Amazon Goes Digging for Loose Change
The leading online retailer has made loose change a payment option for online purchases by hooking up with Coinstar Inc., a provider of electronic cash processing units in thousands of grocery stores. Coinstar will let people trade their pennies, nickels, dimes and quarters for certificates redeemable at Amazon.com.
National cable TV ads will premiere in November and serve as the chief means to promote the e-certificates.
"Amazon has always tried to find ways of making shopping more convenient," said Toni Reid, director of business development at the Seattle Web retailer. "By having our brand and gift certificates available at thousands of kiosks, we've done just that."
Normally, Coinstar machines charge users an 8.9 percent fee for turning the change into cash. However, there's no cost in the exchange for certificates from Amazon, which compensates Coinstar for the waived fee with an undisclosed payback.
The Amazon deal is not the first one that Coinstar has inked with retailers. In 2004, it tested a similar program that offered Starbucks gift cards as a swap for loose change. The Starbucks cards have since been rolled out in kiosks nationwide.
According to Coinstar's research, 80 percent of U.S. households use containers to collect an average of $99 worth of loose change. In total, the company said, the spare coins market is $10.5 billion.
So far, the program with Amazon has been implemented in 4,000 grocery stores, though that number hits 5,000 as the rollout continues into January. Some of the units also accept dollar bills. And whether it's cash or coins exchanged, the machines immediately discharge an Amazon certificate for shoppers choosing that option.
Coinstar and Amazon launched a weeks-long pilot in July to test the viability of a joint venture before going headlong into implementation.
"It's far too early to be giving out response numbers [for the Amazon venture], but what we can tell you is that both companies were pleased with the pilot enough to go into rollout," said Gretchen Marks, vice
president of marketing at Coinstar, Bellevue, WA. "We did a study with people who were part of the [Starbucks] pilot and found that 93 percent of them thought having this shopping option with no coin counting fee was very motivating."
Christopher Heine covers CRM, analytics and production and printing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters