What … No Bill Acceptor? Think Again! Why Amusement Operators Should Think Twice About Overlooking Bill Acceptors By Chris Felix, national amusement OEM Manager for MEI May 2010 It’s become a no brainer. Soft drink and snack machines are put in the field with bill acceptors. Surprisingly though, this doesn’t hold true for amusement machines. Every week thousands of new amusement machines go to the street without bill acceptors. It seems that the big bottling and vending operators know something that amusement operators don’t. Well, for one, these operators know that bill acceptors increase revenue by 20 to 30 percent. In fact, such sales increases have been confirmed so many times that most vending operators no longer even question whether or not to use a bill acceptor. What is seen as "conventional wisdom" in the vending industry remains a relative rarity in the amusement industry. While the use of bill acceptors has grown in juke boxes, table-top games and some high-priced games, they have not yet gained widespread acceptance in video games, pinballs, and other amusement machines. Operators of those games argue that the low price per play, coupled with the machine’s high purchase cost make it difficult to justify the added expense of a bill acceptor. Yet, the reality is that amusement revenues typically see the same 20 to 30 percent increase after bill acceptors are installed — just like the vending industry. But unlike vending, where large operators have studied and quantified the benefits of bill acceptors, no one actively provides similar information quantifying the benefits of bill acceptors for amusement operators. Another challenge stems from the fact that most game manufacturers ship their games without bill acceptors because they serve both arcade and "street" channels. Instead, distributors can offer bill acceptors as an option or operators are able to install them on their own. Without accurate information of the financial benefits that bill acceptors offer, distributors often can’t provide operators with the true costs and added value comparison of bill acceptors. Luckily, operators can estimate their own return on investment pretty easily. First, they should calculate a 20 to 30 percent increase in revenue stream per machine. Then they can deduct an average price of two to three hundred dollars per bill acceptor. An amusement operator running close to industry averages will see a payback period taking much less than a year. This is a short amount of time, considering that high-quality bill acceptors have an expected life of more than eight years of heavy use. Increase Revenue Why do bill acceptors have such a positive impact on profitability? A variety of benefits contribute to that sales lift. They include: Convenience for customers. How many 50- or 75-cent plays could you support from the change in your pockets? The average customer can support one play (or maybe two), but no more using the change they carry. Now, check your wallet for bills. It's very likely that you can support four or more plays with the bills in your wallet. When it comes to money that they carry, your customers are just like you. More convenience for them leads to more plays. Encouraging multiple plays. Players purchasing credits with bills can only do so at a minimum of $1 increments. Assuming a play price of less than $1, they automatically make a commitment to multiple plays. Increased pricing flexibility. Machines equipped with bill acceptors can offer players different pricing options. For example, driving machines could be set at 75 cents per play and three plays for two dollars to encourage multiple plays. While it is possible to offer the same pricing options without a bill acceptor, the chance of a customer having eight quarters on hand is much lower than the chance of having two dollar bills. Better site relations. When an operator places an amusement machine on a client's site, they — to an extent — impose on that client to handle a portion of business transactions. When customers need change of a dollar, they will go to a client with their request. Equipping machines with bill acceptors minimizes the number of times that game players will trouble a client for change. Fewer interruptions and requests for change, coupled with increased revenue and an increase in their weekly take will make clients happier with an operator’s performance. This is important both in negotiating for new sites and in holding the best locations. Easier cash handling: Simply put, bills are easier to collect, count and transport than coins. Instead of collecting heavy coins, counting them, transporting them, and paying banks hefty percentage fees to count and accept coins as deposits, it is easier and more efficient to collect, count and deposit paper currency. Choosing a Bill Acceptor Once an amusement operator has decided to install a bill acceptor, they need to determine which one will best meet their needs. Here are some tips for finding bill acceptors that will provide better profitability in the long run: High Acceptance Rate: A bill acceptor only brings in money when it accepts a customer's money. Although this is an obvious statement, all bill acceptors do not achieve high levels of acceptance without compromising security. The industry's best bill acceptors can achieve upwards of 97 percent acceptance of street-grade money. High Reliability: A bill acceptor only brings in money when it’s in service. Look for a bill acceptor that has extremely low jam and field failure rates. Bill-sensing technology can come into play in this area. Optical systems allow the bill path to be smooth and sealed, minimizing jams and maintenance. Convenience: A bill acceptor should fit on all your applications, including over and under doors, without modification. Access for routine cleaning and service should be simple and straightforward. High Security: Real money is the only money that counts. A bill acceptor should offer good protection against both invalid bills and mechanical frauds. For mechanical frauds in particular, bill acceptors with stackers are generally more secure than stacker-less models. Service and Support: Because a bill acceptor is a complex device, it may require maintenance and service from time to time. Choose a manufacturer that maintains a network of authorized services centers that are staffed by service technicians who are fully trained to assist when needed. Bill acceptors can have a substantial impact on game revenues and an operator’s bottom line. By selecting and installing the right bill acceptor in a game, one can typically expect to see 20 to 30 percent additional revenue for seven years after an acceptor is paid for without incurring any additional expense. It is time that amusement operators take note from the vending industry and make bill acceptors more commonplace among their games. The results may make them wish they had acted sooner. Chris Felix joined MEI in 1996 which will make it 14 years this fall. He has worked in Tech Support, Industry Support, and has handled sales in both the Casino Gaming and Amusement segments of the business. Chris has been back on the amusement side for the past 6 years and as of 2008 he is the National Amusement OEM manager in charge of our OEM sales. Chris can be contacted at chris.felix@meigroup.com or 484-798-7440.