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coin changer

Vending machine

A vending machine is a machine that provides various snacks, beverages and other products to consumers. The idea is to vend products without a cashier. Items sold via vending machines vary by country and region.

In many countries, vending machines generally serve the purpose of selling snacks and beverages, but are also common in busy locations to sell other items such as newspapers.

Some countries sell alcoholic beverages such as beer through vending machines, while other countries do not allow this (usually because of dram shop laws).

A number vending machine is also used at many outlets, where a customer has to press a button on the machine and a number is printed on a slip of paper and the customer has to wait until his number is called by the service provider.

Cigarettes were commonly sold in the United States through these machines, but this practice is increasingly rare due to concerns about underaged buyers. Sometimes a pass has to be inserted in the machine to prove one's age. In some countries like Germany and Japan, by contrast, cigarette machines are still common. Vending machines were used at airports from the 1950s well into the 1970s to sell life insurance policies covering death in the event that the buyer's flight crashed. Such policies were quite profitable, because the risk of any given flight crashing was (and remains) very low, but this practice gradually disappeared due to the tendency of American courts to strictly construe such policies against their sellers, such as Mutual of Omaha.

History

The first recorded reference to a vending machine is found in the work of Hero of Alexandria, a first-century engineer and mathematician. His machine accepted a coin and then dispensed a fixed amount of holy water. When the coin was deposited, it fell upon a pan attached to a lever. The lever opened up a valve which let some water flow out. The pan continued to tilt with the weight of the coin until it fell off, at which point a counter-weight would snap the lever back up and turn off the valve.

Despite this early precedent, vending machines had to wait for the Industrial Age before they came to prominence. The first modern coin-operated vending machines were introduced in London, England in the early 1880s, dispensing post cards. The first vending machine in the U.S. was built in 1888 by the Thomas Adams Gum Company, selling gum on train platforms. The idea of adding simple games to these machines as a further incentive to buy came in 1897 when the Pulver Manufacturing Company added small figures which would move around whenever somebody bought some gum from their machines. This simple idea spawned a whole new type of mechanical device known as the "trade stimulators". The birth of slot machines and pinball is ultimately rooted in these early devices.

Compare a coin-operated pay toilet.

Mechanism

After paying, a product may become available by:

  • the machine releasing it, so that it falls in an open compartment at the bottom, or into a cup, either released first, or put in by the customer
  • the unlocking of a door, drawer, turning of a knob, etc.

Sometimes the product is not just released, but prepared; this may be the case e.g. in the case of coffee, french fries, or a ticket that is printed after paying.

The main example of a vending machine giving access to all merchandise after paying for one item is a newspaper vending machine (also called vending box). It contains a pile of identical newspapers. After a sale the door automatically returns to a locked position. A customer could open the box and take all of the newspapers or, for the benefit of other customers, leave all of the newspapers outside of the box, slowly return the door to an unlatched position, or block the door from fully closing, each of which are frequently discouraged, sometimes by a security clamp. The success of such machines is predicated on the assumption that the customer will be honest (hence the nickname "honor box"), which is helped by the fact that having more than one newspaper is not often useful.

Compare a coin-operated pay toilet.

Japanese vending machines

In Japan, with a high population density, limited space, a preference for shopping on foot or by bicycle, low rates of vandalism and petty crime, and a small and decreasing number of working-age people, there seems to be no limit to what is sold by vending machines. While the majority of machines in Japan are stocked with drinks, snacks, and cigarettes, one occasionally finds vending machines selling items such as bottles of liquor, cans of beer, fried food, underwear, iPods, porn magazines and sexual lubricants, and potted plants. Japan has the highest number of vending machines per capita, with about one machine for every 23 people.

The first vending machine in Japan was made of wood and sold postage stamps and post cards. About 80 years ago, there were vending machines that sold sweets called "Glico". In 1967, the 100-yen coin was distributed for the first time, and vending machine sales skyrocketed overnight, selling a vast variety of items everywhere.

In Japan, vending machines are known as 自動販売機 (jidō-hanbaiki) from jidō, or "automatic"; hanbai, or "vending"; and ki, or "machine", 自販機 (jihanki) for short.

In 1999, the estimated 5.6 million coin- and card-operated Japanese vending machines generated $53.28 billion in sales. Vending machine goods and services can cost as little as 80 and as much as 3,000 yen.

With the introduction to services such as "Osaifu-Keitai", cell phones can now be used to pay for the items bought from these vending machines more easily.

Scheduled for introduction in 2008, a smart card called taspo will restrict sales of cigarettes from vending machines. An embedded integrated circuit will contain information about the age of the cardholder.

Australian gemstone machines

In Australia, where gemstones are commonly mined, vending machines selling gemstones have appeared. The machines, usually converted candy machines, sell gemstones for approximately A$2.

Automatiek

A common type of snack bar in the Netherlands is called automatiek and is similar to an automat. It has a wall lined with coin-operated machines. Each has a vertical row of little windows, with a (usually hot) snack behind each, e.g. a croquette, a frikandel or a hamburger.

After inserting a coin into a slot, an individual opens one of the windows and removes a snack. The machines are heated so that the snacks stay hot. Behind the machine is the kitchen where the snacks are prepared, with the little windows being re-supplied from the back.

In addition, a snack counter for food less suitable for vending machines is usually available in the same area (example: french fries).

Automatieks may or may not provide chairs for customers. Sometimes the vending machines are in an outside wall, and no shelter is provided.

These vending machines are often located at railway stations or in busy shopping streets. One large chain of these automatieks is FEBO.

Bulk candy and gumball vending

Bulk candy machines are entirely mechanical machines that vend a handful of candy, a bouncy ball, or perhaps a capsule with a small toy or jewelry, for one or two coins. The items may be unsorted; in that case what the customer exactly gets is subject to chance.

The gross margins in the bulk candy business can be quite high — gumballs, for instance, can be purchased in bulk for 2 cents apiece and sold for 25 cents. Gumballs and candy have a relatively long shelf life, enabling vending machine operators to manage many machines without too much time involved. In addition, the machines are typically inexpensive compared to soft drink or snack machines. Many operators donate a percentage of the profits to charity so that locations will allow them to place the machines for free.

Bulk vending may be a more practical choice than soft drink/snack vending for an individual who also works a full-time job, since the restaurants, retail stores, and other locations suitable for bulk vending may be more likely to be open during the evening and on weekends than venues such as offices that host soft drink and snack machines.

Full line vending

A full line vending company may set up several types of vending machines that sell a wide range of products. The types of products include candy, cookies, chips, fresh fruit, milk, cold food, coffee, bottles and/or cans of soda, and even frozen products like ice cream. These products can be sold from various types of vending machines that include coffee, snack, cold food, 20-oz. bottle machines, and glass-front bottle machines. Almost all machines accept bills with more and more machines accepting $5 bills. This is a great advantage to the vendor because it virtually eliminates the need for a bill changer. Larger corporations with cafeterias will often request full line vending with food service. Vending companies that offer both have a competitive advantage in acquiring accounts because it makes it much easier to deal with one company for both services.

Healthy vending

Healthy vending machines are machines that offer a range of healthy vending options. They offer a variety of healthy beverage and snack products and typically do not carry products that are high in saturated fat and sugar. Some machines offer whole meals and organic snacks and are typically found in schools and health clubs.

Specialized vending

Some types of vending machines are those that dispense personal products, typically in public toilet facilities. The machines in ladies' restrooms typically sell some form of absorbent device for menstruation such as a pad or tampon. The machines in men's rooms, when they are present, are most commonly used for the sale of condoms, though in some locations they may be found dispensing cologne, medicine, small candies, or even pornography. These are often found at toilets used by transient persons in high traffic locations, such as bus stations, shopping centres, airports and service stations.

Safety

Most modern vending machines have been extensively tested and designed to inhibit theft. Many of these machines are designed essentially as large safes. Every year, a few people are killed when machines topple over on them, either while trying to steal from them, or venting frustration on them, especially when a malfunction causes the machine to fail to dispense the purchased item or the proper change (leading to the humorous saying, "change is inevitable, except from a vending machine"). An article in the Journal of the American Medical Association (11 November 1988, p. 2697) documents 15 cases in which men trying to get a can out of the machine were crushed. Three died, the other 12 required hospitalization for injuries such as fractures of the skull, toe, ankle, tibia, femur, and pelvis; intracerebral bleeding; knee contusion; and one punctured bladder. The article states that because the soft drinks are located in the upper half of the machine (so that they can fall into the dispensing slot), the center of gravity of the machine is abnormally high, and the machine will fall after it has been tipped only 20 degrees, a deceptively small angle. A large, fully loaded soft drink machine can weigh over 400 kg (880 lbs.)

There is, also, the problem of using a coin of a foreign currency which has the same size and shape as the coin accepted by the machine to get cheaper merchandise and some times change that might have more value than the originally inserted foreign coin. One remarkable example was the use of Libyan coins of 100 Dirhams and 50 Dirhams denominations in Maltese vending machines in the late 1990s. The 100 Dirham coin was used in place of the 1 Maltese Lira coin which had, back then, a de facto black market value of approximately 10 Libyan Dinars and thus having a staggering value 100 times higher than that of the fraudulent coin. Similarly, the 50 Dirhams coin was used in place of the 25 Maltese Cent which meant 50 folds increase of value according to the black market price. However, the machines were quickly replaced with new ones that could detect the difference between the Libyan and the Maltese coins, especially in touristic areas. Most notably, the 2 euro coin is similar in size to the 10 baht coin (worth only €0.25). Thus, many vending machines in the eurozone will not accept €2 coins, such is the extent of the 10-baht scam.

Malfunctions

The actual causes of vending machine malfunction are usually many-fold. Coin acceptors often jam up, especially if a bill or other foreign object is inserted into the coin slot. If the coin box is not cleared often enough, coins can fill up past the coin detector, preventing further purchases. Certain vending machines use a spiral kind of mechanism to separate and to hold the products, such as plastic bags of potato chips. When the machine vends, the spiral turns, thus pushing the product forward and falling down to be vended. If the products and the spiral are misaligned, the spiral may turn but not fully release the product, leaving the spiral snagged on the product and having it hang there. This may cause repercussions to the alignment of the products behind it if someone knocks the hanging product down, as the spiral must move a fixed distance. To somewhat remedy this problem, some manufactures attach a small piece of plastic to the end of the spiral that extends forward assisting in pushing and clearing the product from the spiral.

Additional sources of failure can include machines not being supplied the proper power (in some cases because they are on the same overloaded circuit with other machines), damage due to vandalism, and insufficient maintenance or upkeep by the operator.

Bill validators are also a source of frustration for many customers, especially when they falsely reject a bill that happens to be crumpled, ripped, or dirty. U.S vendors, realizing they were losing sales because of validator malfunctions, formed the Coin Coalition to support the United States dollar coin. Their efforts to completely replace the dollar bill with the Sacagawea dollar have been unsuccessful so far. Also some machines may not accept quarters and other coins on the first pass through the coin slot, causing the customer to have to collect the coins from the change return and reinsert them.

Most vending machines have a phone number that users can call to report malfunctions or request assistance.

Innovations

Vending has gone through significant changes over the decades. Many machines are still evolving to take credit cards and monitor machines from afar.

John Greenwick of the Greenway company is a former Mars Electronics employee and former product manager of the first ever Bill Acceptor. According to him, the industry saw a need for the ability to standardize the acceptance of coins and currency on a Global Basis. As such, a standard known as MDB (Multi-Drop Bus) was invented. This allows for machines around the world to utilize the same Bill Acceptor and Coin Changer devices with an International Specification. Thus, legacy machines may require conversion kits in order to avoid extinction.

Doug M. Sanford of Vending Times notes that "many vendors today do not remember the urgency with which industry leaders called on their peers to install coin mechanisms that held the patron's money in escrow until the vend was made; to post a telephone number that a customer could call to report a failure and request a refund; to make sure their drivers were cleaning the machines adequately and replacing burnt-out lamps; and so on and on". More recent innovations include improved coin and bill validation and the rapid adoption of sense-and-feedback systems to verify that the vend was made.

One of the newest vending innovations is telemetry. According to Michael Kasavana, National Automatic Merchandising Association Endowed Professor at The School for Hospitality Business, Michigan State University, the advent of reliable, affordable wireless technology has made telemetry practical and provided the medium through which cashless payments can be authenticated. This is important because research shows that 50% of consumers will not make a purchase from a vending machine if its "use exact change only" light is on. Machines equipped with telemetry can transmit sales and inventory data to a route truck in the parking lot so that the driver knows exactly what products to bring in for restocking. Or the data can be transmitted to a remote headquarters for use in scheduling a route stop, detecting component failure or verifying collection information. Telemetry could be one of the most significant developments in vending technology since the invention of the bill changer.

With consumers wanting quick and convenient access to competitively priced products, the vending industry has seen a great deal of growth over the last ten years. Vending offers new entrepreneurs a way to start businesses which can grow quickly. Snack, beverage, candy and food vending machines continue to be the most lucrative and stable in the market place. New innovations in service vending machines include internet kiosks and DVD vending. Cashless vending now allows consumers to use debit cards for added convenience. Vending is a multi-billion dollar industry, and growing.

In order to prevent injuries or death from tipping or striking the machine, most modern snack vending machines equipped with spirals to hold products contain lasers near the access door at the bottom. If a purchased item does not break the laser beam when falling, the spirals will automatically turn, usually three times to ensure that a product will fall. If this still does not occur, the customer will be asked to make another selection or will be refunded their money.

Gallery of varieties

See also

References

  • Krug, Bryon: Vending Business-in-a-Box, BooksOnStuff, 2003.

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