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The following is a guest post. I have a confession to make. I am addicted to Personal Finance blogs. I read a LOT of them. Vanessa’s is one of them. I’ve already posted about way more awesome things to do with coins than feed them to an expensive machine. They turn into awesome gifts! Are you interested in writing a guest post? Contact me!
Why Coinstar is for lazy people and a huge rip-off overall
You’ve perhaps heard of Coinstar by now – the coins-to-cash company has been operating since 1991 and have exploded since the recession.
The premise is simple. People bring bags of coins to the machine and receive a voucher that can be redeemed in store (the machines are usually in grocery stores). For this service, Coinstar takes a commission of 9.8% in the US, 11.9% in Canada and 8.9% in the UK. In America, you can bypass the fee by claiming a gift card or by putting the money on your GreenDot card (prepaid debit card). Oh and the voucher is only redeemable in the same store as the Coinstar machine and can expire.
Ok, so let’s focus on Canada since both Anne and myself are Canadian. In Canada, the only option that we have is to pay an outrageous 11.9% commission to have our coins turned into cash. I see three problems with this.
ONE. How lazy do you have to be to not roll your coins? Go to Dollarama, buy a bag of rollers and sit in front of the TV and roll coins one night. I do this about once a month and it doesn’t even take half an hour. Basically, you’re paying a machine to count to 40 or 50 for you. I think that you can count to 40 or 50 (depending on the coin denomination).
TWO. Canada has one and two dollar coins. If you dump a bunch of coins into the machine and your total is $153, you will receive $3 back in coins which defeats the purpose of coins-to-cash. And you’ll have paid 11.9% to get those $3.
THREE. Coinstar says “Coinstar’s patented technology allows our processors to filter out foreign coins and other debris. However, these items may not be returned by our processors so it is a good idea to remove such items”. Anyone who’s lived in Canada knows that at least 5% of our coins are American ( if you live in Québec, another 1% or so are Euro 2-cent coins) meaning that you need to spend time to sit and filter through your coins anyways.
While in America it may be worth it to use Coinstar to convert your coins to cash, in Canada you’re paying a high base fee as well as hidden fees in the way of getting back the same coins you put in and the potential loss of foreign coins. There are also alternatives to Coinstar that will save you money!
About me: My name is Vanessa and I write at the aptly named Vanessa’s Money. I am finishing up my BA in Economics at McGill and will be paying off my student loans in one lump sum on December 21st. I write about money and the foolish things that I see people do with money.
Image via: http://hydrodynamica.blogspot.ca/2009/01/sponsored-by-coinstar.html
PS: There was one of these at my university grocery store… the number of times my housemates forgot to cash in their chit was astounding! That’s like giving free money to Coinstar! – Anne