Should You Make Your Facility Cashless – Part 4

Part 4 - Minimizing Employee Theft Opportunities

The FBI has called employee theft “the fastest growing crime in America!” The U.S. Chamber of Commerce estimates that more than 30% of business failures are caused by or related to employee theft. The Chamber also estimates that 75% of employees steal from the workplace, and the majority will repeat the theft. The American Society of Employers estimates that 20% of every dollar earned by a U.S. company is lost to theft. And in 2007 over $50 billion was lost by U.S. companies to employee theft, with the majority of these losses coming from cash handling companies in retail, hospitality and entertainment. What are you doing to protect yourself?

The first line of defense is a good Point of Sale system. Gone are the days that a simple cash register can ensure your security and accountability for monies entering your facility. Now it is imperative to have a sophisticated computer system monitoring your employees’ performance and reporting discrepancies as they occur.

Since you are reading this blog, I assume you already use a strong Point of Sale system (hopefully Pathfinder Advantage), or you are considering getting a system (hopefully Pathfinder Advantage). However have you considered removing or limiting the opportunity to handle money from your employees? By removing the ability to handle money, you are in effect removing their ability to take your money as well.

With a Cashless System, customers are given a card or some form of media in exchange for currency. This exchange can take place at a Point of Sale station, where one employee would still have access to cash, or at a self-serving kiosk, where the money leaves the hands of the customer, enters a machine where it is calculated, and then a card is dispensed for the customer’s use. The Cashless Card can then be used to purchase food and beverages, admission tickets, arcade game plays, retail, or anything else your facility sells.

Unlike a typical transaction where an employee can use schemes such as short-changing the customer, memorization of prices, and sharing with friends; a cashless system transaction is an exchange of currency, not assets. Therefore the system not only expects a specific amount of currency, but also requires it in order to finalize the transaction. It is then the card, not cash, which the employees will handle in order to finalize further transactions.

One of the hardest things for an owner or manager to keep track of is their arcade or batting cage tokens. Because of the constant in and out flow of the tokens, standard inventory control measures for preventing employee theft are nearly impossible to implement. The use of Cashless Cards to operate your arcade games and attractions eliminates the oppurtunity for an employee to steal or giveaway play tokens. The Point of Sale system simply won't allow the employee to issue a card with value without also expecting the money at the end of the shift.

Should You Make Your Facility Cashless? - Part 3

Part 3 – Selling Time

Token operated arcades have two methods of activating a game. 1. A customer can activate a game by placing the appropriate amount of tokens into the coin slot, or 2. The facility can configure the all of the machines in the arcade for “free play”. However, these two methods cannot exist in the same facility at the same time. If you want to sell access to your arcade for a time period, you have to close your arcade to all of your other customers.

One of the biggest advantages in pricing with a cashless device is the ability to sell time. You are no longer limited to the typical 50 cent play or the corporate event where all games are in free play mode. An arcade owner can have active participants paying to play each game individually, while allowing others to participate for a prepaid amount of time simultaneously.

In my experiences I have seen facilities use time play as a group package item (group members are provided an hour time play as part of their group participation), as an incentive to bring in customers during a slow period (customers purchase a slice of pizza, soft drink, and an hour of time play for $20 at lunch), and as another means to purchase play time at their local entertainment facility ($18.99 provides you unlimited rides on go-karts for an hour). Since cashless devices are not limited to arcade games, time play works excellently with go-kart rides or other attractions as well as arcade games.

You might be asking yourself, ‘what about redemption games?’ Excellent question. Most facilities would not want someone to have the ability to play their redemption games for an hour with no limitations. You’d probably be out more in redemption prizes than the money you took in for the purchase of the time play. This problem is easily addressed because cashless readers have the ability to be identified as a redemption game, and set to disallow the use of time play cards.

The next question that gets asked is 'if they have a time play, how do they play my redemption games that don't allow time play?' That's actually the simplest part. The same card that has the time play can also have regular value as well. So if they swipe the card in a game that accepts time play, the game is activated for free. But if they use a game that doesn't accept time play, value is removed from their card instead. To reduce customer confusion, you can even easily change the color of the display screen so your customers can identify which games can be played using their time play card.

Time play is another aggressive way to increase revenue through a cashless system.

Should You Make Your Facility Cashless? – Part 1

Part 1: Don’t Leave Money In Your Customers’ Pockets

When we decided to start this blog, I knew immediately that I should address the advantages of turning a facility cashless. I have been asked numerous times, “what are the advantages of the cashless system?” Unfortunately there are so many advantages, the message gets lost as a “sales pitch.” I hope with this series of posts to answer the question thoroughly while providing real life examples and solutions.

Whether you are negotiating a salary, selling a car, requesting a donation for your charity, or operating an entertainment facility; you do not want to “leave money on the table.” How often does a customer walk into your facility with a specific amount of money to spend? How often has a teenage been given x dollars to spend at your facility? Now ask yourself, how often do you feel they have walked out without spending every penny of their allowance?

Let us analyze two identical locations, FunRUS, traditional facility that does not utilize cashless technology, and JunglePlex, a fully cashless facility. For our example, let us also assume both facilities utilize the same pricing scheme. Also, you should note that the same principles would apply if JunglePlex only used the cashless system in their arcade rather than their entire facility.

After school Sue decides to go play for a while at FunRUS. Her parents have given her $20 for a fun-filled afternoon.

Across town, Matt decides to go to JunglePlex, and his parents have also given him $20.

When Sue arrives at FunRUS, she first purchases a $3 hotdog and a $2 large soda. She plays a round of miniature golf for $5, and afterwards spends $8 on go-kart rides. She cannot find anything to do with the $2 remaining, and decides to pocket it for a future purchase.

Across town, Matt was purchases a debit card in order to participate in activities at JunglePlex. After putting his $20 onto a card (either at a Point of Sale station or at a self-service kiosk), he decides to purchase a $3 hotdog and a $2 large soda. He then plays a round of miniature golf for $5, and afterwards spends $8 on go-kart rides. He also cannot find anything to do with the $2 he has remaining, so he decides to leave the facility with his debit card with the expectation he’ll use it when he comes back to JunglePlex.

Although the above examples are simplified, they are quite common. If these scenarios happen 100 times in a day, then FunRUS has lost the opportunity to receive an additional $200; while JunglePlex has received $200 in additional cash with little to no cost. It is true that Matt might return and spend that $2; however he will probably also return with another $20. Additionally, depending on your local income tax laws, you can usually defer the $2 in revenue and not pay taxes on it until it is used later.

By utilizing a cashless system, you can avoid one avenue for “leaving money on the table.” Stay tuned for more advantages that can be offered by using a cashless system.