The whole premise is almost absurd. It reminds me of children on a playground — one invariably tries to trick another by offering three quarters in exchange for a dollar bill. Even kids are smart enough not to fall for this trick. For some reason, however, people are content using CoinStar machines. For a whopping 9.8% fee, you can take your coins, have them counted, and receive a voucher to retrieve cash from a cashier or help pay for your groceries. If a typical shopper brings a jar of coins, the total might be $50. You’ll lose almost $5. A large jar might contain $100. Would you really pay someone $9.80 to count your coins — something you could do yourself for free?
Banking Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.
Many of these coin sorting machines are prone to error, too. I lucked out with TD Bank’s Penny Arcade recently, which rewarded me more than what I provided in coins, but for every winner there are likely more losers. Add a fee on top of this and it’s just a losing proposition.
Now CoinStar is partnering with retailers like Amazon.com and Starbucks. Customers will be able to forgo the fee in exchange for receiving their cash value in gift certificates. These partnering retailers agree to pay the fee on behalf of the customers.
You do not need to turn your coins into “real money,” or less liquid gift certificates. Coins are real money. You don’t have to use this machine before paying for your groceries. It may be annoying, but you could pay for your groceries with your coins rather than waiting to receive a receipt from CoinStar. If you really want to convert coins to paper money, any bank will gladly do it for you for free. In most cases, you don’t even need to have an account at the bank. If you have a good amount of coins, first go to the bank and ask for free coin wrappers. Almost any bank will provide paper wrappers to help you count and organize your pocket change. Once rolled, bring the coins to the bank and ask for an exchange.
It’s more work, but there’s no reason to waste money on a public coin counting machine when you can exchange coins for paper bills for free or even use the coins to pay for what you need. If your collection of change has grown too large for this to be reasonable, go to the bank more often.
Even at some of TD Bank locations, the Penny Arcade, the coin-counting machine at TD Bank that is geared towards kids but used by adults alike, now charges a fee for use by non-customers. Coins are money. There will always be someone who will be happy to exchange your coins for dollar bills without charging a fee.
I’m not taking this approach because I am superfrugal and hate the thought of paying any fees whatsoever. In fact, I am not superfrugal and am quite happy paying reasonable fees for services I need or want. Companies deserve to be able to offer a service and charge a fee for doing so. CoinStar’s business is successful in spite of its fee, which has crept up over the past few years. Obviously people — those who are aware they are paying a fee — are willing to pay it and find the service worthwhile. What I propose is considering the less expensive, whether measured by time or money, options for getting the same results. If you’ve already looked into the options and have decided a 9.8% fee makes sense for you, the by all means, make use of the service.