What payment method is best for self-service car washes?
Self-service car washes have been gaining popularity as opposed to traditional hand car wash services, reflecting changes in consumer preferences and market dynamics. Existing and new self-service car wash owners can enhance customer satisfaction and even their profits by choosing the right payment methods. General Manager of Mauquoy Token Company, Jonas Van De Venster explains why a traditional payment method like tokens are still gaining market share in self-service car wash payment solutions.
In many European countries, self-service bays have been the most popular method of car washing for decades. In other countries, self-service is still on the rise. In the UK, for example, disrupting events like the COVID-19 pandemic and Brexit lead to a decrease in availability of skilled labor. Car wash owners reported having difficulties finding personnel, contributing to the conversion from traditional hand car wash services to self-service.
One crucial factor to consider when starting or running a self-service car wash is payment methods. Choosing the right payment method may increase customer satisfaction, price flexibility and even profitability of a car wash. Some payment methods can easily be combined with others, while other payment setups are more mutually exclusive. Below, we’ll take a look at the most common payment methods and their advantages.
Car wash tokens
Metal tokens are still the most convenient payment method and even offer an additional revenue stream that is often overlooked. The cost of the token is usually a fraction of the sales price. This implies that every token that is sold, but not used, generates extra revenue. Knowing that the number of tokens lost by an average self-service car wash amounts to 4,500 per year, the extra revenue stream can be considered significant.
Other benefits of a payment system with tokens include:
- Costs – Tokens might be the cheapest way to organize a payment process. Only a single change machine is needed plus simple coin validators at each wash bay. The cost of the tokens themselves are recovered instantly, as explained above.
- Flexibility – Car wash owners can choose the allowed payment options accepted by the change machine. This way, customers can purchase tokens using cash, credit cards, loyalty cards and contactless payment methods, such as NFC. The car wash operator can choose the options based on local payment habits, transaction costs and other factors. Adding a new payment option is also quite easy with just one change machine on-site. The flexibility to accept many payment options also allows to serve both recurring and incidental customers as there is no need to register first for a loyalty card.
- Promotions – Working with tokens offers flexibility to both car wash owner and customer. Loyalty programs like “Buy 10 tokens, get 1 free” can easily be introduced to increase revenue and build customer loyalty.
Security – Tokens offer increased security: car washes using tokens are much less prone to burglary as opposed to car washes having cash on-site. - Customer relationship – Tokens create a stronger link between car wash and customer. With customized tokens, customers are more inclined to return to the specific car wash or chain of car washes for their next rinse. Customers often buy a batch of tokens, not using all of them in one go. This increases recurring visits and customer loyalty.
- Brand visibility – By using a creative, custom design on the tokens, car washes can increase their brand recognition towards clients.
- Price flexibility – The number of sold tokens per euro/dollar can easily be changed to take advantage of promotions or changes in costs. If pricing is aligned with the local currency, tokens and cash coins can easily be combined.
Loyalty cards
Loyalty cards are physical or digital cards issued by car wash businesses towards customers who are interested in signing up to a loyalty program.
The big disadvantage of loyalty cards is that customers need to make an account first, which is a threshold for some customers and almost always a dealbreaker for one-time customers. This is particularly a burden for an unmanned operation like a self service car wash. Therefore, it is recommended to combine loyalty cards with other instant payment options.
The obvious advantage of loyalty cards as a payment method is increased customer retention. Loyalty cards may incentivize customers to return to the same car wash to accumulate points or earn rewards. Similar to tokens, promotional offers may be used to increase sales volumes.
Credit card/Contactless
Credit card, and especially contactless payment methods have seen an increase in popularity since the COVID-19 pandemic. They offer a simple and secure payment process for customers, and can be integrated with other payment options, such as tokens or loyalty cards.
Costs of credit card payments are significantly higher for both hardware and transaction costs. A coin validator costs a fraction of a credit card reader and is well fit to serve in humid environments. Transaction costs for credit cards typically range between 1 and 3% of revenues which is more than the processing cost of cash or loyalty cards.
Another disadvantage of this payment method and loyalty cards is that the car wash will miss out on customers that want to pay in cash when cash payments are not accepted.
Cash
Cash remains one of the most used payment methods in self-service car washes. While cash might have become a less common payment method in some Scandinavian countries, it still offers an uncomplicated transaction and suitable payment solution in most other countries.
Only a simple coin validator is needed, which means no transaction costs or expensive credit card terminals. In theory, such a car wash could even function without a coin changer, although the operator would lose revenue because many consumers do not carry a sufficient number of coins to wash their car. Especially in countries with a high use of cash, self-service car washes that only accept cash can still be found everywhere.
Cash offers the same simplicity and low cost of tokens, but not the flexibility of payment methods, pricing and promotion possibilities. Furthermore, car wash owners should be aware of the security risk of cash in every bay of their car wash.
Conclusion
As a result of the above, while exclusively cash accepting self-service car washes are still prevalent in many European countries, their market share is declining in favor of car washes also accepting tokens, loyalty cards or other cashless payment options.
Self-service car washes with a change machine that accept multiple payment methods in exchange for tokens is the most popular choice due to the benefits mentioned above: flexibility to serve all customers, low cost and additional revenue stream due to tokens being lost every year.
For more information about tokens and the benefits for your car wash, please visit tokencompany.com
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