| Why Bank Debit Cards Are Not the Answer for Retirement Communities. | |
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No doubt, bank debit cards are a low cost investment for your community but they will also bring little or no added value to the communities outside of perhaps one more method of payment for residents. Ultimately, you want to give your residents the convenience of only having to carry a single card while in the community for everything from Door Access and ID to transaction payments. The benefit of having an in-house debit/credit system is to eliminate bank transaction fees, encourage resident spending and accrue significant cost savings to the community (ROI). Some points to ponder: a) a bank debit card is simply a method of payment and not a POS system that will provide you with valuable reports such as item movement analysis / sales history that will allow Dining Services to plan more effectively (labor and consumption). b) a bank debit card is not the same as a meal plan. Meal plans that are purchased in advance by the resident are typically considered as part of the monthly rent and thus SALES TAX EXEMPT. Transactions paid by bank card will not qualify for this exemption. If you do offer Meal Plans to residents that include a fixed number of meals (eg. 30 meals per month), a bank debit card cannot track and reconcile these transactions, thus you will still have a manual meal tracking system to maintain. c) if your objective is to increase traffic in your food service locations (as it should be to reduce total overhead cost per resident), then you need to offer incentives to eat there. Sales Tax Exempt meals are a great way to do this without affecting your own margins (depending on your state this could be anywhere from a 5% to 8% savings). d) Bank debit cards do not manage subsidy plans for staff and departmental charges to ensure proper allocation of charges and budget controls. e) bank debit cards typically carry a "transaction charge" and a "% of sale" merchant fee (some also charge fees to the card holder although this is becoming less common now). With an in-house system such as CARDWATCH, you can set up Pre-Paid plans for residents and staff, collect their money in advance, earn interest and save on bank fees.
g) Lastly, all bank debit card processing depends on an internet connection. If that connection goes down (as it will from time to time), you can no longer process resident transactions. Not a big problem in your hair salon or gift shop but imagine a loss of connection just as you open the doors for your dinner rush. Bank debit cards are an excellent payment method for the outside world merchants who never know who their next customer might be or where they are coming from. Retirement Communities have a unique advantage in this area... and its a good idea to make use of it! ---- For more information on the CARDWATCH Meal and Spending Plan Management application suite, please contact Kevin McIntosh at 1-877-953-7575 |
f) bank debit cards require the input of PIN's by the card holder which will not only slow down service levels significantly in your dining room (eg. think about 100 seniors all having to remember then enter their PIN at every meal or transaction) but require them to walk back to the terminal to key in their number. In-house systems like CARDWATCH operate under the assumption that you already know who the resident is and that the transaction will be settled through a pre-paid or charge account. With CARDWATCH, residents simply swipe their ID card as they enter the Dining Room and all charges are automatically processed according to their pre-determined plan characteristics with absolutely no server intervention or decision making required.