Success Stories

Southland Auto Wash, Grand Rapids, MI

One full-service carwash and two express washes

Volume Per Vehicle Jumps By More Than One Third When Customers Pay With Credit Cards

In the past, customers would often apologize when they paid with a credit card at Southland Auto Wash, a chain of one full-service location and two "Express Washes" in the Grand Rapids, Michigan area. "Many of our customers were inhibited about using cards, because they didn't want to hold up the line and make everybody wait," said owner Mark Ellis.

These customers were right to be concerned. Like other dial up systems, the card clearing equipment used at Southland probably took 10-15 seconds to authorize credit transactions. Although not a lot of time by many standards, that could seem like an eternity to customers lined up at a busy carwash on Saturday morning.

For his part, Ellis didn't feel any particular pressure to speed up the card clearing process. Few customers paid with plastic, which was just as well with him, since card transactions involved fees and took longer than cash sales. "I never thought about encouraging people to use their credit cards," he said. "At least not until recently, when I saw what they could do for my volume."

What changed Ellis's mind was a study that he and DRB Systems conducted of credit card transactions at his full-service location. The study looked at 101,005 exterior and full-service transactions (about 26% of them credit card sales) that took place at the wash over a one-year period. Going into the study, Ellis and DRB Systems expected that the average ticket for credit card sales would be higher than it was for cash transactions. After all, it's well known that consumers tend to spend more per visit when they pay with plastic, because they're more focused on what they want rather than price.

However, Ellis and DRB Systems were both surprised by the size of this difference. Analyzing sales at Southland, we found that customers spend $14.90 per visit when they paid with credit cards, compared to $10.94 when they used cash. That's a difference of $3.96, or 36.2%! Looking at the data further, we learned that this difference was due to two factors:

• Customers were more apt to purchase a full-serve wash when they paid with credit cards.
• Credit card customers were also more likely to trade up to a higher priced wash package.

The results of this study convinced Ellis that he should try to encourage more customers to use credit cards by making the clearing process faster. He did this by installing SiteWatch Xpress Card Clearing from DRB Systems.

Using advanced Internet technology, SiteWatch Xpress Card Clearing authorizes card transactions in three seconds or less, considerably faster than the standard dial up connection that Ellis had been using. "The faster processing has definitely encouraged our customers to use their credit cards more freely," said Ellis. "By clearing card transactions much faster, we've removed a major obstacle that discouraged credit customers in the past."

Ellis picked a good time to enhance Southland's card clearing ability. According to the American Bankers Association, credit and debit cards dethroned cash as the most popular form of retail payment in 2003, and they're projected to claim an ever-increasing share of the market in the future. So, like all carwash operators, Ellis can expect more and more of his customers to say, "charge it" in the future. Thanks to SiteWatch Xpress Card Clearing, he'll be able to process all of them fast.