According to the NACS State of the Industry Report of 2015 Data, ATMs generated an average of $922 per store per month in 2015—or more than $11,800 per year—among the locations NACS surveyed.
The power of ATMs in convenience stores is undeniable: Not only do the fees foster the healthy dollar amounts mentioned above, but the machines also lead to more sales and larger baskets and bring more customers into stores.
“Putting ready cash in our guests’ hands leads to incremental sales,” said Jonathan Ketchum, senior vice president of Alon Brands Retail, which operates more than 300 locations of branded 7-Eleven stores in central and west Texas and in New Mexico. Just having that cash available also usually leads to purchases larger than originally intended, he said.
Having ATMs in U-Gas and Dirt Cheap locations in Missouri mean customers typically spend their money there, COO Perry Cheatham said. “Because we are a destination, they in turn spend the cash at our stores, leaving the remainder of the cash to carry with them,” he said.
But simply having the machines is a boon to delivering foot traffic. Alon recently signed up with Cardtronics’ Allpoint surcharge-free network that encourages its millions of cardholders to visit participating locations when in need of cash.
“The access to an Allpoint ATM will drive additional guests and purchases to our stores,” Ketchum said. The chain also is upgrading both the look and capabilities of the ATMs “to give our guests a more efficient and valuable experience,” he said.
All of those customers accessing, and paying with, cash is great for store operators managing expenses. “The larger the ATM business, the less reliance on credit cards,” said Ketchum, pointing out that Alon charges only a small surcharge “to encourage ATM usage and cut down on credit cards and the resultant higher fees.”
U-Gas and Dirt Cheap also offer an incentive to customers to use the ATMs, found in all stores, which reduces credit-card fees for gas purchases. The chain, which has 33 stores, offers a 5-cent-per-gallon discount when customers pay cash. “Many customers will select the ‘pay inside with cash’ option, enter the store, retrieve cash from the ATM—therefore paying the ATM fee—then pay for their gas,” he said. “While on the surface it doesn’t make sense from a savings standpoint for the customer, they typically will get more money than they need for the gas and other purchases.”
U-Gas has even found that customers come in daily to use the ATMs at certain locations.
Alon also has another use for its ATMs: It’s about to launch an aggressive coupon and advertising campaign, with offers displayed on the ATM screen. The ATMs also will print instantly redeemable coupon offers on ATM receipts. “We see the ATM as another branding tool to get our message and promotional activity into the hands of our guests,” Ketchum said.
As a key business driver for convenience stores, the ATM is uniquely capable with a substantial repertoire of capabilities. Enticing cardholders through the door, generating direct income, lowering credit card processing fees and delivering incentives that drive incremental register rings—these are just some of the things today’s modern ATM excels at.
This post is sponsored by Cardtronics