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May 4, 2003
Convenience Store Decisions magazine
ATM Network delivers quick cash to Little Stores
ATM advantages
Aside from increased customer spending and significant residual income, offering ATMs provides retailers with several other advantages:
Increased traffic. Customers look for retail locations with ATM access.
Easier bank and credit card acceptance. ATM Network machines accept all major credit cards, but unlike accepting them at the register, the retailer doesn’t incur a 2% fee. Also, it frees up the register from time-consuming credit card transactions.
Reduced time and risk accepting checks. If customers have a checking account, it’s likely they have an ATM card. Retailers can reduce instances of accepting checks and in turn encourage the customer to use the ATM.
More than 150 million Americans have ATM cards, recording in excess of 12 billion transactions a year. And if any of those Americans are in the Upper Midwest area, Mike McKinney wants them to know that all of his 19 Little Stores are equipped to accommodate them.
Five years ago McKinney couldn’t say that. He had bank-leased ATMs in just four of his stores because standard lease agreements made it difficult to make enough profit to justify the expense of expanding the offer. But as McKinney saw the cost of ATMs coming down in recent years, he wanted to reinvestigate the possibility of taking them chainwide. That’s when he discovered ATM Network, Inc. (www.atmnetwork.net), which helped him make all of his stores an ATM destination.
“We investigated a lot of different companies and relationships with other banks,” says McKinney, president of Best Oil (Cloquet, MN). “ATM Network’s presentation had all the facts. They were well prepared and we felt they could serve us best. As of May, our last bank-lease agreement will expire at three of our stores. Once [the agreement] is up, we’ll have ATM Network machines chainwide. And I’m very excited about that-we’ll finally be able to say that we have ATMs offered at all of our stores.”
McKinney is eager to get the word out. He already does considerable advertising for his stores-newspaper and radio ads as well as signage along major highways. McKinney spent between $5,000 and $7,000 per machine over the years including utilities and phone lines, an investment he says has been well returned. He charges a $1 surcharge, and his busier stores do 30 to 50 transactions per day, which translates to $1,000 a month in revenue at each of those locations. But it’s not just the initial profit that makes McKinney smile-those customers are putting their withdrawal money back into his hand. “My managers say that two-thirds of the customers using the ATM turn around and make purchases in the store,” says McKinney. “ATM isn’t as profitable as gas, cigarettes or car wash for us, but it’s a significant ‘other income’ for us. With decreased gas margins, this is another place we can create a profit.”
Even though ATM is a small piece of McKinney’s pie, it’s one he doesn’t have to worry about thanks to his relationship with ATM Network. Customers know all of his stores offer ATMs thanks to the signage provided by the company free of charge-as many banners, lighted sign and pole signs as McKinney needs. The vendor also provides exceptional technical support.
And if a technician is needed, ATM Network has a full staff of in-house employee service technicians as well as a database of service technicians nationwide who can be on-site immediately tending to a retailer’s specific needs, according to Phil Rock, president of ATM Network.
“We’re constantly looking at the machine through the merchant’s eyes. If they’re experiencing visual problems with the screen or the machine looks worn, we want to resolve those issues immediately,” says Rock. “We’re dealing with time-starved retailers- there are so many facets to their business, they don’t want to spend too much time worrying about the ATM machine.
“In a c-store, there are different slivers of a whole that equal a business’s success,” Rock adds. “ATM machines are not the biggest slice, but it’s very important to today’s consumer-they expect it. We try to make it as easy and effortless to offer customers this option.” McKinney, impressed with ATM Network’s responsiveness, is grateful his supplier is just a phone call away to help him take care of minor situations himself.
“If there’s a problem with a machine, 90% of the time they can take care of it over the phone with no technician needed,” he says. “And it helps knowing that the machine isn’t going to be down-meaning that I would have to turn customers away.”
