit cards now. The initial answers I got were a combination of, "There are just too many options, I don't have the time to make a decision right now" and "It's expensive to buy the hardware, maybe when business picks up". It was not until later in our discussions that we really got to the truth of the matter. Wash owners, just like consumers will put off making a decision or find an excuse to avoid changing how things are. This is especially true when presented with too many options or they don't have the right information to make an informed decision. Either way, it is far easier to do nothing that it is to do something.

Teaching an old wash new tricks
My conversations with wash owners and operators that have cashless acceptance programs sing a different tune. When I asked the owner of Futura Carwash, Paul Taylor how cashless acceptance has impacted his business he said, "It has actually created more work for me because of the increased soap use and wear and tear on the building and equipment [because of the increased business], but this is a good thing! Paul informed me that after adding credit card acceptance to all of his wash bays and a machine that dispenses prepaid cards in his vending area he has consistently had his best months in 19 years of business for the past five consecutive months in a row!

All of the wash owners that I spoke with that added cashless acceptance to their older car washes had similar stories of how things really turned around for them. Younger card-carrying customers now frequent the wash, local businesses take advantage of commercial fleet programs, and wash customers spend MORE money per visit. One of the wash operators that made the switch to accepting cashless payment said to me, "It's never too late to turn things around if your willing to listen to the little voice in your head that knows you have to do something. Hoping for business to pick up and not doing anything to bring that business in is the definition of insanity right? When you do the same thing over and over again and keep expecting a new result". Wash operators have within their power to bring in new business and increase the spending from the customers they already have, it just requires changing up the status quo.

The cost of doing nothing
In the recent past I have been contacted by some really sharp business owners that were looking for ways to improve their business. In most cases they already knew the answers to their problems subconsciously, but needed to hear themselves talk through the thought process. These were conversations with wash owners that did not yet have a cashless acceptance strategy and knew they needed to do something about it.

I in our conversation I would ask, "So, after all that you have told me you know you need to do something. So tell me this... would you make more money at your wash if you accepted credit cards and perhaps loyalty cards?"

With no hesitation the wash owner replies, "Of course I would make more money, people WANT to pay with their credit card!" and as if it were magic, the wash owner realized they just vocalized what their subconscious has already been telling them.

Since they came to me for help I ask them, "So if you know you will make more money by implementing a cashless acceptance program, what is the impact of doing nothing right now?"

To which every wash owner has had to pause before they reply with, "By waiting, I suppose I'm losing potential revenue."


And at this moment the picture has been made clear. To drive business you must either meet your customers needs, or give them something they never even knew they were missing out on. Before ATM's consumers had to go to the bank to get their money, but the companies that made the first ATM's created a demand. The same goes for the first wash owners in town to add credit cards, prepaid gift cards, and commercial fleet programs at their car washes. By giving their customers MORE ways to spend money at their business their bottom line is increased. The cost of doing nothing is in lost potential-revenue and losing out on opportunities to bring in new customers before your competitors do.

Which Cashless Option is Right for Me?

Step 1: Evaluate the needs of your business
Since every car wash does business differently it is my first suggestion that car wash owners consider what their plan is to make their business more successful. Most wash owners can not answer this question because they have not seriously thought about it. Many wash owners have day jobs, other businesses, or other issues at the wash that demand their attention, so it is far easier to just do nothing at all. If cashless acceptance is one of those things your subconscious knows you need to look into it's time to listen to that little voice and start evaluating the needs of your business. Start by asking yourself some questions about your current situation and how you may be able to improve it. Now is not the time to worry about financing the project because the questions about money will only prevent you from properly evaluating your business goals. You may be surprised with what you come up with and the ideas you can generate when you broaden your horizons. And don't forget to write your thoughts, ideas, and goals down! Did you know that people that write their ideas and goals down are 80% more likely to do something about it?

Basic Cashless Evaluation Questions
All of these are a few of the basic questions to consider when deciding on the size and scope of the cashless solution you want to implement. Many wash operators are now in a position where they have old washes that need updating, rebuilding, or are planning retrofits to upgrade existing hardware.

Credit Card Acceptance: Are your customers asking you to accept their credit cards? If you have had any customers ask about credit card acceptance chances they are not alone. In 2006 payment by credit card outpaced payment by check in the United States and in several demographics payment by credit card already is outpacing cash sales.

Fundraisers / Organizations: Are you being solicited by local charity groups to run fundraisers through your wash? If you are being contacted by schools and organizations, realize that these same organizations are talking to your competition too! You need to be in a position to take their business before somebody else does. If you are known as the business that supports the location community, the local community will support you. Why is this important? If you do your research, you will find that a number of your cashless system options will offer tools for running highly lucrative and successful fundraiser programs.

Commercial Fleet Opportunities: Do you have local businesses that would make ideal business account customers? Many business owners will not issue credit cards to their employees, but would be more than willing to issue a fleet card to each of their drivers! According to Paul of Futura Car Wash the local businesses couldn't imagine washing any other way now that they have their fleet cards! He commented, "From the customers view point [cashless acceptance] has made it easier to wash their vehicles and keep track of spending [with the use of a his Fleet card program]". There are washes that end up with over 70% of their yearly revenue that comes from washing commercial vehicles alone.

Automating Time Consuming Processes: Do you currently cater to commercial businesses but need an easier way to manage the accounts you have? There are many car washes that have commercial business accounts but are still struggling with paper-based voucher systems, manually selling tokens and pre-selling token notes. These low-tech solutions are better than doing nothing, but they are inefficient and time-consuming which is preventing these businesses from taking their commercial fleet business to the next level and to higher profits.

Multiple Wash Locations: Do you have multiple wash locations that you would like to tie together under a single loyalty promotions program? One of the most successful ways to promote a loyalty gift program or commercial fleet program is by leveraging a single card that works at multiple wash locations. Systems that give multiple wash locations the ability to communicate offer a wide variety of financial savings as well. Running all credit cards through a single merchant processor means better rates and fewer statements. Managing a loyalty program from a centralized system provides for more accurate and convenient reporting which reduces administrative costs across the board.

Step 2: Evaluate your options
There are going to be car wash owners that are only looking to start small or take one step at a time in implementing changes to their car wash. This is completely understandable, especially for wash owners that are new to the industry. It is recommended to talk to other car wash owners that have already successfully implemented cashless solutions at their wash to get a better idea of what will work best for your business. When researching which cashless solution will be the best fit for your business it is very important to get referrals of existing customers from the manufacturer or distributor. By speaking with multiple wash owners that currently have the product you are interested in, they can answer all of the questions, concerns, and give you advice on how best to implement your cashless solution and make sure it is the right decision for your particular business.

Basic Options
Understand that there are dozens of cashless systems that you can purchase for your new or existing car wash. If you have identified what the needs are for your business and you have formulated a basic plan of how you want to generate additional wash income it is time to weigh your options.

Where to Accept Cashless Payment: Adding credit card acceptance to your equipment is going to be the easiest of the cashless solutions to implement. The decision will come down to whether you want to purchase a retrofit kit from your equipment manufacturer (if offered) or find a company that specializes in updating existing wash equipment to accept credit cards.

If you only plan to start small and add credit card acceptance to a single wash bay the basic dial-up retrofit kit is the most economical. The wash operators that I interviewed with the highest success rate with credit card acceptance found that adding card readers to every service at their wash set them apart from every other wash in town. If you plan to add cashless acceptance to more than a few bays you may want to consider finding a solution that will allow you to run all of your credit card acceptance through a single merchant account. This saves money on processing, statement fees, and reduces the number of phone lines required to processes standard dial-up authorization.

Dial-up Systems: The most common form of cashless authorization technology on the market is dial-up credit card batch processing. This is where the reader sends data to a "black box" which is connected to a phone line. The system dial's up to a batch-processing center to validate the information that it was given by the reader. Note that the actual transaction is rarely processed at this time because the batch processor is only verifying that the information captured by the reader matches known data formats of credit cards. This is to ensure that consumers can't swipe any random magnetic stripe card and purchase a wash. The batch-processor just makes sure that the card swiped resembles the data of a valid credit card or debit card. Dial-up processing is known as a "Good Faith Transaction". It is not until the accumulated card transactions of the day, week, or month are "processed" by the merchant in what is known as a 'batch'. This is when the card information is actually processed and money is deducted from accounts, funds transferred, and when cards would be declined for reasons of insufficient funds, reported stolen, or any number of other 'failure to authorize codes'.

Computerized Authorization: The fastest growing trend in the car washing industry is the prevalence of computerized systems.The modern computerized authorization systems now make use of broadband Internet connections to process the entire credit card transaction in a matter of seconds. Within 3 seconds of swiping a credit card the authorization system directly connects with the merchant processor, validates the card, checks for sufficient funds, and will immediately decline the service if the account does not have enough money or if the card has been reported stolen. Have you ever gone into a fast-food restaurant where they accept your credit card in a matter of seconds? All of the big fast-food chains have moved to a broadband computerized authorization system that saves them money on every transaction by reducing the instances of credit card fraud at the same time reducing the risk to the bank by authorizing before any services, food, or products are provided. This means lower rates for the business, faster through-put for the customer. Win-win.

To Fleet or Not to Fleet: If your feel that targeting commercial fleet business will fit well within your business plan it is critical that you make sure the system your buying has solid fleet management tools. The last thing you or your book keeper will want is to find that your fleet system (although profitable) turns out to be hard to use, time consuming, or difficult to manage. You have many options available to you on the open market that offer fleet management software solutions to make your job easier and more efficient. Many cashless solutions come standard with simplified billing, online reporting, and there are even cashless systems with built-in Quickbooks compatibility which eliminates all of the double-entry and busywork associated with most fleet management programs. There are many wash owners I interviewed that said that ease of use and good management tools makes or breaks whether they promote a commercial fleet program. Just remember one thing about any technology, you get what you pay for.

Fundraising Options: If you plan to run successful ongoing fundraising programs it is going to take more than tokens and wash vouchers to make loyal customers out of fundraiser supporters. Find a program that will track fundraiser sales and give you the ability to turn a one-time sale into an ongoing fundraiser and you will never doubt the power of loyalty and community support.

Step 3: Plan for future growth
It may sound simple, but when shopping for a cashless solution that meets the needs of your business be very sure that you are future-proofing your car wash with this equipment purchase. As your business grows and your business goals get bigger you need to be sure that your cashless solution will grow WITH your company.

A number of wash owners I spoke with told me that they purchased hardware to accept credit cards in their wand bays several years ago. At the time they only wanted to accept credit cards and only in those few bays. One year later the owners of the wash wanted to start selling Fleet accounts and add cashless acceptance to their vacuums, vending machine, and a pet wash on site. As it turns out that they never evaluated the software for managing Fleets which turned out to be difficult to use and very limiting. It also turns out they could not expand their cashless acceptance to other devices at their wash as they had wanted to. Owners like this have two options and neither option if favorable. Buy all new cashless acceptance hardware and software, or accept their losses and run a crippled commercial fleet program and do without cashless acceptance at their other services.

My advice to car wash owners that currently do not have cashless acceptance capabilities is to ask a lot of questions before you buy. It is important to understand the technology behind what you are buying. The technology behind your cashless payment system is just as important has the technology behind the equipment that washes customers vehicles. Far too many new wash operations cut costs from their payment acceptance solution when things go over-budget. Does it make sense to limit your business by reducing the number of ways you can take your customers money?
Posted on September 24, 2007 and filed under Marketing.