CHICAGO -- National Automatic Merchandising Association chairman Craig Hesch, A.H. Management Group (Rolling Meadows, IL), testified this week before members of Congress that any modifications to coins or paper currency will cost the industry more than $530 million. The U.S. Treasury Department is exploring new ways to mint coins using less expensive materials. See story.
Hesch made his remarks on the state of U.S. coins and currency before the U.S. House of Representatives Financial Services Committee's Subcommittee on Domestic Monetary Policy and Technology.
Hesch testified that, with approximately 5.3 million food and beverage vending machines in use today, any changes that would require replacement, modification or reprogramming would harm the industry. He emphasized that the associated costs could result in job reductions and price increases, thereby creating an unfair disadvantage for the vending industry compared with other retail channels.
"For example, I have brought with me today a coin and bill validator. This mechanism costs $450, and takes 20 minutes to install," Hesch pointed out. "If it needs to be reprogrammed to accept a new design of a U.S. Federal Reserve note, it will cost $100 and take 20 minutes for a trained technician to reprogram the device, in addition to travel time to the location."
Industrywide, the impact would be enormous, the NAMA chairman continued. "For example, one NAMA member estimated that it would cost the entire vending industry billions," he said. "First, companies would have to spend millions of dollars on design and development to even identify equipment that is capable of handling the changes. The more drastic the changes, the greater the cost of engineering."
Hesch also thanked the U. S. Bureau of Engraving and Printing and Mint for a solid partnership, but warned of job losses if there were dramatic changes to the size or designs of currency. "Dramatic changes to the physical design such as size changes, notches, punches or cuts could result in increased costs to replace equipment, and could result in more bills being refused, resulting in lost sales," he concluded.