According to Lewis, tokens got a bad name because about 20 years ago there were problems with slugs and electrical mockouts. But current recognition systems on coin mechanisms have eliminated that. Now the mechanisms are based on thickness, diameter and metal composition. "And the interesting thing about tokens," said Lewis," is they actively try to make no token the same size as a U.S. coin."
As for bills, the special ink used makes them secure. "The security ink is not available on the street," said Lewis, "and it's very expensive."
Cashless offers a new payment option
Security from internal theft is also an advantage of cashless systems, which many operators and suppliers call the way of the future.
Scott Guardino, general manager of Paramount Automated Food Services Inc., Pompano Beach, Fla. uses the PayKey system to serve the same purpose as the coupons previously offered. "It (the coupons) was a great way to sell an account," said Guardino. But interest from locations waned. Now this "offline" cashless system — PayKey — is the selling tool. Customers can load employees' fobs with value that can be used to purchase products from the machines. Paramount can also use the keys to provide refunds to employees who lost money, as well as for promotions.
Alex Kiriakides, president, PayKey, said the stored value system offers another benefit. With its partnership with USA Technologies, PayKey offers a revalue station which takes credit and debit cards in order to recharge PayKey fobs. A bank of vending machines can then be cashless, said Kiriakides, and the operators only has to pay the fees on one machine.
According to Kiriakides, a single vending machine cannot have both a credit card reader and stored value system since the MDB only allows one such reader.
Tom Swimmer, product manager for cashless systems, VE Global Solutions LLC, said cashless systems are able to take the place of token or coupon programs an operator might already be offering. The details of the program are simply added to the software of the cashless system.
"If someone is using tokens today," said Swimmer, "it can be written automatically into our Zip system." Swimmer gives an example of an end user being given three free vends a week, previously in the form of tokens. With the Zip system, three vends will be given to that user's key at the beginning of the week. The customer can use them as normal, and the next week, three vends are once again added, automatically.
Another advantage of the cashless technology is that it allows the operator flexibility. "The operator can set limit by value or machine," said Swimmer. The value goes in penny increments, allowing any denomination vend. Also, prices are not limited to nickel increments. The Zip allows machine-specific limits, so a certain free vend virtual "token" could only be used in the coffee machine, not the snack machine, for example.
Key Fobs offer alternative for cashless
Nathan Rager, vice president, Rager's Food Service & Vending Inc., Van Wert, Ohio, decided to use the Zip system in a new account because he was interested in getting into cashless. He has been pleasantly surprised by the results.
Charging $6 per key, each key loaded with $5 for the employee to use, creates only a dollar of investment for Rager per key. "We feel we're getting a return for it," he said.
The employees at the account can recharge the keys at a recharge terminal that accepts credit and debit cards with an MEI reader. The credit processing is handled by USA Technologies, which charges a 35-cent processing fee for every $10 worth of credit. The authorization is done via a wireless connection. The keys must be recharged in increments of $10.
After two months, the machines at the location have processed 100 Zip key transactions, accounting for 30 percent of the sales. "I can see that people are into using the cashless system," said Rager. "I was impressed. I've got credit card acceptance without putting credit card acceptors on each machine."
The key fob system has advantages over money because it prevents the operator from having to empty a coin mechanism, said Reed with CMS. "The fact that we (in the U.S.) have a dollar bill changes the dynamic of the vending market," he said. If the dollar coin ever replaces the bill, like in Europe, people will be forced to carry more change — which is heavier. This will make cashless even more appealing. Also, the key fobs are inexpensive. They are molded plastic over a chip that maybe costs a nickel, said Reed. Not to mention employees consider being able to buy things with fobs a perk, he added.