Cash in those pennies -- no fee
Coinstar is increasing its gift card partnerships with retailers, including the grocery stores that house its machines.
This post comes from Lynn Mucken at MSN Money.
I hate pennies. I don't carry pennies. If a business disperses my change via human hands, I tell them "no pennies, please." (Note: They always round my change down.) If the coins come sliding out of a machine, I leave them. (Note: The courtesy clerks always remind me that I've forgotten my change.)
Pennies not only are pretty much worthless, they slow down the American economy. I keep track. Post continues after video.
Precisely 63.4% of the time I'm in the grocery checkout line, the woman in front of me stares intently at her total, pulls out a twenty, then begins to rummage for a penny. This usually is a three-minute process, entailing searching at least three purse pockets, extracting the coin purse, making a painstakingly slow motion to free up both hands to open it, adjusting the trifocals, then digging for a penny before finally presenting it to the checker.
Nonsense, you say, everyone uses a debit card. These people don't, and they're getting slower every day.
I'm also not too fond of nickels and dimes. Quarters I like; some parking meters still take them.
Yet, somehow, from somewhere, these small coins accumulate in our home. Gradually they fill a little basket, which periodically gets dumped into a gallon-sized baggie, which eventually gets dragged to the grocery.
All this ranting is just a roundabout way to get to Coinstar, whose ubiquitous green machines gobble up $3 billion in coins every year and spit out what is called a "levied cash voucher" equal to the amount you put in, minus the 9.8% fee that has helped Coinstar stock rise 450% over the past 14 years.
For years, you could spend that voucher only in the store in which the machine was located, and usually only on the same day. Now, according to a story in The New York Times, Coinstar is instituting a business model that actually will shift that fee away from the penny hoarders, and allow them to spend the money whenever they want.
For about five years now, Coinstar has offered a choice. In lieu of the vouchers, customers can choose gift cards to retail businesses such as Amazon.com. The best part: The 9.8% fee was not deducted from the gift card. Coinstar never pushed the gift cards, however, and the percentage of customers opting for the cash voucher was "inordinately high," said Engle Saez, vice president for consumer experience at Coinstar.
"We haven't told anyone about it," Saez said. "For all intents and purposes it's been the best kept secret out there."
The reluctance to advertise what amounts to a good deal made little sense. Coinstar was still getting the equivalent of its fee from its partners, and was likely to pick up customers who have been deterred by the 9.8% fee. In addition, it would benefit hugely from exposure on the retail businesses' websites.
Now, however, the ad campaign is on. And the deal has gotten even better for Coinstar users. Several retail partners, including iTunes, Borders and Regal Cinemas, have at times offered gift cards that exceed the value of a $40 minimum coin exchange by $10.
"What we're hearing from our customers is that they like it and they're happy with it," Mark McGowan, president of the Northeast division of Stop & Shop, told The New York Times.
Coinstar's Saez told the Times that such in-store programs have enormous potential -- and should have been initiated long ago.
"To convert coins into a grocery store gift card; that one was a no-brainer that skipped over a lot of brains here for many years," he said.
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