The Top 5 Cash Businesses and Why these businesses need an ATM
As business owners look for ways to increase their revenue, it is important to remember how different forms of payment can affect your income: Customers carrying cash are more likely to spend more than those who don’t. We mentioned in a previous post that cash is also the dominant payment method for transactions under a certain dollar amount. This in mind, Nationallink, the largest ATM processing company in the Western United States, has compiled a list of the top 5 cash businesses in which an ATM on site would be ideal.
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Convenience Stores
In 2016, convenience stores raked in a whopping $550 billion in sales. As reported before, the Federal Reserve of San Francisco states that cash dominates transactions totaling $25 or less. An ATM provides customers looking for a quick snack with the cash they need. When customers have cash in hand, they also give in to impulse purchases. One example is donuts; CNBC reports that convenience stores sold $580 million worth of donuts in 2014. These treats are ideal for cash purchases because of their low cost and impulse factor. Placing an ATM at a convenience store will encourage customers to add items to their purchase, thus generating additional income.
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Donut shops
Donuts shops are a prime example of a cash business: the transactions are relatively small because customers are trying to get their maple bars, apple fritters, crullers, and coffee, and continue their commute. While credit card fees won’t be too impactful on the relatively high profit margins, the longer transaction time can cause delay. One popular donut chain reportedly brought in $614 million dollars in 2016, servicing 3 million people a day at its locations nationwide. Moreover, CNBC reports that donut sales increased by 6% between 2014 and 2015. This increased popularity means that placing an ATM at a donut shop will drive customers to use cash.
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Nail Salons
People spent $8.51 billion dollars at nail salons in 2015, 42% of those transactions were paid for using cash. There are two ways to look at the benefits of using cash at a nail salon: Cash is much easier to manage for patrons because it allows them to complete the transaction rather than charge it and gives them the freedom tip as much as they like. For business owners, using cash eliminates annoying credit card fees and entices customers to leave a larger tip. Placing an ATM inside a nail salon will encourage customers to withdrawal from it, thus generating passive revenue as well.
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Parking Lots
Every metropolitan has them: the large, open spaces near concert venues, arenas, theatres, and nightclubs. They are a necessity for those visiting cities dominated by high-rise structures yet lacking in parking. These small pieces of valuable land brought in over $10 billion in revenue in 2014. A good portion of parking lots are cash only, with others accepting cash and card. Placing an ATM on a parking lot will supply people with the cash they need for their outing as well as their parking fees. Those without cash will also not be turned away from using your lot if they see that an ATM is readily available for them.
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Thrift Stores
The great recession brought out a level of untapped resourcefulness in cash-strapped consumers struggling to afford clothing, shoes, and housewares. This means that working class families, students, and professionals were more likely to pay $10 in cash for a gently used item than swipe their card for a $125 brand new one. American consumer’s newfound resourcefulness equated to $13 billion in revenue in 2012. As the stigma of thrift stores began to wane, many owners adopted a boutique-like approach, offering designer brands at thrift store prices. With a number of these resale stores only accepting cash, placing an ATM inside a thrift store will appeal to resourceful customers too timid to charge their purchase. It will also help cut back on those annoying credit card fees, which can be especially helpful if you donate any proceedings to charity.
Cash has consistently been the dominating payment method in the above industries because the average transaction is relatively small. Having cash readily available increases the chance that customers will spend more. An ATM is a great way to generate passive income while tempting your customers to spend a little more. NationalLink has a variety of programs to accommodate your growing business, allowing you to collect the passive revenue that comes with a free ATM placement.