HARRIS TEETER TESTS COIN SERVICE

JOEL ELSON

CHARLOTTE, N.C. -- Under a pilot kiosk program being tested at 20 Harris Teeter stores, customers can bring in loose change and receive vouchers that can be redeemed for paper cash or used to pay for groceries.

"The kiosk can help draw customers, the same as video rental, coffee bar, key cutting and UPS services," said Ruth Kinzey, corporate communications manager at Harris Teeter, which has placed the machines in stores located near colleges, restaurants and food-service operations. Kinzey declined to comment on the amount of additional revenue the chain is receiving from the machines, or the specific financial arrangements with the supplier.

Harris Teeter installed the kiosks, manufactured by Coinstar, Bellevue, Wash., this month as a six-month pilot, said Kinzey. At the end of the test period, the retailer will assess the program and decide whether it will be expanded. Coinstar also is in discussions to introduce the service at California chains Vons Cos., Arcadia, and Hughes Family Markets, Irwindale, said Jens Molbak, president of Coinstar.

The machine also dispenses free 25-cent to $1 manufacturer coupons for food and nonfood items, including Ban deodorant, Excedrin, New Freedom feminine pads and Keri lotion.

"It's a way to create more impulse purchases," Kinzey said. Operating similarly to an Automatic Teller Machine, the kiosk automatically sorts and counts loose coins and provides the customer with a voucher.

During the counting process, the kiosk deducts a 10% handling fee on pennies and 5% on silver coins, said Molbak.

Retailers are remunerated according to a sliding scale based on coin counter machine usage, the amount and number of vouchers exchanged and other factors. Molbak declined to elaborate, except to say the company does not pay rent to supermarkets for space.

"Seventy five percent of all Americans have a box or bank full of coins sitting at home, and we help put that money back to work," said Molbak. "The coin-counting kiosk is a traffic generator and a way to put additional spendable money in the hands of [supermarket] customers." The service is promoted in weekly circulars and through in-store displays featuring couponed items, Molbak said. The kiosks have been in use since 1993 by 100 West Coast supermarkets. They include Safeway's Northern California division, with five stores in San Francisco; Alpha Beta, Los Angeles, three stores, with additional locations planned; Raley's and its Bel Air units, Sacramento, Calif., 12 stores, and Quality Food Centers, Bellevue, Wash., 40 stores. In Seattle, kiosks also have been

placed at 10 area independents. This month, Quality Food Centers and its Olson's Food Stores in Mountlake Terrace, Wash., will tie the coin kiosks into a community fund-raising event for the Boys and Girls Clubs of Kings County.

Coinstar obtains profit from processing fees to the consumer and from manufacturers that pay to distribute coupons for their products from the unit, Molbak said. During the month of the fund-raiser, Coinstar will donate the processing fees generated at QFC and Olson's kiosks to the clubs. A special display also encourages customers to donate part of their coin savings to the organization.

The coupon dispension is a separate function of the machine. When customers press a button on the machine, sheets of six coupons that can be used toward food and nonfood items are dispensed. Along with health and beauty care items, coupons have featured Welch's grape jelly, Progresso soups, Milkbone dogbones, salad dressings, diapers, coffee, ice cream, snacks, pickles and other products. The coupons are changed monthly. In the future, Coinstar may expand the machine's services to feature product promotions on the kiosk screen while customers wait for cash to be dispensed.