Why Coinstar is for Lazy People and a Huge Rip-off Overall

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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.

 

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

21 thoughts on “Why Coinstar is for Lazy People and a Huge Rip-off Overall”

  1. K.K. @ Living Debt F

    I find rolling my change to be somewhat therapeutic. I'll usually just sit watching a favourite tv show while I'm sorting and rolling away. There is no way I'd use a Coinstar or any other service to take money away from my savings jar…it takes forever just to fill it up!

  2. I agree that coinstar machines at the grocery store are a rip off. Here in the U.S. we pay an 8% fee, which is still no good. Although I think you can choose giftcards instead of cash, but I prefer the cash.
    My bank allows account holders to use the coinstar machine in the lobby for free. So I don't roll, but don't pay a fee either. And, our bank's machine spits out foreign currency. We have a lot of canadian money, I live about 1/2 hour from Windsor. So I know your pain.

    1. That's nice that they provide a machine to do it for you! Interesting to hear that you have a lot of Canadian money. I've always found it gets picked out and deemed unusable pretty quickly in the US. We basically use all US change as currency, now that they're about par in value!

  3. So agreed! Those machines ROB you! We've been rolling our own for a while and saved a ton of money. I'd argue that it's not worth it in the US, either. Besides, when we come across a Canadian coin it's actually worth more than ours, anyways. :p Send me all your leftover pennies!

  4. TimelessFinance

    Yup, such a waste. Some banks in Canada now (apparently) offer free coin rolling machines, although I haven't seen one myself.

      1. TD Canada trust banks have these coin counters almost throughout Canada and
        If ur td customer it's free

  5. Coinstar is a terrible rip off. We make rolling change a game with our five year old. She thinks it's the most fun thing ever, and we get a year's worth rolled up in about an hour.

  6. Sounds odd but I don't think many people realize they are paying for the service or don't really care if they are or not, they just want the cash. I see people using this machine at Metro and Food Basics all the time so someone is keeping them in business. Great post! Mr.CBB

    1. Anne - Unique Gifter

      If you have a BMO around! Yes, it\’s a pretty steep rate to pay for a simple and often free thing.

  7. For td users there is a small fee deducted as well according to their website

  8. I don't see a point to this silliness, myself. If you're saving them for the sake of saving money, then why not just deposit them in your savings account? If you need the money to spend, because you're low on money or something, then just spend them. Coins are valid money and can be used to pay for things! You don't need to convert "coins to cash." Coins ARE cash!

    1. Anne - Unique Gifter

      In order to deposit coins in Canada, they have to be rolled. It's not a step you can skip.

  9. Its not about being lazy, it's about priorities. Yes, I can sit by the TV and roll my own coins, but this does not appeal to me so I choose to pay Coinstar for the convenience of dropping them in a machine at the same time I am getting my groceries. I can afford it, I'm not in debt so I choose to pay for the service and save in other areas. I am an Event Planner who often works long hours and weekends so I wouldn't describe myself as lazy. Vanessa' use of name calling in her blog lacks maturity and professionalism.

  10. If you can roll all of your coins in one night you must not have many. When some people (like myself) go to coinstar, they need to throw a dolly and a couple 2x12s in the back of their truck. Perhaps a friend too to make the lifting easier. I save up 5 gallon jugs full of coins & am always so busy I've gotten up to 4 and a half jugs with my wife and kids after years of saving. I work anywhere from 40-60+ hours a week and don't choose to spend my holidays or rare day off rolling coins. Then again, I'm probably just "LAZY" right?

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