A local bank is offering this in DC Metro area. Right now its free for non-customers too. Why would someone pay 8% commision to do this. Atleast a person with brains won't. Wait till all the banks start this and CSTR will run for its money. They might have to settle down with lower margins or do some kind of tie ups with banks.
I use CSTR machines and am long on the stock.
The primary reason I use the machines, in which otherwise I would not (because I'm a penny pincher) is because the banks around here are not open on Saturdays. I can access a CSTR machine 24 hrs/dy. I don't have time to get to the bank before closing (5:00 PM) on the weekdays and sure as hell not going to spend my lunch hour lugging coins to the bank.
Just more fuel for the longs!
Let me get this straight.
A local bank sets up a coin machine and offers it for free. Are they licensing it from CSTR>? Because if they are not I am not sure what is good about this. They are commitizing coin counting. This certainly takes away a competitive advantage if it spreads.
Fill me in.... why is the stock up? (I'm not complaining...)
This is a dubious scenario at best. Just because one bank is offering free coin changing as a promo doesn't mean other banks will follow, nor that this bank can sustain this offer. A think a much likelier scenario is that this is a trial period and once they have a foothold they will be charging the same fee, if not more than Coinstar.
funny you say that...
cause in talking with my boss about stocks, i told him i was long CSTR, and he said he was at commerce bank, where they offer the coin service for free, he put a metal cookie box-worth of change in their machine and it jammed. he said he wanted to run in and out and spent about an hour in the bank while they called someone in to remove the jamb and manually count what he had. what pissed him off even more was that when commerce tried to bring up the account that he didn't have with them, they tried to high-pressure him into opening an account. had the machine worked, it only would have given him a receipt that he would have had to take to a salesperson, who would then escortee him to the teller counter.
he said next time for the 9 cent on the dollar, he'll dump it in the cstr machine just down the road from him as opposed to driving two towns away to the commerce branch, which won't be there in the next couple of years anyway.
if there's a bank to short, commerce is it, so he says....
Convenience is why people will pay 8.9% to convert their coins to bills. When a person can convert $50 of change into bills for less than $4.50, do you think they will pay $2.00 a gallon to drive across town to a bank that will offer free coin converting services?
Banks arent interested in handling these coins. Its just the opposite on the West Coast. Less service at the banks forces people to use Coinstar. The target customer for Coinstar are young people and people with out checking or bank accounts. However I have seen grandpa and grandma using Coinstar with not even a thought about service fees.