Cashing In Coins and Skipping the Surcharge (Published 2011) (2024)

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By Andrew Adam Newman

AT Coinstar, which operates about 19,000 coin-counting machines in supermarkets and other spots, marketers analyze consumer data closely — but sometimes they just like to watch.

“We have videos of folks pouring coins into the machine and they’re watching the ticker go up and up and they can’t believe it, because they usually have about 50 percent more than they thought they had,” said Engle Saez, vice president for consumer experience at Coinstar. “They’re elated.”

What may come as less welcome news, however, is the Coinstar service fee, which is 9.8 percent in the United States.

Now Coinstar — with operations throughout the United States, Canada and Britain — increasingly is teaming up with retailers, who essentially pay that service fee on behalf of consumers, who in turn agree to spend their bounty with them. After tallying, instead of receiving a levied cash voucher, users choose a gift certificate for the full value of the coins from retailers including Starbucks, Gap, iTunes and Amazon.com.

For Coinstar, which receives fees for transactions regardless, the growth potential for such partnerships is considerable, because the companies promote Coinstar to their own customers on their Web sites, through promotional e-mails, and in print and online advertisem*nts.

While Coinstar, which converts $3 billion in coins annually, has offered the fee-free option from some retailers for as long as five years, the company had until recently never advertised the option. While Mr. Saez declined to say how many customers opted for no-fee gift certificates, he said that “the ratio is inordinately high” for cash vouchers.

“We haven’t told anyone about it,” Mr. Saez said. “For all intents and purposes it’s been the best kept secret out there.”

•

But now Coinstar is trying to change that. Late last year, in publications including People and The New York Times, Coinstar advertised a program where several retail outlets, including iTunes, Borders and Regal Cinemas, went beyond shouldering the fee to offer gift cards that exceeded the value of a $40 minimum coin exchange by $10, meaning that $40 in coins could be redeemed for a $50 gift certificate.

After that promotion ended on Jan. 1, iTunes made the same bonus offer for the 30 days that ended March 6, while another company, Rixty, is offering a $30 gift certificate in return for cashing in $25 in coins from March 25 through April 17.

Rixty enables consumers who lack credit cards to make cash-based purchases online, primarily for virtual goods in games like Farmville and on social networks like Facebook. When the company first started selling credits to consumers in 2009, it began by offering fee-free credit exclusively to Coinstar users.

“When we launched they were our first partner, and the great thing was on Day 1 we were live on 10,000 kiosks across the country,” said Ted C. Sorom, chief executive of Rixty. (Today there are about 17,000 Coinstar machines in the United States.)

While most Rixty consumers are adults, many are adolescents who earn cash baby-sitting and mowing lawns, but lack credit cards.

ImageCashing In Coins and Skipping the Surcharge (Published 2011) (1)

“When they go to their parents and say, ‘Can I borrow a credit card to buy a pair of virtual pants in a virtual world that you’ve never really heard of?’ the results are not positive,” Mr. Sorom said.

While his company today has numerous ways to use cash for online purchases, including Rixty gift cards available at retailers like Kmart and J. C. Penney, Mr. Sorom is partial to the freewheeling nature of Coinstar consumers.

“It is found money,” he said of their transactions. “It doesn’t come from a wallet or bank account, and people are much more willing to spend it on something on the edge of their budget, something they couldn’t justify spending money on before.”

•

Coinstar, which says it has kiosks within five miles of 95 percent of the United States population, says it has an average coin transaction of $38 and about 76 million transactions annually.

The largest coin exchange on record for the company involved Edmond Knowles of Flomaton, Ala., who in 2005 cashed in $13,084.59 — all in pennies. Coinstar sent an armored truck to Mr. Knowles’s home to retrieve the pennies.

Amazon, which has offered fee-free gift certificates through Coinstar since 2005, says spending among Coinstar users increases every year, though the online retailer declined to give specifics.

“We know there’s a segment out there that doesn’t have access to credit cards, and we also see a lot of college students who don’t have credit cards,” said Marcell King, senior manager at ACI Gift Cards, the issuer of Amazon gift cards.

More than eight million consumers stopped using credit cards in the last year, a nearly 11 percent increase in the number of consumers who forgo them, according to a recent report from TransUnion, a credit rating agency.

The latest effort by Coinstar, in pilot programs under way at both the Albertsons and Stop & Shop supermarket chains, entails a first for the company: offering no-fee gift cards at the very store where shoppers are exchanging coins.

Stop & Shop is running its pilot program for a six-month period through May at 50 stores, most of them in Massachusetts, and promoting it through newspaper circular advertisem*nts and billboards — by Eleven Inc. in San Francisco — and in-store radio announcements.

“What we’re hearing from our customers is that they like it and they’re happy with it,” said Mark McGowan, president of the Northeast division of Stop & Shop, who declined to provide preliminary data from the pilot program.

Mr. Saez, of Coinstar, said such in-store programs had enormous potential — and should have been initiated long ago.

“We’re trying to appeal to those consumers who are fee-averse by putting a product in front of them that we know is highly, highly relevant to them,” he said. “To convert coins into a grocery store gift card — that one was a no-brainer that skipped over a lot of brains here for many years.”

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Cashing In Coins and Skipping the Surcharge (Published 2011) (2024)

FAQs

Where can I change my coins for cash for free at Walmart? ›

Walmart doesn't have free coin exchange services themselves, but some locations have Coinstar coin counter machines. Keep in mind that Coinstar charges a fee, but you can avoid this by choosing a gift card option instead.

Where is the best place to cash in coins for free? ›

Your local bank branch is a good place to exchange coins. The branch will typically give you coin wrappers for free. Credit unions or community banks are more likely to have free coin-counting machines for members.

Will a bank change coins into cash? ›

You can exchange coins for cash at most credit unions and banks, but some may charge a small fee for this service. Some financial institutions provide coin-sorting machines for self-service exchanges, and others require you to work with a teller.

What is the best way to cash in coins? ›

To exchange your coins for cash, you can find a local bank or retailer that offers coin-cashing services. It pays to determine if a coin-cashing service charges a fee, so you can look elsewhere to avoid such a fee.

How do I avoid the fee at Coinstar? ›

The fees associated with using Coinstar's cash option help cover the costs of counting and sorting the coins, as well as maintaining the kiosks. If you're looking to avoid these fees, opting for an eGift Card is your best bet. You bypass the service charge and get funds to use at specific retailers and restaurants.

How much does Walmart charge to convert coins to cash? ›

If you decide to turn your coins in for cash, there is a service fee up to 12.5% + $0.59 transaction.

How much does it cost to convert coins to cash? ›

You don't have to count, sort, or roll your coins. Our big green kiosks are at grocery stores, so you can get cash conveniently, right on the spot. A service fee up to 12.5% + $0.59 transaction fee may apply. Fees may vary by location.

Do any banks have coin counting machines? ›

Some banks and credit unions offer free coin-counting services. Most limit this service to customers, and you'll find some variations in how the services work. Some have self-service coin counters on site. Others restrict the amount of change you can convert in a single visit.

How can I cash out my coins? ›

Where can I cash my coins?
  1. Your bank or credit union. Many banks and credit unions offer coin exchange services, including national banks such as Chase, Bank of America, Wells Fargo, Citibank, U.S. Bank and more. ...
  2. A local Coinstar location. ...
  3. Regional retailers. ...
  4. Paying with coins.
Oct 8, 2023

Where can I get the most money for coins? ›

To Sum Up
PlatformFeatures
American RaritiesFree appraisal, expert buyers can come to you, insured mailing service
USA Coin BookOnline marketplace, requires PayPal for payments
Hertel's CoinsLive auctions, free appraisal
GreatCollectionsOnline auctions, no fees for coins valued over $1,000
8 more rows
Jul 22, 2024

How can I quickly value my coins? ›

The value of a coin is based on its date, mintmark, mintage, and condition. Run an online search to identify what kind of coin you have, then contact a local coin dealer to assess your coin's value. Check recently sold eBay listings to see what people are paying for your coin type.

How does Coinstar work at Walmart? ›

A coin counting machine at Walmart, like the Coinstar machines you often see, operates in a surprisingly straightforward yet fascinating way. You pour your loose change into the machine, and it begins sorting the coins by their size and weight.

Does Walmart have free Coinstar machines? ›

To the best of my knowledge, coinstar machines are available in all Walmart locations, but none of them are exactly free. If you go to use one, be sure and look closely at the print on the screen, because most of them charge anywhere from 10 to 12%.

How much change can you put in a Coinstar machine? ›

(Many locations will limit how much you can exchange; typically the maximum is $500 per visit.) The upside to using Coinstar is that you don't have to count or sort your change. The downside is there is an 11.9% surcharge deducted from the total, plus a 25-cent fee per transaction.

Which supermarkets have coin machines? ›

The machines can be found at most supermarkets including Asda, Tesco and Sainsbury's. Shoppers have to insert their coins into a slot and receive a voucher which can be redeemed for cash at the till. The voucher can also be used to get money off your shopping in-store.

Do Walmart machines take coins? ›

If paying in cash, always insert your coins first, and then the paper money at a time. Use the examples provided on the machine's deposit area to properly submit your money. If you are choosing to split the bill between cash and credit, always tap the Cash option first.

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