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TWST: Can we start out with a quick overview of Coinstar?
Ms. Renihan: Coinstar was founded in 1991 by Jens Molbak, who came up
with the idea while working on a research project as a graduate student
at Stanford University. Jens had been lugging his own heavy jar full of
coins across the country and felt there should be an easier and more
convenient way to deal with coins than sitting on your living room
floor, rolling them and taking them to a bank. As part of his research,
Jens stood outside grocery stores and asked people if they accumulated
loose change and if so would they be willing to pay a convenience fee to
have the coins converted into spendable cash. Through this interview
process, he identified a need that ultimately led to the formation of
Coinstar. We installed our first machine near the end of 1992 and today,
after 10 years in business, have nearly 10,000 machines in the United
States, Canada and the United Kingdom. TWST: What is the machine? How does it work and where do you put it?
Ms. Renihan: Coinstar is a nationwide network of self-service coin
counting machines, which are typically located in high traffic
supermarkets and can usually be found near the front entrance of the
store. The machines are very user friendly. You just dump your coins
into the hopper, and then watch the on-screen display to see how many
pennies, nickels, dimes, quarters, half dollars and dollar coins are
being counted. Coinstar counts 600 coins per minute, so it's very fast.
Once it's done counting, the machine prints a voucher for the
transaction, less an 8.9% convenience fee. You then take that voucher to
the cashier and you can either redeem it for cash or use it toward your
grocery purchase. We find that about 40% of consumers do use some of
their voucher on grocery store purchases.
Tickers included in this excerpt: CSTR
For more information call (212) 952 7400. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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