CoinStar is a Rip-Off
If you shop at a grocery store or places like Walmart, you’ve likely seen the name Coinstar. These big, green, coin-counting machines promise to turn your water-bottle-full-of-pennies into cold, hard cash–all without the hassle of paper rolls and endless counting. But is the convenience worthwhile, when you take the added expense into account?
Why Use CoinStar?
I distinctly recall helping my parents count out their giant blue water jug full of coins as a child. We had been saving for years and were finally going to use that money on something fun. But first, we needed to count it all out and cash it in at the bank.
My dad brought home a bag full of paper coin wrappers, and we kids set to work. Pennies in stacks of ten, teetering piles of dimes… it was tedious work. But when we were done, my dad loaded the wrapped coins into a box, ran up to the bank, and came back with crisp $20 bills that we then used for a night out at Malibu Grand Prix.
While I have zero interest in hand-rolling hundreds of coins today, the cost involved with using a CoinStar machine has been enough to deter me thus far. After all, do I really want to give up a significant chunk of my money just to have an automated machine count it out? Considering that CoinStar’s fee has crept up over the years–from 9.8% to a shocking 11.9% today–it’s not an insignificant expense.
Why I’m Hesitant
For a whopping 12% of your money, you can bring your coins, have them counted, and receive a voucher to retrieve cash from a cashier or just help pay for your groceries. For most people, this is too high of a fee to warrant the exchange.
If a typical shopper brings in a jar of coins, the total might be $50. They’ll lose $6 in the exchange. A large jar might contain $100. Would you really pay a machine $12 to count your coins–something you could do yourself for free?
Many of these coin-sorting machines are prone to error, too. While you may luck out and get a machine that counts every penny you dump in, you could also get short-changed. And for some people, this could mean as much as 18% of their money goes missing! Add a fee on top of this and it’s just a losing proposition.
Saving Some Change
Luckily, CoinStar has gotten a bit better over the years, offering customers additional options for their converted change and even easing the fee. Depending on what you plan to do with that jug’o’change, these options could make the machines a much more reasonable choice for you.
CoinStar is now partnering with retailers such as Amazon.com and Starbucks. Customers will be able to forgo the 12% fee in exchange for receiving their cash value in gift cards. These partnering retailers agree to pay the fee on behalf of the customers.
If you planned to use the cash to put toward your student loan payment or other bills, a gift card won’t do you much good. However, if you regularly shop with any number of retailers, this is an excellent way to add some flexibility to your budget and also save yourself 12% in fees at the same time.
There are a few ways that you can convert your coin collection into cash for free. It’ll just take a bit of extra work.
Your first option is to do what my dad did: get the whole family involved and start rolling coins! It may take some time, but it’s also a fun bonding experience, especially if the money-saving effort involved everyone. Most banks will even give you free paper coin wrappers if you ask. Once your coins are rolled, take them to your local bank. They’ll exchange them for cash for you, without charge.
Some banks even offer coin-counting machines for their customers to use. They may charge a small fee or the machines may be free. I’ve also seen where the machines are free to use if you have a modest number of coins (maybe a couple hundred dollars), but they’ll charge those who come in with an excessive quantity. Even if your bank charges a fee for the machine, though, it’s probably less than the 12% being charged by CoinStar.
Is CoinStar Worth It?
There is a time and a place for everything. Using a CoinStar machine to count and convert your saved coins is no different, and there are times when it isn’t such a terrible option.
If you have a lot of coins saved up and can’t (or simply won’t) spend the time counting and rolling them, a machine might be the way to go. This is especially true if you don’t have a local bank or want the convenience of cashing in at the same place you shop for groceries.
If you spend money regularly at any number of retailers–including Amazon–CoinStar might be a great choice for you. After all, you can opt for a gift card in lieu of cash, and avoid the high conversion fee for doing so. In this case, go ahead and bring those pennies with you the next time you head to the store!
CoinStar gets a bad rap for being a pricey machine to use, but let’s be real: 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.
However, what I propose is considering the less expensive options first, whether measured by time or money, in order to get the same results. If you’ve already looked into the options and have decided an 11.9% fee makes sense for you, then CoinStar is ready and waiting at any one of their 20,000 locations nationwide.