Automatic Merchandiser serves the business management, marketing, technology and product information needs of its readers including vending operators, coffee service operators, product brokers, and product and equipment distributors in print.
Issue link: http://automaticmerchandiser.epubxp.com/i/62876
C O V E R S T O RY machine's MDB or, in the case of an electromechanical machine, to the vending machine controller. Arwin has the device on both MDB and electromechanical machines. The cashless vending product, called the virtual universal wireless interface (VUWI®), can handle up to seven separate credit/debit or loyalty cards. The last item on the screen is the entry of a personal identifi ca- tion number to be associated with a credit/debit or loyalty card. When activated for a given card, each time a purchase is made using that card, the system sends an email with details of that purchase to the given email address. All VUWI data is stored on the Coin Free PCI-DSS (Payment Card Industry Data Security Standard) compliant server, not in the custom- er's phone. This way, the informa- tion is secure, should the customer misplace their phone. There is no swiping the VUWI device on or near the machine. Hence, the device does not need to meet government reach require- ments like controls on the machine. The front of the device has a Bluetooth adapter. There is a label on the front of the adapter that says "Use your cell phone to make a purchase. No cash. No card. No problem." A fl ashing LED light draws attention to the VUWI. Arwin has placed VUWIs in three of his accounts, including an Apple store with 200 employees. He claims the response has been very positive. The VUWI, while still in beta test, has some advantages over other cashless systems, Arwin noted. The hardware is less expensive. Coin Free charges him $5 per month for each device. The transaction cost to the merchant is also less than other cashless readers. The processing fee can be as low as 3.5 percent. 60 Operation Profi le: Gator Vending Location: Orlando, Fla. Owner: Gary Arwin Owned by Present Owner: 6 Years Number of Routes: 2 Number of Employees: 3 (Including owner) Equipment manufacturers: U-Select-It Corp., Crane Mer- chandising Systems Cashless System Providers: USA Technologies Inc., Coin Free Inc. Annual Sales: Not revealed Coin Free also offers prepaid purchases with VUWI, which is intended for captive accounts. The company is already offering a 1 per- cent loyalty reward for download- ing the VUWI app. Other loyalty rewards are being developed. When a vending location customer joins the VUWI loyalty program, they are asked to put a minimum $10 balance on their VUWI account, noted Matt Brady, vice president of marketing for Coin Free. This balance can then be used in the vending machines with VUWI readers or other VUWI compatible sites at gas stations, restaurants and retailers. This is the same concept being used by the emerging micro market industry, where a prepaid balance is estab- lished for purchases at the market so that there is not an individual payment being made for each item being purchased at the market. This method increases the trans- action amount for a single payment which then reduces the percentage of the merchant fee paid by the vending operator, Brady said. Automatic Merchandiser VendingMarketWatch.com May 2012 At the Apple store Arwin ser- vices, 62 employees downloaded the VUWI app, even before any market- ing was done to the employees. Future improvements planned Arwin uses QuickBooks for accounting. He realizes he will need a stronger accounting system as he grows. He has an associate working on a system. He also wants to get a better handle on how well products sell. He has always believed that greater variety yields higher sales, but he realizes the large variety he carries has high inventory costs. Arwin also realizes his static route deliveries are not cost effi cient compared to other delivery systems vending operators are currently using. In order to better optimize his deliveries, he will need more accurate sales tracking than he has with manual accounting. Future promising Arwin is optimistic about his future. He realizes that more and more customers are comfortable making vending purchases with cashless readers and mobile phones. The more cashless purchases customers make, the more higher ticket sales, he noted. He also sees a lot of growth for his 1-year-old OCS/water service division. He is presently exploring a liquid coffee. Arwin's immediate goal is to fi nd another route driver to free him up to concentrate on selling. His goal is to grow from his current two routes to four or fi ve routes with around 500 machines. At this size, he thinks he will be able to maintain personal contact with customers and generate enough sales to yield a better profi t margin. As new products and technolo- gies evolve, he thinks the business will be exciting for years to come.