The Colorful History of Carwash Cashless Payment Systems and Their Future

Nearly every carwash operator has read an article or seen a presentation on the benefits of accepting credit cards and loyalty cards. Nowadays, the practice is commonplace, and there are dozens of equipment manufacturers that offer built-in credit card acceptance and loyalty card programs. Operators can’t swing a stick at a trade show without hitting the latest solution, but that certainly was not always the case.

Eighteen years ago accepting credit cards in the bay was unheard of and loyalty programs were nothing like they are today. Loyalty programs consisted of discounted tokens, token notes and coupon books. The concept of a card-based cashless acceptance system in the wash bay didn’t come about until Dan Yarusso needed something to set his carwash apart from the competition and save his struggling business.

Many of you may remember seeing Yarusso at the Car Care Expo trade shows in the early 1990s. He was the guy with the fish tank in his booth that had a live goldfish in it and a card reader at the bottom to demonstrate the reader’s ability to work in “wet conditions.”

Yarusso started WashCard Systems in 1990 based out of his garage in Hugo, Minn., but he didn’t invent the WashCard to be sold to other carwash operators.

“I bought my first carwash in 1989 in St. Paul, Minn., and then the city decided it was going to tear up the entire length of the main road that my wash was on,” recalls Yarusso. “I had a brand new wash, and traffic was at an all-time low once construction started. I was certain it was going to ruin me if I did not figure out something to drum up more business.”

What Yarusso thought would be a profitable side business quickly became a huge stress factor. He spent nights and weekends at the wash keeping things in repair and doing whatever he could to keep his customers happy while the road construction in front of his wash dragged on.

The road project encountered many delays and his business was on the verge of failing.

In the meantime, Yarusso’s full-time day job was with a company that designed access control technology for security systems. During this period of turmoil, he set out to use his knowledge of the technology to eliminate a pet peeve — namely being weighed down by pockets full of tokens whenever he washed down his self-service bays and washed his own vehicle.

After weeks of tinkering, he wired in waterproof access card readers into each of his bays. The readers were wired into programmed control panels in his equipment room and then hooked into the bay timers. For each swipe of an access card, the system was supposed to simulate coin drops and add time to the meter just as if cash or tokens had been used. In theory, each swipe of the card would add more money to the timer without Yarusso having to dig for more coins in the middle of a wash.

Late one weekend, Yarusso finally got the system working. He ran excitedly from bay to bay, sliding his card and adding money to the meters. After turning on all of the bays, he ran into his office to check the results. He verified the bay activity on the black-and-green terminal monitor that sat on his desk. The display showed each card swipe, a time/date stamp and associated dollar value.

With all of Yarusso’s running around, it wasn’t long before a curious customer asked him what the commotion was all about. Yarusso recalls that he may have been a bit overly excited as he motioned the customer into the bay to explain:

“OK, so I take this card and slide it through the reader, and now the bay turns on just as if I added coins into the acceptor! When I slide the card again it adds more money to the timer! I have a screen in my office that records the wash so I can track any washing that either myself or my employees do with this card. Sure beats giving employees tokens to wash down the bays, and since the first thing they do when they get in and the last thing they do when they leave is wash down the bays, it’s a time clock too!”

Yarusso remembers that the customer just stood there contemplatively rubbing his chin for a few moments before looking Yarusso in the eye and retorting, “That’s really cool. So if you can track each card use for employees, how do I get one of those cards for myself?”

Realizing the system’s true potential, a grinning Yarusso ran back into the office and entered a new card into the system. He got his first card customer right there on the spot.

Yarusso drew an arrow on the card and hand printed the word “slide” with a black marker to indicate which direction to slide the card through the reader. After he handed the card to the customer, they agreed to settle his bill on the first of every month for any washing that he or his family did using the card.

Several weeks later the same customer came back with a friend who wanted his own card. “My buddy told me about how he washes without needing tokens; that is so great!” the customer said. “So what do you call it anyway?”

Yarusso pondered for a moment, and then with his Magic Marker wrote two words on the customer’s new card that would forever impact the carwash industry: Wash Card.

It didn’t take long for Yarusso to realize he had something that no other carwash could offer its customers. He spoke with friends, family and local business owners and set them up with their own accounts. He then went to the police departments and small businesses in the surrounding area and won their washing business, which ultimately carried him through the remaining period of road construction.

In no time, he had six local police and sheriffs departments on account, and the WashCard was soon catching the eye of other carwashes. A few operators asked Yarusso if he would build them card systems of their own, but he politely turned them down in order to maintain his competitive advantage.

“Why would I give them the ability to directly compete with me?” notes Yarusso. “Once somebody had my WashCard they would never even consider washing anywhere else, even if it meant driving to the other side of town.”

Yarusso says the experience revealed that businesses that had purchased $50 in tokens or token notes each month would double or triple their monthly washing expenses once they were put on an open invoiced account with the WashCard.

Before long, word spread about the “wash with the cards,” and out-of-town carwash owners began offering Yarusso good money to build them their own card systems. Eventually he agreed to build and install Wash- Card systems for several carwashes throughout Minnesota and Iowa.

As interest in cashless payment systems started to catch on, Yarusso faced some difficult decisions. He could keep his full-time job and continue selling WashCard locally on the side, or he could take his idea on the road.

In retrospect, Yarusso says his decision was an easy one. He subsequently spent the better part of the next 10 years traveling to numerous trade shows telling carwash owners about the profit-building potential of adding a card system to their carwashes.

As carwashes began to attribute substantial, increased profits to their WashCard System, competitors inevitably began appearing on the market. In fact, some existing WashCard customers felt so strongly about the idea of the cashless carwash system that they decided to build and sell their own systems. Names like Express Key and eWash became Wash- Card’s first competitors.

The notion of replacing dirty tokens with cards, keys and bar codes swept through the industry as consumers began demanding such conveniences. In fact, the real challenge for these cashless pioneers had little to do with convincing consumers of the value; instead, it was skeptical carwash owners who took some convincing in the early years of cashless adoption.

Today, the number of cashless payment solutions at carwashes has skyrocketed as consumers have grown accustomed to the convenience of using their credit or debit cards in many aspects of retail. If they use their plastic to pay for gas and groceries, why not soap and water for their cars?

Customers today place nearly as much importance on how they can spend their money as they do on where. Credit, debit and gift cards have changed how consumers spend money. This “buy now, pay later” mentality increases the dollarper- ticket earnings of every wash, and statistics show that prepaid loyalty gift card sales increase customer visits by 2.5 times a month.

Cashless systems fulfill consumers’ desire for payment convenience and also provide operators an easy solution for offering commercial fleet accounts. At the rate in which cashless payment options are growing, wash owners who are not capitalizing on credit card and loyalty card acceptance solutions will likely feel the impact of these missed opportunities for years to come. In the near future, cash sales will no longer be the primary form of payment by the majority of your customers. Saving cash receipts and passing out tokens will recede into the past as more business owners with company vehicles have the capability to run their own activity reports, manage their employees and pay their carwashing invoices online.

Online account management and purchasing transactions for carwashes are now just as secure as online banking. Those businesses that fail to embrace this level of customer convenience will find themselves with a problem far worse than road construction outside their operations. Convenience is king. Failing to adapt will likely send customers looking for a location that offers loyalty cards or allows them to easily use their credit or debit cards.

Advances in technology will continue to play a large role in how carwashes and other businesses operate in the future. Some carwashes now have CEOs and influential investor groups funding the continued growth of their companies. It is crucial for individual wash owners to re-evaluate how they conduct their businesses.

The carwash industry is full of new technologies and solutions to help bring in new business and maximize the business you already enjoy. Ask your sons, daughters, nephews and grandkids how they pay for goods and services. I can tell you that most do not pay with cash. Will your carwash business struggle or thrive when these card-carrying customers obtain their own vehicles and become your primary target demographic?