A strong market exists for self-service coin redemption at credit unions. A 2011 survey from BranMark Strategy Group found that in 80% of U.S. households, at least one person saves loose change, and 64% of that change is counted and redeemed at financial institutions. Surveyors estimate that 70% of these savers redeem their coins one to three times per year or more, with many making a special trip to do so.
Among participants who normally redeem loose coins at a retail location, 80% said they would be very likely or somewhat likely to use a no-fee, self-service coin counter at a financial institution instead, if the option were available. Of the same group, 90% said if a convenient, local credit union other than their own installed a no-fee self-service coin machine, they would be likely to use it.
As a result, credit unions that do not provide coin counting machines for their members are ceding the advantage to others who offer the service. Not only will members pay regular visits to those other institutions, but they may also be subject to their competitor’s marketing promotions, teller interaction, and cross-sell efforts. It is also likely that the competing credit union will be the beneficiary of any goodwill and satisfaction engendered by the provision of a no-fee, self-service coin counter.
So what really makes consumers choose your redemption location over another? The top two factors cited are:
Convenience – the closer to home, the better
Fees – consumers do not want to pay to process coin
Cashing in at a self-service coin counter in the local supermarket offers the convenience of being close to home, and it’s a place where consumers frequently visit. While credit unions may offer close-to-home convenience and a frequently visited location, consumers also like the extended hours that a retail location typically allows. Grocery stores may have the upper hand in this regard, but when it comes to fees, it’s a different story.
Supermarkets install coin counters to drive income. The goal is to bring people into the store, put cash into their hand and hope they will spend it there. What’s more, their machines often have fees of around 10% or more that are deducted from the redemption totals.
Consumers are, for the most part, aware of these fees – although some people surveyed did express surprise at the percentage of the charges. Many consumers who redeem at supermarkets said they would happily use the self-service coin machine at a convenient credit union location if they could significantly reduce or eliminate the fee.
Although reluctance to pay a fee is the primary reason that consumers prefer to redeem at credit unions, savers also feel more secure bringing their coins to credit unions, which could be another strong motivator to change their behavior. These preferences can help credit unions attract the business of non-members who currently take coins to a retail location, particularly if a convenient no-fee option was presented.
For the full report, including the potential for converting members to self-service coin counters, download the full white paper from Cummins Allison.
As the number one provider of high-speed coin processing equipment, Cummins Allison gives customers tremendous value and unmatched performance, including coin counters which are preferred over a leading competitor by 100% of focus group participants in hands-on comparisons.