NEW ORLEANS - "The dollar coin is here," said Thomas E. McMahon, senior vice-president and chief counsel for the National Automatic Merchandising Association. "It took us almost 12 years to get this coin; how is it doing?"
McMahon moderated a panel discussion at the NAMA National Expo here to discuss the progress of the Sacagawea "golden dollar" since the Mint began producing it in January. Panelists were Carolyn Murphy, U.S. Postal Service; Al Krueger, The Estey Corp. (Portland, OR); John Rasmus, American Bankers Association; Bill Buckholz, Goodman Vending Service (Reading, PA); and Tim Riley, U.S. Mint.
Riley emphasized that the Mint has a strong, continuing interest in the success of the new coin, and he thanked the vending industry for its assistance in getting the golden dollar into the hands of consumers nationwide.
"The coin is being accepted," he reported. "Ninety-one percent of all United States consumers know about it, and 78 per cent support it. About 50 percent have seen, or received, one."
Well over a billion of the new coins have been minted and distributed to Federal Reserve banks and large users, Riley said. Even so, a very substantial number of consumers report that they have heard about the coin, but still have not seen one. "Why?" he asked. "There are over 600 million of the coins in circulation, and nearly 400 million in Federal Reserve banks. We have them in inventory, and we will continue to produce them. We have made more of these coins than we made Susan B. Anthony dollars."
Eighteen of the largest transit systems in the United States now use the coin, and it has found favor not only with the vending industry, but also with car wash operators, the U.S. Postal Service, and a growing number of municipalities that run parking meters. "And banks are beginning to commit to handing out dollar coins rather than dollar bills," he added.
What now must be done is to get people who receive the coins to spend them. "We have to use these coins; they make everyone's lives easier," Riley emphasized. He urged operators who have not already done so to modify their equipment to accept the golden dollar, dispense them from their changers, and make sure that Sacagawea-ready machines are identified as such. "Get those coins out there," he urged.
Carolyn Murphy reported that the U.S. Postal Service operates more than 36,000 vending machines which can accept payment of 50 cents to $50; the maximum purchase price is $33. The need to dispense change conveniently for high-value purchases accounts for its ongoing interest in a circulating dollar coin.
John Rasmus noted that, so far as he knows, he is the first banking person to attend a vending convention, and observed that he had found the experience very helpful in understanding the vending industry's issues.
"From the bankers' perspective, the golden dollar got off to a rocky start," he admitted. "Their perception was conditioned by their experience with the Anthony dollar in the late 1970s; many customers blamed the banks for the SBA's failure, which wasn't fair. The Mint created a demand, and dovetailed the introduction of the new coin with the rollout of the commemorative state quarters. The launch of the new $1 coin represented a departure from the traditional coinage distribution system; a large national retailer got the coins before most bankers could get them," Rasmus added. "Banks thus felt they had a public relations problem, because they had to tell their customers that they couldn't provide the coins." Some banks went so far as to dispatch tellers to that retailer's stores to obtain the coins, he noted.
The Mint responded promptly to this problem, the banking expert explained, working with trade associations to keep communications open, and listening to bankers' complaints. A distribution program was implemented quickly, allowing batches of 6,000 coins to be shipped to banks that wanted them. "It worked," he said. "The supply problem has been mitigated; complaints have declined."
That said, it remains true that not all banks are enthusiastic about the new coin. "No one tells a bank what it has to offer," Rasmus pointed out. "I think some banks are not ordering golden dollars, perhaps because of 'SBA fear.' Until the coin succeeds, other bankers will say, 'We have the coins, but retailers and other customers aren't asking for them'."
On the other hand, some banks are running promotions based on the new coin, to attract new customers; the American Bankers Association is working to bring the message to its members. "We're informing them of the options, and telling them what people are doing out there," he emphasized. "If you go to our website, you'll see the new coin with our logo." ABA also is working with the Bureau of Engraving and Printing to resolve challenges presented by the ongoing redesign of U.S. banknotes, Rasmus added.
"Anecdotally, we've heard of some opposition to the dollar coin by retailers, here and there," he concluded. "Ultimately, the public will decide."
Krueger, who was in charge of The Estey Corp.'s early adoption and deployment of the Sacagawea dollar, recalled that he experienced some initial difficulty in obtaining the coins he needed. "I had to talk to two banks and the Federal Reserve in order to get $300,000 in inventory," Krueger said.
Estey Corp. runs restaurants and gift shops in addition to its vending business, the speaker explained; so the company had not only to get the coins into its changers, but also into these manual retail outlets. "Acceptance was difficult," he observed. "Our 30 restaurants were ordered to use the coins; after 30 days, six of them had stopped, claiming that their customers didn't want dollar coins."
At present, locations representing half of the company's vending volume has access to the coins; "We're getting as many as 57 percent of them back," he said. Those accounts also have changers equipped to recognize the new $5 note. "And I'm doing all I can, individually, to promote the coin. I pay for my gasoline and my groceries with rolls of golden dollars."
Buckholz, a long-time advocate of a circulating dollar coin, stated that the new $1 coin is working. "I'm glad of it," he emphasized. "I had been critical of the Mint, but they're incredible , they're proud of the new coin, and we all owe them our thanks.
"It is successful," the Pennsylvania vendor emphasized. "It has made for happier, more efficient lunchrooms all over the United States. It's a wonderful vending coin, and you all know that. But there's more work to do.
"Until the public knows that the dollar bill is old-fashioned, we won't get the full benefit of the new coin," the speaker warned. "We have a job to do. Some operators are saying, 'Why not just wait for card payment systems?' Maybe these will come along, and maybe they'll work; but don't hold your breath," he urged. "Meanwhile, there's a real opportunity with the new coins."
Despite all the progress that has been made since the spring, Buckholz observed, "We're still pounding on doors. During the first phase, banks couldn't get the coins. They still say that, but it's not true.
"The banking industry could have helped us a lot, but it didn't," Buckholz complained. "Of course, people will get frustrated, and will stop asking for the new coin. In my opinion, the banks have obstructed acceptance of the dollar coin. Vending has been in the lead, because we can do things personally. Most machines run by bottlers don't accept the Sacagawea coin. We can tell them, 'You're giving the vending industry a bad name; convert your machines!'
"And get your employees to spend $10 in golden dollars every week," the speaker advised. "Put your gasoline card aside and pay in dollar coins; keep a couple of rolls in your car. I claim that, if 10,000 vending operations can put $75 in new coins into circulation every week, over 52 weeks, we can make a real difference."
Buckholz also urged operators to implement a "just ask" program, requesting their change in dollar coins when they make a purchase. He also emphasized that operators are good customers of banks; "The banks need us," he said. "So tell your bank to put up a sign acknowledging that there is a new coin. If you ask them, they'll usually do it."
It also is important to keep the crux of the matter in mind, the veteran vendor concluded: "If the dollar bill were eliminated, everyone would forget all about it after ten days."
McMahon explained that the Pennsylvania Automatic Merchandising Council persuaded the state legislature to pass a nonbinding resolution asking state agencies to favor the use of dollar coins in transactions with the public; this request was made of state colleges and universities. "We'll try it in other states, too," he said.