Final report
Question 27: Would you be willing to be contacted concerning follow-up questions to this
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Question 27: Would you be willing to be contacted concerning follow-up questions to this survey? 48 responses Yes: 71% No: 29% Question 28: Optional Information: Please list your name, company, address, phone number and e-mail address. Contact information supplied from selected respondents. 260 4.14.2.2 Summary Information from Laundromat Stakeholders Question 1: What is the approximate total number of coin acceptors at your business? 10,371 total coin acceptors from 92 responses Mean: 113 coin acceptor per response High: 900 Low: 1 Question 2: If available, please indicate the manufacturer, model and total number of coin acceptors in your inventory. ESD Greenwald Coinco Nunzpruffer IDX Imonex Hanke MEI/Mars Wasomat Huebsch Rowe GE Vendrite Unimac Drop Coin Parker Engineering Keltner Set o Matic Hamilton and Sunstrand Rowe SCAN COIN Setomatic Question 3a: What is the approximate total number of coin acceptors at your business in the following areas? Food and beverage vending 253 total coin acceptors from 85 responses Mean: 2.98 coin acceptors per response High: 32 Low: 0 Question 3b: What is the approximate total number of coin acceptors at your business in the following areas? Other vending 612 total acceptors for 66 responses Mean: 9.3 High: 150 Low: 0 261 Question 3c: What is the approximate total number of coin acceptors at your business in the following areas? Parking meters One response was 1; all others were 0. Question 3d: What is the approximate total number of coin acceptors at your business in the following areas? Laundromat 3978 total acceptors for 90 responses Mean: 44.2 High: 1260 Low: 0 Question 3e: What is the approximate total number of coin acceptors at your business in the following areas? Amusement and gaming 281 total acceptors from 65 responses 38 responses of 0 Among those with response > 0: Mean: 10.4 High: 160 Low: 0 Question 3f: What is the approximate total number of coin acceptors at your business in the following areas? Tool booths All responses were 0. Question 3g: What is the approximate total number of coin acceptors at your business in the following areas? Automated car wash machines 116 total acceptors for 59 responses 52 responses of 0 Among those with response > 0: Mean: 16.6 High: 55 Low: 0 Question 3h: What is the approximate total number of coin acceptors at your business in the following areas? Other (please specify number and use of any other coin acceptors) 2 responses of dog wash 3 responses of vacuums 1 response of self-serve car wash 1 response of vending dispenser 1 response of changers 262 Question 4: What is the total number of sites where your coin acceptors reside? 480 total sites among 92 responses Mean: 5.2 High: 114 Low: 1 Based upon totals from Questions 1 and 4 Mean number of units per site: 21.6 (= 10,371 acceptors/480 sites); note that after adjusting for some data anomalies the number was adjusted to 53 units per site. Question 5: Approximately, how frequently are your coin acceptors serviced by a representative of the equipment manufacturer? 48 responses 3 or more times per year: 9% 2 times per year: 4% 1 time per year: 14% Once every two years: 9% Once every three years: 9% Other: 55% Question 6: Approximately how many coin acceptors do you replace each year? 870 total replacements from 92 responses 42 responses of 0 Among those with response > 0: Mean per response: 17.4 High response: 600 Low response: 0 Based upon totals from Questions 1 and 6 Mean ratio of acceptors replaced each year: 0.084 (= 870 acceptors replaced/10,371 total in field) Question 7: Does your equipment also accept tokens? 92 responses Yes: 7% No: 93% Questions 7a and 7b: How many tokens are processed per week? How many token designs are currently in use in your business? Multitude of answers High: 5000 Low: 0 (Comment: only use “double D” tokens) Up to 2 different token designs accepted 263 Question 8a: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Total 73 responses Total: 1,077,783 Mean: 14,764 High: 160,000 Lowest three responses: 0, 100, 250 Question 8b: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Pennies 59 responses 56 responses of 0 Among those with response > 0: Total: 625 Mean: 208 High: 400 Low: 25 Question 8c: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Nickels 64 responses 29 responses of 0 Among those with response > 0: Total: 4589 Mean: 131 High: 1000 Low: 5 Question 8d: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Dimes 63 responses 24 responses of 0 Among those with response > 0: Total: 7335 Mean: 188 High: 1500 Low: 10 Question 8e: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Quarters 83 responses Total: 1,160,603 Mean: 13,983 High: 160,000 Lowest three responses: 100, 250, 400 264 Question 8f: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Half dollars 55 responses: 54 responses of 0; one response of 10 Question 8g: What is the approximate number of coins (and tokens) processed by your coin acceptors per week? Dollar coins 58 responses 34 responses of 0 Among those with response > 0: Total: 32,076 Mean: 1336 High: 10,000 Low: 1 Question 9: Of your total coin acceptors, how many determine coin (and token) quantities by weight? 71 responses 49 responses of 0 Among those with response > 0: Total: 1353 Mean: 62 High: 131 Low: 3 Question 10: Of your total coin acceptors, how many determine coin (and token) quantities by stack height? 61 responses 51 responses of 0 Among those with response > 0: Total: 9674 Mean: 967 High: 5000 Low: 1 Question 11: Of your total coin acceptors, how many determine coin (and token) quantities by counting? 68 responses Total: 83,247 Comment: after sending out survey, CTC realized that this question was likely misleading and the results were therefore considered invalid. 265 Question 12: What impact (including cost per unit) would you face if any of the following coin properties were changed? [Radio Buttons: Scale 1 to 10 + “Unknown or N/A”] 48 responses Mean response is given for each of the following. Diameter: 9.7 Thickness: 9.7 Weight: 8.5 Metallic Content: 7.4 Color: 3.0 Gloss: 3.1 Hardness: 3.8 Electromagnetic Signature: 6.8 Question 13: Please provide comments concerning potential changes to any of the above coin properties. 39 responses; significant responses follow. “Changing any of the basic qualities of coins, quarters in particular, would be VERY costly & likely would put us out of business.” “Just don’t replace the paper dollar with a coin . . . since a huge portion of our income is with dollar bills.” “I do feel STRONGLY that the US Mint should eliminate the PAPER DOLLAR.” “My customers prefer coins over the card system.” “Change all coins or get rid of them entirely . . . Coins are a nuisance and don’t have enough value to justify production in today’s economy.” “Quarters are critical to my business.” Question 14: What is the total number of electronically-based coin acceptors at your facility/facilities that are less than 6 years old? 82 responses 26 responses of 0 Among those with response > 0: Total: 2549 Mean: 45.5 High: 300 Low: 2 Question 15: Electronically-based acceptors that are between 6 and 10 years old? 75 responses 27 responses of 0 Among those with response > 0: Total: 1362 Mean: 28 High: 173 Low: 1 266 Question 16: Electronically-based acceptors that are greater than 10 years old? 70 responses 43 responses of 0 Among those with response > 0: Total: 1711 Mean: 63 High: 604 Low: 1 Question 17: What is the total number of mechanically-based acceptors at your facility/facilities that are less than 6 years old? 71 responses 43 responses of 0 Among those with response > 0: Total: 386 Mean: 13.8 High: 30 Low: 1 Question 18: Mechanically-based acceptors that are between 6 and 10 years old? 65 responses 43 responses of 0 Among those with response > 0: Total: 386 Mean: 17.5 High: 150 Low: 1 Question 19: Mechanically-based acceptors that are greater than 10 years old? 67 responses 38 responses of 0 Among those with response > 0: Total: 383 Mean: 13.2 High: 82 Low: 1 Question 20: What is the approximate number of coin acceptors in your business that accept pennies? 77 responses 4 total from all responses From responses to Questions 1 and 20: percentage of acceptors that accept one-cent coins: 0.039%. 267 Question 21: What is the approximate number of coin acceptors in your business that accept nickels? 79 responses 27 responses of 0 Among those with response > 0: Total: 221 Mean: 4.25 High: 20 Low: 1 From responses to Questions 1 and 21: percentage of acceptors that accept 5-cent coins: 2.1%. Question 22: What is the approximate number of coin acceptors in your business that accept dimes? 79 responses 26 responses of 0 Among those with response > 0: Total: 226 Mean: 4.26 High: 20 Low: 1 From responses to Questions 1 and 22: percentage of acceptors that accept dime coins: 2.2%. Question 23: What is the approximate number of coin acceptors in your business that accept quarters? 86 responses Total: 8241 Mean: 96 High: 800 Low: 0 From responses to Questions 1 and 23: percentage of acceptors that accept quarter dollar coins: 79.5%. Question 24: What is the approximate number of coin acceptors in your business that accept half dollars? 71 responses 64 responses of 0 Among those with response > 0: Total: 42 Mean: 6 High: 20 Low: 2 From responses to Questions 1 and 24: percentage of acceptors that accept half dollar coins: 0.4%. 268 Question 25: What is the approximate number of coin acceptors in your business that accept dollar coins? 77 responses 42 responses of 0 Among those with response > 0: Total: 1291 Mean: 37 High: 500 Low: 1 From responses to Questions 1 and 25: percentage of acceptors that accept dollar coins: 12.4%. Question 26: Please provide any comments that you have concerning a potential redesign of U.S. circulating coins. 41 responses; significant responses follow. “Don’t mess with a good thing.” “It’s a good idea if it is helping economy and country, business like should be able to take care of themselves by moving to latest equipments or probably credit card acceptance.” “ELIMINATE THE PAPER DOLLAR AND PENNIES.” “Quit wasting money on dollar coins!” “Circulating and popularizing dollar coins would be enormously beneficial to laundromat owners.” “I only deal in quarters but they have to be the same diameter.” “Today, my laundromat is Dollar Coin Only (DCO). My customers have adapted to my 5 year change over from quarters to dollar coins.” “They must work in current vending units to be at all practical.” “Costs associated with this endeavor will result in staff reduction.” Question 27: Would you be willing to be contacted concerning follow-up questions to this survey? 89 responses Yes: 65% No: 35% Question 28: Optional Information: Please list your name, company, address, phone number and e-mail address. Contact information supplied from selected respondents. 269 4.14.3 Appendix 4-C: Detailed Stakeholder Data 4.14.3.1 Vending Machine Owners and Operators In the US, there are approximately 5.3M food and beverage vending machines [1]. Approximately 200,000 vending machines 116 (the majority of which were manufactured before approximately 1986) are still in service that rely upon communication protocols that are no longer supported by the industry. For these latter vending machines to accept non-seamless coins they will require installation of a communications adaptor or they will have to be replaced in their entirety since changes to US circulating coin characteristics and/or properties cannot be directly accommodated by these machines. Based upon the vending industry questionnaire results, the average vending machine site has 2.81 vending machines. More than 98% of the vending industry coin acceptors use active coin sorters (typically based upon EMS) to recognize coins and 84% of the vending industry coin acceptors in service are less than 10 years old (as of Fall 2011). According to the questionnaire results, of the coins collected by vending machines: x 53% are quarter dollar coins x 31% are dime coins x 8% are dollar coins x 8% are 5-cent coins x Far less than 0.1% is either one-cent or half dollar coins. In terms of the distribution of coin denominations that are recognized by the coin acceptors in the vending industry: x 92% recognize quarter dollar coins x 91% recognize dime coins x 91% recognize 5-cent coins x 81% recognize dollar coins x 6% recognize half dollar coins x 0.007% recognize one-cent coins. Approximately 8% of vending machines do not accept coins for payment. Presumably, they accept notes, tokens and/or non-cash payment methods such as credit/debit cards. In terms of 2010 revenues, 85% of total vending sales came from operators whose individual annual vending revenue was at least $5M [1]. These operators are referred to in this report as large vending machine owners and operators; those operators with annual sales of less than $5M are referred to in this report as small vending machine owners and operators. The large vending machine owners and operators are generally big enough to have their own maintenance staff. Those that do are often able to install upgrades themselves at lower cost than that for small vending machine owners and operators who typically rely on third-party service centers for modifications or services to their equipment. In addition, large vending machine owners and operators would likely receive large-volume discounts for any hardware upgrades that would be 116 Since these 200,000 machines are included in the 5.3M total vending machines, only 5.1M vending machines are assumed to use the modern communications protocol. 270 required to recognize alternative material coins. A 5% large-volume discount was assumed for large vending machine owners and operators. Since 92% of the 5.1M vending machines recognize quarter dollar coins, a maximum of 4.692M vending machines would have to be upgraded if quarter dollar coin characteristics and/or properties changed. If changes are made to the characteristics and/or properties of either (or both) the 5-cent or dime coins without any changes to the characteristics and/or properties of the quarter dollar coin, then a maximum of 4.641M machines would require upgrades. Given the meager usage of and low recognition rate of one-cent and half dollar coins, the present analysis assumes that changes to either or both of these coins will not precipitate a need to upgrade coin acceptors used in vending machines should coin characteristics and/or properties of either of these coins change. Although alternative material changes to the dollar coin have not been fully experimentally investigated in this study, since the production of circulating dollar coins was suspended in December 2011 [2], the number of vending machines requiring upgrades strictly due to changes to the dollar coin, which are still accepted by 81% of vending machines, would be a maximum of 4.131M. 4.14.3.1.1 Large Vending Machine Owners and Operators If the number of vending machines is scaled by total revenue, then 85% of the vending machines are owned and/or operated by large vending machine owners and operators. All coin acceptors (active or passive) older than 10 years were assumed to require full replacement at a discounted per unit cost between $142.50 and $237.50; $190.00 was assumed to be the most-probable cost per new coin acceptor. These values represent typical discounted costs for newly manufactured active coin acceptors across coin-acceptor manufacturers/retailers and commonly available models. 117 For active coin acceptors between 6 and 10 years old assuming a change in EMS, but no change in coin dimensions, upgrades would consist primarily of software uploads or modifications; hardware replacement would not be required. Therefore, the projected upgrade costs were found to be between $25 and $42, where $25 represents the minimum labor or service fee to complete the upgrades while the $42 per unit value includes another 20 minutes of labor (at a fully burdened rate of $50 per hour) per unit beyond the low estimate of $25. The value selected as the most-probable cost for upgrading these units is $25. Costs for upgrading active coin acceptors less than 6 years old were found to be between $17 and $25 per unit to reflect the cost range from various suppliers to upload software to these coin acceptors. A value of $25 per acceptor was selected as the most-probable value for the present analysis. All of these values assume that new coins remain the same dimensions as the incumbent coins. Changes to coin dimensions would require that all coin mechanisms be replaced. 117 The most commonly quoted service fee for coin acceptor upgrades was $75 per site, where the average number of vending machines per site (from questionnaire results) is 2.81. Consequently, the service fee per machine is approximately $25 (i.e., $75 per site fee divided by 2.81 machines per site). 271 4.14.3.1.2 Small Vending Machine Owners and Operators Small vending machine owners and operators control the remaining 15%, or 703,800, of the vending machines needing upgrades as a result of changes to quarter dollar coin characteristics. A total of 696,150 vending machines would require upgrades if changes were made only to the 5-cent and/or dime coins. No vending machine changes are assumed to be needed by the small vending machine owners and operators if changes were made to the one-cent or half dollar coins; and 619,650 vending machines would need to be upgraded if changes were introduced to the dollar coin. Small vending machine owners and operators rely on third-party providers to complete upgrades and maintenance to their vending machines. Service calls for completing third-party upgrades were estimated by the stakeholders to be between $50 and $75 per site. To upgrade units manufactured prior to 2001, the following assumptions were made: $75 per site service call, three vending machines per site and hardware costs (between $150 and $250; $200 is the most probable hardware cost). Therefore replacement of coin-acceptor units would cost small vending machine owners and operators between $175 and $275 per unit. The most probable value used was $225 per vending machine. Upgrades to coin-acceptor units installed between 2001 and 2006 typically can be either 1) taught to recognize coin characteristics and/or properties (either dimensions or EMS) that are different from the incumbent coins or 2) can be removed from the vending machine and sent to a service center for upgrades. Either of these scenarios would cost approximately $42 to $50 per unit based upon a $75 service fee split among three vending machines and between 20 and 30 minutes additional labor (at $50 per hour fully loaded) per machine. The most-probable scenario assumed was $42 per unit. Estimates for upgrading units produced after 2006 range from $27 to $35 per unit based upon a $10 software upload fee applied to all machines and between $50 and $75 per site service fee to upload upgraded software; three vending machines per location was assumed. The most probable per unit upgrade cost for the post-2006 units was $27. Based upon the experience from the coin-acceptor manufacturers and the coin-acceptor service centers, the majority of small vending machine owners and operators will wait until maintenance on the coin acceptor is required before upgrades are requested. At that time these small vending machine owners and operators will have the new software uploaded for up to $10 per acceptor. This strategy will save the service fee that would otherwise be assessed to solely upload new software resulting from changes to coin characteristics and/or properties. However, the cost analysis assumed here does not account for small vending machine owners and operators taking advantage of such a scenario; all impacted coin accepters are assumed to be immediately replaced/upgraded. 4.14.3.2 Laundromat Owners and Operators The laundromat industry differs from the vending industry in several respects. First, the average number of machines per site is 53 for laundromats, compared to 2.81 for vending. Secondly, the majority (98% by some estimates) of laundromat owners and operators performs their own maintenance and many of the units rely upon passive coin acceptors. Passive units include slides, whereby coins are placed into holding slots and after placing the required number and denomination of coins in these slots, the mechanism is slid into passive coin recognition hardware, which typically checks for coin diameter and thickness. The total number of laundromat machines in the US is estimated to be 5.1 million units based upon combined totals 272 from public laundromats and those at college dormitories, hotels, apartment complexes and similar multi-housing facilities. The coin acceptors in this industry typically last approximately 10 to 15 years. According to the questionnaire results from this stakeholder group, 82% of all laundromat coin acceptors are electronic-based (i.e., rely on active sensing to validate coins); the other 18% are passive. Of all laundromat coin acceptors, 63% are less than 10 years old. One of the by-words in the laundromat industry is that the “quarter dollar coin is king.” This is borne out from the questionnaire results, which showed that 96% of the coins collected from laundromat owners and operators are quarter dollar coins; 2.8% are dollar coins, while the other coin denominations account for less than 1% each. Among all laundromats, 80% of the machines are equipped to accept quarter dollar coins; 12% of the machines accept dollar coins; 2% of them accept dime coins; 2% of them accept 5-cent coins; and less than 1% of laundromat machines accept either half dollar or one-cent coins. (Note that some of the respondents to the laundromat questionnaire indicated that other machines were present at their facilities, including vending machines. The reported totals for the one-cent, 5-cent, dime and half dollar coins are assumed to be associated with other products or services offered by the laundromat owners and operators.) Therefore, for purposes of the current analysis, impacts to the laundromat stakeholders will be based strictly upon the use of quarter dollar and dollar coins. Approximately 20% of laundromat machines are designed to accept notes, tokens or non-cash payment options including credit/debit/customer loyalty cards. No known laundromat coin mechanisms 118 are designed to provide change. Therefore, coin mechanisms for the laundromat industry are simpler and less expensive than the units used by the vending industry. Since “the quarter dollar coin is king,” the main focus of the present analysis was on the impact associated with changes to the quarter dollar coin. Of course, changes to the dollar coin, in spite of the current suspension of its production as a circulating coin, must also be considered since many laundromats remain dependent upon the use of dollar coins. A few laundromats are “dollar only” establishments, meaning that the only coin accepted is the dollar coin. The analysis conducted for the laundromat owners and operators assumed that all active coin acceptors manufactured before 2001 would require replacement with a new model costing between $125 and $150. The most-probable value is $135 for purchase of new active coin acceptors for laundromat use. New active coin acceptors would likely be installed by current maintenance staff as part of their daily activities. Therefore, under the low-cost estimate, no additional labor hours are assumed for installation of any new coin acceptors. Both the high-cost estimate and the most-probable cost estimates account for installation of each new coin acceptor to occur in 20 minutes. The cost of this labor (at an assumed fully burdened rate of $50 per hour) is accounted for in the high and most-probable cost calculations: for the high-cost estimate, all labor is assumed to be completed during overtime using existing staff or through 118 A coin mechanism includes the coin acceptor plus any other mechanical features used to process coins. Coin mechanisms may include systems that move coins around, return invalid coins to the customer, store coins for later retrieval (to make change for example) or perform other mechanical functions to coins that are necessary for the proper operation of the machine. 273 hiring added staff, while for the most-probable cost estimate, half of the units were assumed to be installed during preexisting planned staff labor hours, while the other half would require extra labor hours at cost to the laundromat owners and operators. Consistent with the acknowledgement of coin-acceptor manufacturers, the active units in the field that are between 6 and 10 years old (as of Fall 2011) could be taught to recognize new coins. The low-cost estimate for this activity assumes that the current laundromat staff completes this activity as part of their daily activities with no added cost to the laundromat owners and operators. The high-cost estimate assumes that these units can be taught to recognize the new quarter dollar and/or dollar coins in 15 minutes, while the most-probable cost estimate assumes that this can be completed in 10 minutes. In both cases, it was assumed that the teaching time represents additional labor beyond that currently budgeted for existing staff. Uploading new software for active coin acceptors purchased after 2006 was assumed to require a $10 upload fee for all cost scenarios. The low-cost estimate for upgrading these coin acceptors included only the $10 upload fee and all labor required would be completed by existing staff within currently budgeted labor hours. For the high-cost estimate, it was assumed that each of the units could be upgraded in 15 minutes and that this would require labor beyond that currently budgeted for existing staff. The most-probable cost estimate assumed that half of the new coin acceptors could be installed with currently budgeted labor hours and the other half of the coin acceptors would be installed with labor hours beyond those currently budgeted for staff. Passive units, including slides, which are prevalent in laundromats, rely on coin dimensions. Therefore, changes to the materials of construction of coins while maintaining incumbent coin dimensions will not impact these units. However, changes to coin dimensions will require replacement of these units. Passive units retail for between $50 and $100. The most-probable cost used in the present analysis was $75 per unit. The low-cost estimate assumes that replacement of passive coin acceptors—an estimated 15-minute task—will be made by preexisting staff as part of their normal activities. The high-cost estimates assume that replacements will require 15 minutes of labor per unit beyond that currently budgeted for existing staff. The most-probable cost estimate assumes that half of the replacements will be made with currently budgeted labor hours and the other half of the coin acceptors will be installed with labor hours beyond those currently budgeted for existing staff. 4.14.3.3 Pay Phone Owners and Operators The US has approximately 425,000 public pay phones currently in service [3]. As a result of increased cell phone availability, the number of pay phones has dropped considerably since 2000 when over 2.0M pay phones were available in the US. Approximately 85% of the installed pay phones rely upon passive coin-recognition technology. Coin diameter and thickness are carefully measured in these units. A counterbalance on a pivot within a cradle is used to validate coin weight. The pay phone industry was reluctant to indicate what tolerances in coin diameter, thickness and weight are acceptable to pay phones. To aid in addressing this issue, CTC acquired a popular pay phone coin mechanism to assess its dimensional and weight limits. Due to security concerns associated with providing these experimental results, this information (i.e., defining the acceptance windows), test results are not reported here. However, these findings were forwarded to the United States Mint. Changes to 274 coin dimensions outside the associated acceptance window (among the 5-cent, dime and/or quarter dollar coins) would require that the mechanical coin acceptors be replaced at an estimated hardware cost of between $150 and $200 each; $175 was assumed as the most- probable cost. In all cost scenarios (low, high and most-probable) a $75 per site service fee was also assumed with two pay phones per site. As an alternative to upgrading units, the pay phone owners and operators could accept only incumbent US circulating coins for payment. Passive coin acceptors cannot simply be replaced with active units in pay phones. Active coin acceptors have been developed and are in use in approximately 15% of pay phones. These units carefully check a coin’s dimensions and EMS; they can accept up to 14 different coin configurations. Upgraded software can be uploaded to these units for a service fee of approximately $75 per site. Some providers also charge a $10 fee to upload new software to a pay phone. These upgrades would be needed on active devices regardless of a change in EMS or coin dimensions. A $75 service fee per site, two phones per site and $10 software upload fee was assumed for all cost scenarios (low, high and most-probable) for changes to active coin acceptors in pay phones. Pay phones typically only accept 5-cent, dime and/or quarter dollar coins. For this analysis, 100% of pay phones were assumed to accept quarter dollar coins, while only 90% of existing pay phones were assumed to accept 5-cent and dime coins in addition to quarter dollar coins. No evidence was found that suggests that any US pay phones accept one-cent, half dollar or dollar coins. Therefore, the analysis assumes that no conversion costs are required for pay phones from any changes to the one-cent, half dollar or dollar coins. Change is not provided by pay phones; however, coins are held in escrow until the caller is connected with the other party. At that time the coins are released into the cash box. If no connection is made to the other party, then the inserted coins are returned to the caller. 4.14.3.4 Municipal Parking Officials There are an estimated 2.0M parking meters in the US [4]. Legacy units, estimated at 10% of the total, rely upon the patron inserting a coin and then turning a crank that passes by several gates to passively validate the coin. Passive parking meter units evaluate diameter and thickness to determine the legitimacy of a coin. These remaining passive units are gradually being replaced with active coin validation technology that relies upon EMS and coin dimension detection technology that is similar to that used in vending machines. Virtually 100% of parking meters accept quarter dollar coins for payment; an estimated 50% of parking meters also accept dime and 5-cent coins for payment. Only the active acceptors process dollar coins; approximately 50% of the active parking meter coin acceptors recognize dollar coins. From an Internet search to define the types of parking meters available in various major cities throughout the US, no fielded parking meters were found that accept one-cent coins and none were found that explicitly stated that they accept half dollar coins. No known parking meters return change. In addition to coin payment options, many parking meters in use today allow for credit/debit card payment; some also allow for use of other cashless payment methods including payment through 275 cell phone apps. Notes are not typically accepted by parking meters that service a single parking space. Many cities have installed kiosk stations that either service a specified group of parking locations or provide a validation pass for any parking spot within the jurisdiction of the associated parking authority. These kiosks typically accept multiple forms of payment including notes. Should only the EMS of coins change, then none of the passive parking meter coin acceptors will be impacted. However, the active units would require new software uploads, which are assumed to cost $10 each. Software uploads for upgrading a large number of parking meters are expected to be made a rate of 6 to 12 per hour and require staff to work hours beyond their currently budgeted hours. The low-cost scenario assumes that current parking meter staff members complete the software upload in 5 minutes per meter. The high-cost scenario assumes a software upload every 10 minutes; while the most-probable cost scenario assumes a software upload every 7.5 minutes. A fully loaded labor rate of $50 per hour was assumed. No known parking meters use coin weight as a validation parameter. Therefore, changes to coin weight (while keeping both EMS and dimensions consistent with incumbent coins) will have no known impact to parking meters. Changes to coin dimensions will necessarily impact both passive and active coin acceptors. Such a change would require that passive units have their coin validator replaced. Although very sophisticated models, which accept credit cards, allow for cell phone payments and are solar powered, are on the market for upwards of $600 each; the assumption used for the present analysis is that simple coin drop units would be used to replace passive units. These coin drop units retail for approximately $120 to $150 each. The most-probable cost was assumed to be $135 each. One industry expert indicated that these units can be replaced in 5 minutes or less. The low-cost scenario assumes that parking meter coin acceptors can be changed over in 5 minutes each. The high-cost scenario assumes that parking meter coin acceptors can be changed over in 10 minutes each; while the most-probable scenario assumes that parking meter coin acceptors can be changed over in 7.5 minutes each. Each scenario also assumes that all upgrades are completed during additional, currently unbudgeted hours at a fully burdened labor rate of $50 per hour. Existing EMS-based units will also require upgraded software if coin dimensions change. The cost assumptions for changes to coin dimensions are the same as those for changes to coin EMS in parking meter coin acceptors. 4.14.3.5 Amusement Machine Owners and Operators This stakeholder group, which has annual revenues of approximately $750M from coin-operated games and rides [5], includes games common to arcades and family entertainment centers (FECs). An estimated 1.7M coin acceptors are used by this stakeholder group, which is dominated by the quarter dollar coin and customized tokens for payment. 119 Changes to coins 119 Actual percentages by denomination of coins collected were not found for this stakeholder group. In the few FECs visited by CTC during execution of this project, no US circulating coin other than the quarter dollar coin was accepted in any amusement machines. Based upon that limited exposure, it is assumed in this analysis that the only US circulating coin accepted in amusement machines is the quarter dollar coin. 276 other than the quarter dollar coin would not significantly impact this stakeholder group and are therefore not included in the present analysis. Due to their simplicity of design, the majority of amusement machine coin validators are serviced by the owners or staff of the establishments that operate the equipment. Any upgrades would be completed by owners/staff of these businesses. Very few amusement machine owners and operators rely upon third-party suppliers for this type of service. More than 70% of the coin validators used in amusement machines rely only on coin dimensions for validation. Of these, many coin acceptors use a removable magnet to sort out steel slugs. Some of the coin acceptors validate that coins are of metallic composition, although they do not attempt to validate the metal(s) used in the coin’s construction. Therefore, changing the metallic composition, while maintaining the dimensions of the quarter dollar coin, would be minimally disruptive to the amusement stakeholders. A maximum of 30% of the amusement coin acceptors would require an upgrade if the quarter dollar coin’s EMS was altered. Given that the majority of the EMS-based coin acceptors used in the amusement industry can be taught to recognize coins having differing dimensions and/or EMS, the estimated cost impact to the owners and operators was based upon the labor to teach the units to recognize the alternative material coins. 120 For the present analysis, the low-cost estimate is based upon the FEC staff teaching the EMS-based coin acceptors as part of their daily activities. The high-cost estimate assumes that this function is completed in 10 minutes (only the alternative material quarter dollar coins would be required) and that this work is completed by currently unbudgeted staff hours at a fully loaded labor rate of $50 per hour. The most-probable scenario assumes that 50% of coin acceptors would be updated by existing staff as part of their daily activities; the other 50% would be upgraded with labor not currently budgeted for operating the FEC. Use of plated-steel coins would require the removal of magnets—a five-minute (or less) per machine task according to one of the amusement coin-validator manufacturers. Due to the limited amount of time required to remove any magnets, this task was assumed to be performed in its entirety by existing staff during currently budgeted work hours. Therefore, no cost impact for removal of magnets was assumed in the present analysis. Given that the amusement machine owners and operators “sell time” on their machines, the industry is not as vigilant as the vending industry to abate attempts at fraud. This industry does not return change. Therefore, all coins are transferred directly to the cash box upon being accepted. Invalid coins are returned to the customer. Coins are also returned to the customer when the coin validator is temporarily incapacitated. Co-circulation of two coins of differing dimensions would be problematic for this industry, whose coin acceptor infrastructure is heavily invested in quarter dollar coins of incumbent dimensions. Changing the dimensions of the quarter dollar coin would require that all passive coin acceptors be replaced with new models at a cost between $50 and $150. The most-probable cost assumed here was $100. Installation may be completed by existing staff during their typical 120 Teaching these units to learn and accept the characteristics of new coins involves switching the unit to learn mode, dropping multiple coin through the device and saving the resulting sensor readings to the unit’s database. This task typically takes less than 20 minutes. While ideally, all FEC machines would be upgraded before the release of new coins, completing the task within a few months after public release of new coins is not likely to significantly impact this stakeholder group. 277 daily activities, which is assumed for the low-cost estimate. For the high-cost estimate, 15 minutes of currently unbudgeted labor is assumed, while the most-probable cost estimate assumes a 15-minute per unit replacement effort and that 50% of the labor to complete upgrades is completed by employees as part of their normal work activities while the remaining 50% of the labor requires hours not currently budgeted by the amusement machine owners and operators. 4.14.3.6 Transit Officials – Public Transportation Fare Boxes In the US, some 60,000 public buses are used by daily commuters, primarily in larger cities. Of these, 40,000 buses rely upon active coin-acceptance equipment (most use EMS detection methods); the remainder of the buses relies upon driver visual recognition and acceptance of the fare as it is dropped into a clear box. Most of the 40,000 active coin-acceptance devices can be quickly reprogrammed through a software upload to recognize coins having different dimensions and/or EMS from the incumbent coins. Software uploads can be made from a small, dedicated computer with a USB connection. According to one industry expert, these uploads typically require about one minute to complete and the entire fleet of buses in any major US city can be upgraded in one weekend employing a handful of workers. This effort could be completed with existing staff without interruption to the operation of the buses. At 6 upgrades per hour, 8-hour shifts, fully loaded labor costs of $50 per hour and two days per person doing the upgrades, 18 persons could upgrade 1728 buses (approximately the number of public buses in Chicago, Illinois, which has a total of 1782 public buses [6]) over a two-day weekend. With an assumed software upload fee of $10 per bus, this would result in a total cost of $32,670 for the city of Chicago. New York City, which has 4373 public buses [7], would require a staff of 46 individuals working 16 hours each to upload the software to all buses. This would cost approximately $80,200 at a fully-burdened rate of $50 per hour and a $10 per bus software upload fee. According to one industry expert, Chicago has approximately 2000 ticket vending machines, while New York City has approximately 3000 such machines. This averages less than one ticket vending machine for each public bus in these cities. Extrapolating these limited data to all 60,000 public buses across the United States, and doubling that to account for train, subway and other forms of public transportation, one arrives at a first-order approximation of 120,000 transit ticket vending machines in the US. The impact to these automated ticket vending units is included in the section above entitled Vending Machine Owners and Operators. 4.14.3.7 Car Wash Owners and Operators This industry relies almost exclusively on quarter dollar coins, dollar coins and tokens. No change is provided by car wash coin mechanisms. Other forms of payment, including notes and credit/debit cards, are also accepted for payment. Changes to the one-cent, 5-cent, dime or half dollar coins will have no measurable impact to the car wash industry. There are approximately 300,000 car wash coin-acceptor units throughout the United States. Several types of coin acceptors are used by this stakeholder group: Dimensions-only acceptors x 278 x Sample coin comparators 121 x EMS-based units. The information gathered from various representatives of this stakeholder group showed significant discrepancies in terms of the numbers of fielded coin acceptors that exist within each of these coin-acceptor types. CTC’s assessment of these discrepancies is that of the fielded units, 30% validate based upon coin dimensions only, 50% of the units are sample coin comparators and 20% of the coin acceptors are EMS-based units. The dimensions-only units would not be impacted by a change to coin weight and/or EMS; however, they would require replacement if the quarter dollar and/or dollar coins were changed in dimensions. Replacement units would cost between $100 and $130 each; $120 was chosen as the most-probable cost. Sample coin comparators that are designed to accept multiple coins can be reconfigured within 5 minutes to accept alternative material coins having differences in dimensions, weight and/or EMS. Sample coin comparators that are designed to accept single coins would have to be replaced with multiple-coin units if alternative coins have different dimensions, weight and/or EMS from the incumbent coins. Alternatively, owners of these units may choose to switch to token-based systems, which would allow continued use of single-“coin” units. For this analysis, it is assumed that 50% of the coin comparator units will be replaced if an alternative material quarter dollar and/or dollar coins were released into circulation that differs from incumbent coins in dimensions, weight and/or EMS. The purchase price for these multi-coin units is between $120 and $175; the most-probable cost was assumed to be $150. EMS-based units can be quickly taught to recognize alternative coins. This task can be completed during existing work hours by existing staff of the car wash owners and operators. Based upon provider feedback, car wash owners and operators were found to be very hands-on individuals, they would complete all upgrades using existing staff as part of their daily activities. Therefore, labor costs are assumed to be zero for all upgrades required by the car wash owners and operators. 4.14.3.8 Merchants Four pieces of equipment common to merchants that could be impacted by changes to US circulating coins are automated coin sorters/counters, coin change makers, automated coin return kiosks, automated and self-checkout stations. Nearly all of the coin sorters/counters used by merchants (to quickly and accurately count coins in cashier till drawers, to sum the cash on hand at the end of a business day or similar coin sorting/counting tasks) rely strictly upon coin dimensions for sorting/counting operations. Validation of the coins is assumed to have occurred at the time coins were accepted (typically in 121 This type of coin acceptor relies upon use of a sample circulating coin (or token) to which all incoming coins are compared. By placing any desired coin or token into a designated holder (a task that takes less than 5 minutes), a new coin or token can be immediately used as the standard of acceptance. Units available on the market are typically designed to accept between one and three separate coins/tokens. Within the car wash industry, these units are often set up to accept quarter dollar coins, dollar coins and/or tokens. Co-circulated coins of any one denomination could be accommodated by two- or three-coin comparison-based coin validators. 279 hand-to-hand transactions) and placed into cashier till drawers or other coin collection units. Therefore, if coin dimensions remain the same as the incumbent US circulating coins, then no cost impact will be felt by merchants who use these passive coin sorting/counting devices. Costs required to accommodate changes to coin dimensions are discussed in and accounted for in the Manufacturers of Commercial Coin-Handling Equipment Section of this appendix. Automated coin change makers will not be impacted by changes to any coin’s materials of construction if the coin dimensions do not change. However, based upon input from one manufacturer of automated coin change makers, if the coin diameter is changed (by more than about 2% 122 ), then these units will require mechanical upgrades. Upgrades to accommodate changes in coin diameters are estimated to be between $50 and $100 per unit for the estimated 250,000 units currently in the US. The most-probable cost was assumed to be $75 per unit. The analysis assumes that replacement of the new hardware for any change in coin dimensions would require a simple snap-in of new coin holders – a task that would merely require a new part be sent to each merchant. The new unit would then be attached in less than one minute. Therefore, no labor costs are accounted for in the present analysis. Changes to coin thickness will result in the quick coin count scales prevalent on these devices to become useless, especially with co- circulated coins having as much as a 1% difference in stack height. Significant changes 123 to coin thickness will also require mechanical changes to these devices. For purposes of determining the conversion costs of automated coin change makers required by a significant change to coin thickness, an engineering estimate was made. Costs were assumed to be between $50 and $100 per unit; $75 per unit was assumed as the most-probable cost. Some local retailers use the services offered by coin return kiosks, like those offered by 124 Coinstar ® , Money Machine™ (by Cummins Allison Corporation) and CoinCasher™ (by SCAN COIN), to allow customers to return their loose, unsorted coins. Upgrades to these devices are accounted for in the Manufacturers of Commercial Coin-Handling Equipment Section of this appendix. A technology that has recently been gaining a foothold within the retail world is self-checkout stations having payment options that include the use of coins. These units use automated coin validators, which function in principal very much like the units used in vending machines or coin sorting/counting machines. If changes to dimensions and/or EMS were made to coins, these units would have to be upgraded in much the same manner as coin validators used in vending and other industries. A recent estimate claimed that 70,000 self-checkout lanes exist throughout North America [8]. Given their recent introduction in the retail space, and based upon input received from a few suppliers of this equipment, these units use technology that can be easily and quickly upgraded via a software upload to accept coins of different dimensions and/or EMS. 122 A reference was made to an acceptable diameter difference of a lower value in the section entitled “Additional Comments about Vending Machine Owners and Operators” in the body of this chapter. The value presented for automated coin change makers applies to the impact on automated coin change makers and is independent of the requirements of vending machines or other devices. 123 The industry was not willing to commit to a specific value to define “a significant change in thickness” without a detailed engineering assessment. However, the industry did suggest that a 10% increase in stack height would be above the expected limit that would be acceptable with today’s fielded automated change making equipment. 124 These are examples only. Their listing here does not represent an endorsement of these products by either the United States Mint or CTC. 280 The present analysis assumes that 80% of the North American units are in the US for a total of 56,000 self-checkout units in the US; to upgrade for new coins these units require a per-site service fee of between $50 and $75; and three units exist per site. A $10 software upload may be changed by some providers. The high-cost and most-probable cost scenario is a $75 per site service fee and a $10 per unit software upload fee. The low-cost scenario assumes no software upload fee and a $50 per site service fee. 4.14.3.9 Manufacturers of Commercial Coin-Handling Equipment Automated coin sorters/counters are used to quickly and accurately sort and/or count loose coins. Sorting and counting rates in excess of 10 coins per second are common in high-speed machines. They are the only practical tool to sort and/or count large quantities of coins. Industrial-scale machines, which can cost upwards of $70,000, are common at coin terminals and at central coin collection sites for transit authorities, vending machine enterprises, laundromats and other businesses that must sort and/or count hundreds of thousands or more coins per week. These industrial-scale machines typically use active sensors that inspect each piece for and sort coins by dimensions (diameter and thickness), EMS, edge profile (reeds, smooth or edge lettering) and potentially other characteristics. 125 In addition, coin-accepting kiosks that sort and count coins can be found in grocery stores, bank lobbies and other public locations. These kiosks are used to collect loose change from the public in exchange for a receipt that can be given to a nearby attendant for cash or credit towards store purchases. Given their function, these devices must be upgraded and ready for any alternative coins in advance (an estimated 6- to 12-month effort) of the Federal Reserve Bank (FRB) releasing alternative coins into circulation. The most sophisticated models of these coin-handling machines sort coins by denomination, based upon their unique dimensions, EMS and whatever other characteristics and/or properties the specific machine is designed to measure. These machines can also sort coins by incumbent versus alternative coin construction when measured characteristics and/or properties differ between the two sets of coins. This ability could be useful if doing so would be beneficial for downstream processing of the coins. Updates to the software/databases of these devices would be required as a result of changes to the EMS and/or dimensions (and/or potentially other characteristics or properties that may be [but rarely are] used for validation) of US circulating coins. These updates can be completed with a simple software push, which is assumed to cost $10 for each machine upgraded. A service call fee is also assumed for all upgrades. The cost of the upgrades was found to be between $50 and $75 per site. The low-cost and most-probable estimates, which would likely apply to fleet owners for upgrading machines during regular maintenance service calls was $50 per site and two machines per site; the high-cost estimate corresponds to a single machine residing at a remote location that requires a $75 service call. Discussions with one user of coin wrapping equipment indicated that the cost to upgrade to enable handling of coins having new materials would be minimal or non-existent assuming that 125 Manufacturers of high-speed sorting machines offer sorting technology that is rarely purchased by clients. This technology includes color recognition (a low-reliability technology) and other technologies whose fundamental measurements are proprietary. 281 no changes were made relative to incumbent coin dimensions. Changes to coin dimensions, however, would likely result in some required changes to the machines. One of the owners of coin wrapping equipment indicated that changes to coin dimensions (so long as new coins were no thicker than or larger in diameter than incumbent half dollar coins nor were they thinner or smaller in diameter than the incumbent dime coin) they could make adjustments on their machines to accommodate coin size changes without an appreciable cost to their operation. As a result, the present analysis does not include any upgrade costs for coin wrapping devices. Another class of commercial coin sorting/counting equipment relies upon passive coin- recognition technology. Some of these passive designs also include a sensor whose sole purpose is to detect if a piece is metallic. Any piece not recognized as metallic is rejected as a legitimate coin. Some models also offer magnetic separation to ferret out steel-based slugs. Many more of these passive coin sorter/counter devices are in use than the active high-speed devices mentioned above. Passive coin sorters/counters, which typically retail for $1000 or less, are often used by merchants, car wash owners and operators, FECs and others to quickly count coins in till drawers, cash boxes and other containers; others who only deal with a few thousand coins per week would also find it useful to own and use a passive coin sorting/counting device. Validation of each coin is assumed to have occurred (typically during hand-to-hand transactions) prior to placing coins into passive sorters/counters. Most units also allow for a quick visual check of the coins prior to entering the sorting/counting machine. Therefore, sorting strictly by coin dimensions (diameter and thickness) provides a quick and economical method to process coins through these passive coin sorters/counters. Assuming no change to coin dimensions, no modifications would be required for these passive coin sorters/counters regardless of changes to EMS, weight or other coin characteristics. These devices sort, count and direct all coins of given dimensions to the same container. However, if coin dimensions were changed, then extensive physical modifications would be required of passive coin sorters/counters. These modifications would typically cost between $100 and $500 per machine; $250 per machine was considered to be the most probable cost. Changes to coin dimensions would also require a two-step process to accommodate the larger number of coin dimensions between the incumbent and alternative sets of US circulating coins. This strategy was recommended by the Canadian Automatic Merchandising Association (CAMA) for their members as a result of the recently released Canadian $1 and $2 coins [9]. 4.14.3.10Coin and Currency Handlers/Armored-Car Operators These stakeholders are generally contracted by large banks to manage the bank’s coin inventories. In addition, some armored-car operators handle coin orders to and deposits from depository institutions on behalf of the FRB. These instances tend to exist where the customer base between the two organizations overlap. These coin terminal locations are authorized to hold coins owned by the FRB. The coins in stock at coin terminals are therefore the property of organizations other than the armored-car operators. Coins come into these facilities in a variety of forms: x Loose coins of a specified denomination in bags whose contents have been counted to a pre-set dollar value x Loose coins (either separated by denomination or mixed in denomination) in a variety of containers that do not hold a standard dollar amount of coins x Wrapped 282 x Mixed with other forms of cash and tokens. All FRB-owned coins must be stored and handled in loose bags of specific dollar values, depending on the denomination. Management of incoming coins varies depending upon corporate and/or local practices within any given coin facility. In some coin facilities, the contents of all incoming bags are verified by counting before the coins are passed along for additional processing. In other cases, when a customer deposits coins into FRB inventory, bags of pre-counted coins that have a well-established chain of custody and that have no obvious signs of tampering are weighed. If the weight of the bags falls within a tolerance defined by the Federal Reserve, the bags are accepted into FRB inventory on a “said-to-contain” basis and stored on metal racks. These coins may then be processed for payout to depository institutions at a later date. If differences are found during processing, they may be charged back to the depositor. One of two methods is typically employed to deal with out-of-tolerance bags that are received. Some coin facilities do not accept out-of-tolerance bags and simply return unopened bags to the originator so that the originator can correct any deficiencies. In other cases, the bags are opened, the coins counted and the appropriate adjustments completed to the client’s account to correct any deviation from the standard coin count of that bag. Should the client question any deviation, video tapes of the counting operation can be used as proof by the coin facility operator that no tampering occurred with customer coinage. Mixed coins are first sorted and counted. Depending upon the immediate needs of the armored- car operator clients, loose coins can be counted and packaged in bags of a pre-determined dollar amount or they can be rolled into standard coin wrappers. In either case, piece count is used to ensure that an accurate number of coins is dispensed into each wrapper. Sorting, counting, bagging and wrapping are completed on automated machines. Sorting and counting are typically completed on the same machine. Coin denomination is typically further verified by dimensions in the coin wrapping machine. Foreign coins, slugs, mutilated coins and other objects are screened out at all stages of handling the coins. In some operations, the wrapping step is completed by resident employees; in other instances, third-party organizations provide the wrapping services. Coin facility operators and armored car operators use commercial high-speed coin sorting/counting machines. In some instances, custom-designed and built machines are used that rely upon technologies that are similar to those used in commercial units. Coins of the same dimensions but with different EMS would require uploading the acceptance windows corresponding to the alternative coins when EMS is used as a sorting method. Changes to coin dimensions would require additional modifications to the equipment and/or to the manner in which coins are processed through coin facilities. Changes to coin dimensions would generally require that a secondary sorting be completed for non-seamless co-circulated coins as discussed above in the section entitled “Manufacturers of Commercial Coin-Handling Equipment.” Ferromagnetic-steel-based coins would require the elimination of a magnetic separator used on some units. 283 |
