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ATMs – A Money-Maker for Retailers

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What do CVS, Costco, and Publix have in common? They all have ATMs.

ATMs are increasingly present in the retail environment and the arguments for having them are pretty compelling. They can increase annual store sales by up to 25% because of impulse buying; they allow customers to access available cash from their credit/debit and bank cards; they can keep your customers in the store, so they don’t have to leave to get cash from a different ATM; they can reduce or eliminate the possibility of bad checks.

Readily available cash reduces credit card usage and the fees that go with them. ATM’s also generate store traffic from people walking by, who see your ATM sign. More importantly, stores receive additional revenue from every transaction.

According to the American Bankers Association, 66 percent of all ATMs in the U.S. are privately owned machines located in retail establishments. Those ATMs process more than 10 billion transactions a year.

ATMs also generate customer loyalty. Shoppers know you have an ATM in your store—often people like to use the same ATM and it becomes an almost go-to point when they’re out and about.

An ATM can become a selling tool as well as a revenue stream. A small retailer can sell ATM on-screen advertising to those manufacturers whose products are in the store, resulting in greater product awareness and potential sales. A restaurant or store in a tourist destination can offer direct currency conversions to attract foreign tourists, enticing them to stay and eat, or shop.

Even though credit cards and electronic payments are prevalent, there is still a big demand to use cash. In 2012, there were 1.2 billion debit card cash-back transactions averaging $40, compared with 5.8 billion ATM cash withdrawals with an average value of $116 (based on a 2013 Federal Reserve Payments Study). The same study reported that total value of cash back from general-purpose debit card transactions was over $49 billion, while total value of ATM cash withdrawals was over $670 billion.

This is promising for stores with ATMs, since consumers are likely to continue to pay for the convenience of being able to access their cash.

Costco, Walgreens and 7-Eleven all share Co-Op Network ATMs. These surcharge-free ATMs enable customers to save money, by not paying surcharges when withdrawing cash at these retail outlets. The Publix grocery chain also uses the Co-Op Network, which will increase ATM access for Co-Op cardholders across the South, where the stores are based. Co-Op cardholders will have surcharge-free access to more than 800 ATMs in 741 Publix stores, most of which are in Florida.

The variety and versatility of ATMs make it possible for any size store to capitalize on this money-making installation. Retailers and restaurants have a multitude of choices as to what kind of ATM machine they can get. When stores lease or buy an ATM, they set the transaction fee customers are charged when they use it, and this fee goes directly to the store. Even though ATMs require some time and money to maintain, it’s minimal compared to the income these machines generate.  If a retailer has an ATM placed, they get a percentage of the revenue and they won’t have to do any of the maintenance.

All in all, ATMs provide a sales and revenue generator—they provide shoppers with cash they still insist on carrying, and they bring retailers additional traffic from consumers who come in for cash and walk out with a purchase. Whether this is prompted by impulse or intent hardly matters—what really counts is increased traffic and sales.

TAGS: retail, retail trends, retailers,
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