Scam or just "good business?"

[Weird Harold]

I did laundry this weekend and because the aprtment complex laundry rooms were both full, I went in search of a laundromat that could make use of my stash of quarters -- either by making change for a "Money Card" such as the apartment's laundries use or by accepting coins directly in the machine.

The closest Laundromat used the "Money Card" system, but a different money card system than the apartment complex -- that meant an additional two dollars for a compatible card to load with value to transfer to the machines.

Where the question of "Scam" comes into the picture is that neither the apartment complex nor the Laundromat "value transfer" machines will accept anything smaller than a $5 bill and no combination of washer and dryer charges add up to a multiple of five dollars; the only way you can use the card down to zero balance is to do something like thirty loads of laundry at once.

Whether intended or not, the end result is that the laundry machine company winds up holding (and likely earning interest on) the balance left on the card without giving anything of value in return or making any (obvious) provision for refunding the unused balance.

So is this a scam or the "reasonable security precaution" and "customer convenience" it's promoted as.

In the case of the apartment complex, I do believe it's largely security driven -- there have been far fewer machines trashed for the coin boxes since the went to the money card system and they provide the (first) card with $3 balance at no cost. (if you lose it, you have to pay the two dollars for a new card --with a $3 balance because you can't feed the value transfer machine with $1 bills or quarters.)

The Laundromat, I think it's a scam because there is ample 24 hours security both inside the laundromat and in the shopping center where it's located. The sytem could be designed to accept singles and coins to load the cards with the exact amount required for doing laundry. The $5 minimum guarantees the company is always dgoing to be holding value remaining on the card at least until the next laundry.

So, what's your verdict? Should such systems be required to accept exact value or is the interest earned on remainders the just due to the company for providing this safe, secure, reliable mode of feeding their washers and dryers? (don't slip on the sarcasm dripping of that last bit of description. )

 

[rgraham666]

It's not a scam because it's not illegal. As far as I know.

And it is 'good business' as it makes the business money.

Personally I think it rather unethical.

 

[keeblercrumb]

I did laundry this weekend and because the aprtment complex laundry rooms were both full, I went in search of a laundromat that could make use of my stash of quarters -- either by making change for a "Money Card" such as the apartment's laundries use or by accepting coins directly in the machine.

The closest Laundromat used the "Money Card" system, but a different money card system than the apartment complex -- that meant an additional two dollars for a compatible card to load with value to transfer to the machines.

Where the question of "Scam" comes into the picture is that neither the apartment complex nor the Laundromat "value transfer" machines will accept anything smaller than a $5 bill and no combination of washer and dryer charges add up to a multiple of five dollars; the only way you can use the card down to zero balance is to do something like thirty loads of laundry at once.

Whether intended or not, the end result is that the laundry machine company winds up holding (and likely earning interest on) the balance left on the card without giving anything of value in return or making any (obvious) provision for refunding the unused balance.

So is this a scam or the "reasonable security precaution" and "customer convenience" it's promoted as.

In the case of the apartment complex, I do believe it's largely security driven -- there have been far fewer machines trashed for the coin boxes since the went to the money card system and they provide the (first) card with $3 balance at no cost. (if you lose it, you have to pay the two dollars for a new card --with a $3 balance because you can't feed the value transfer machine with $1 bills or quarters.)

The Laundromat, I think it's a scam because there is ample 24 hours security both inside the laundromat and in the shopping center where it's located. The sytem could be designed to accept singles and coins to load the cards with the exact amount required for doing laundry. The $5 minimum guarantees the company is always dgoing to be holding value remaining on the card at least until the next laundry.

So, what's your verdict? Should such systems be required to accept exact value or is the interest earned on remainders the just due to the company for providing this safe, secure, reliable mode of feeding their washers and dryers? (don't slip on the sarcasm dripping of that last bit of description. )

No..... such systems should not be "required" to accept exact value. Your observation about how it works in practice was probably not even considered by the people designing and peddling the system who had no clue what price or denominations were typically used by the establishments they were selling it to.

On a much grander scale, your observation is probably true of all pre-paid card systems to some degree..... but there is that convenience factor for the consumer as well as obvious benefits to the retailer.

I would suggest you simply patronize cash machines or invest in your own washer/drier.

I don't know. I have a laundry lady do mine but I think someone should require her husband to not come to my apartment to pick up the laundry until I have actually finished with my shower. He seems a nice old Russian geezer but it is really annoying. And you think YOU have problems....

Weren't we solving the world's environmental problems a few minutes ago? Not sure this ranks right up there on the great castrophe scale, my friend.

-KC

 

[keeblercrumb]

Weren't we solving the world's environmental problems a few minutes ago? Not sure this ranks right up there on the great castrophe scale, my friend.

-KC

You know what? You did not deserve that. I apologize..... If it is wasn't important to you, you would not have posted it....

Rookie error on my part. Sorry.

-KC

 

[Huckleman2000]

On paper, it's good business. The downside is 'customer ill-will', which depends more on the available alternatives in the neighborhood, your apartment laundry notwithstanding. In any case, 'ill-will' requires some research to determine, so it's easier and cheaper to just implement the system on the merits.

Did the laundrymat owner choose an incompatible card system specifically to 'screw' your apartment complex? Probably not. There are probably competing card systems in that market, and some incompatibility is a powerful way to insure repeat customers. You don't want the same card as your competitor, because you want repeat customers. Although there is certainly some income from interest on the un-redeemed card balances, I would imagine that the greater value accrues from the repeat-business that the un-even card balances ensure.

 

[Weird Harold]

No..... such systems should not be "required" to accept exact value. Your observation about how it works in practice was probably not even considered by the people designing and peddling the system who had no clue what price or denominations were typically used by the establishments they were selling it to.

Since I've only seen the systems in replacement of coin operated machine -- which used to accept primarily quarters -- I suspect the choce for a $5 minimum was deliberate.

The technology to read any denomination of bill is far more widespread than these "money card" systems so there was no obvious technical reason for limiting the denominations accepted.

Systems designed to replace other systems that don't offer some degree of backwards compatibility are either poorly designed or deliberately intended to force the total replacement of the prior system. A system intended to replace a system dominated by quarters that won't accept quarters is either dumb or (deliberaely?) inconsiderate.

On a much grander scale, your observation is probably true of all pre-paid card systems to some degree..... but there is that convenience factor for the consumer as well as obvious benefits to the retailer.

I don't find the need to add value to my laundry card during office hours a convenience at all, especially when my emergency laundry fund is funded by saving my change rather than being a deliberate budget item and the office doesn't keep any cash they could make change with.

The laundry room is accessible 24/7 but I have to make sure there is enough on the card to wash after office hours. Filing the card is a budget item for later this week, but I miscalculated the amount of laundry for the month.

I would suggest you simply patronize cash machines or invest in your own washer/drier.

I live in a 400 sq/ft one-bedroom aprtment -- my own washer/dryer isn't an option, not even a stackable apartment set. There's no room and a lease clause agains it.

Cash machines are getting hard to find; I used a laundromat about a mile further away than the one using "Money Card" machines, but I think it's one of the very few left in this area..

Weren't we solving the world's environmental problems a few minutes ago? Not sure this ranks right up there on the great castrophe scale, my friend.

For somebody on a fixed income, it's certainly a much more immediate annoyance. I have been saving the world while waiting for responses here.

It's not a scam because it's not illegal. As far as I know.

I'm not sure it's not illegal here -- it depends on how directly they're earning interest on it, I think. As I understand it, in Nevada, any interest earned by a company on deposits or prepayments must be passed on to the customer -- or split with the customer.

At any rate, at the end of a year of the electric company's "equal pay plan" any overpayment for the year is returned with interest to reset the plan for another year; the phone company paid interest on the security deposit when they returned it after I had the same number and address for five years and my previous landlord paid interest on the security deposit when it was returned.

All the interest payments were tagged "In Accordance with Nevada Law" on the statement.

 

[elsol]

*shrug*

When I go to the laundry mat, I spend around $20 bucks (I have a LOT of clothing) so I don't get your point.

Carry a card or 5 bucks of extra quarters, I'll take the card especially if I can put around $40 bucks on it... that way I don't have to scrounge up quarters cause its late at night and I REALLY need to do some work pants.

Card + 24 Hour Laundromat? They can make their interest on the 3 dollars I leave on my card for that level of convenience... that's what 300 * .04 (maybe!) 12 cents a year... that and $5.26 will get them a latte.

 

[oggbashan]

Behind the times?

Whenever I need a laundromat I visit one of the two in my town.

Both have staff who will give change, show you how to use the machines, and, for a small fee, do everything for you including drying, ironing and packing the clean washing.

I suspect that card systems such as those described could be illegal in the UK under the Truck Acts (Acts to prevent workers being paid in money that could only be spent in the company store). Tokens can be bought for use in machines but 1 token = 1 use so there is never any surplus.

Og

 

[R. Richard]

One of the p[roblems with setting up a 'paycard' system is that the people setting up the paycard system have no idea what the current prices for wash/dry are, nor do they have any idea what the future prices are.

Let me educate you a bit as to the problem faced by the laudromat. If you have a wash charge that is even $.05 lower than the prevailing price [USD here,] people will come from all over town to use your washers. They will climb over walls, break down doors, whatever, to get the 'cheap wash.' The dry, of course, has the same problem. But wait! You can just charge $.05 MORE than the prevailing rate. You will then be besieged by users who are outraged at the 'high fees.' So, what you do is keep on top of things and, when your washer dryer suppliers tell you the rate(s) is/are changing, you change your rates to the prevailing rates. [I used to run a condo.]

 

[Weird Harold]

One of the problems with setting up a 'paycard' system is that the people setting up the paycard system have no idea what the current prices for wash/dry are, nor do they have any idea what the future prices are.

hey don't need to know what the current prices are or what the probable future price change increments might be -- they're replacing a system that worked in multiples of $0.25 with a system that can register charges in increments of $0.01 but only accepts payments in increments of $5.00.

The actual charges paid with such a card are irrelevant because the disparity in debit increments and credit increments make it virtually impossible to come to a balance of zero.

I have to wonder why they even need a system with a special card in the first place --the technology for "vending machines" to accept credit/debit cards is just as common as bill-readers that can read any denomination of bill or coin systems that can accept anything except pennies and "Eisenhower dollar" coins.

Both have staff who will give change, show you how to use the machines, and, for a small fee, do everything for you including drying, ironing and packing the clean washing.

Actually, both of the laundromats I visited Sunday offer "Fluff and Fold" and are co-located with a dry-cleaning drop-off/pick up (the dry cleaning isn't done on premises) but I don't think I'd know what to do with laundry that was actually folded.

I suspect that card systems such as those described could be illegal in the UK under the Truck Acts (Acts to prevent workers being paid in money that could only be spent in the company store).

I'd have to look it up, but I think there are similar laws here -- but they probably don't apply because the customer is voluntarily buying the card and can theoretically take their business elsewhere that doesn't use the system.

When I go to the laundry mat, I spend around $20 bucks (I have a LOT of clothing) so I don't get your point.
...
Card + 24 Hour Laundromat? They can make their interest on the 3 dollars I leave on my card for that level of convenience... that's what 300 * .04 (maybe!) 12 cents a year... that and $5.26 will get them a latte.

The point is that the disparity in credit and debit increments make it nearly impossible for you to NOT leave some balance on the card.

Your $3.00 balance dollars plus my $5.50 balance plus the ninety-eight other apartments in this complex (with balances mostly somewhere between ours) add up to a respectible amount of compound interest. Multiply that by a hundred or thousand other apartment complexes where the company contracts to equip/service laundry rooms -- what is a trivial amount to any one customer is a gold mine of "interest free loans" to the company.

 

[jomar]

To branch out a bit, there are other legal gimmicks that cause ill will in consumers. Many stores sell gift cards, which is great. The problem is that if the card isn't used in a certain amount of time (six months, a year) the stores start deducting money from the card as a service fee. So not only does the store make interest on all those cards about there, they whittle down the value of those cards to the consumer - possibly to zero if you're unaware of the policy.

 

[Weird Harold]

To branch out a bit, there are other legal gimmicks that cause ill will in consumers. Many stores sell gift cards, which is great. ...

True, Gift Cards do have have an element of "Scam" to them, but I'm not all that sure that it's a particular problem -- In one sense, the "value received" by the purchaser of a Gift Card is the card itself. If the gift card is never used, the purchaser has still received what was paid for, "A Gift." If the gift is used in a reasonable time frame, the recipient can get full value and reduce the balance to zero (especially since most retailers will refund cash when the balance gets below a certain level)

You can add mail-in rebates to the list of ways companies are making money from "short-term no-cost borrowing" from the consumers -- with the added benefit of also profiting from the periodic sale of mailing lists compiled from rebate forms.

 

[jomar]

In one sense, the "value received" by the purchaser of a Gift Card is the card itself. If the gift card is never used, the purchaser has still received what was paid for, "A Gift." If the gift is used in a reasonable time frame, the recipient can get full value and reduce the balance to zero (especially since most retailers will refund cash when the balance gets below a certain level)

True. It's the thought that counts in gift giving and the store counts the money.

You can add mail-in rebates to the list of ways companies are making money from "short-term no-cost borrowing" from the consumers -- with the added benefit of also profiting from the periodic sale of mailing lists compiled from rebate forms.

The person who thought up rebates, with all the detail and precision necessary to actually get one, deserves a special place in hell.

 

[Oblimo]

The card vending machine was probably designed by the same guy who suggested wrapping hot dogs 8 to a pack but hot dog buns 6 to a pack.