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Coin-counting machines came into vogue in the 1990s when Commerce Bank started installing "Penny Arcades" in its branches throughout New Jersey. They were a huge hit for a while. Ex-Commerce CEO Vernon Hill used to credit the presence of coin counters for helping to drive deposit growth at his bank in the early 2000s. But banks have soured on the machines in recent years as usage declined and maintenance costs increased. Capital One pulled the plug on its machines in 2014 and two of its rivals, TD Bank and PNC Bank, followed suit this year. Here are some milestone moments in coin-counting history.
Commerce Bank in Cherry Hill, N.J., started installing its Penny Arcade coin-counting machines in all of its branches in the late 1990s as part of its quest to become "America's Most Convenient Bank." Under founder and CEO Vernon Hill, Commerce became famous for staying open seven days a week and offering free dog treats to customers' pooches. Most unique about the coin counters was that even noncustomers could walk into Commerce branches and use them free of charge. Hill credited that increased foot traffic with helping to drive deposit growth.
Commerce's rapid expansion up and down the East Coast led some banks to take a more Commerce-like approach to consumer banking. In preparation for Commerce's entry into the Washington, D.C., market in 2005, Chevy Chase Bank stationed ATMs in most Metro stations and installed coin counters also free for noncustomers in many of its branches. It was around this time that PNC Bank, which competed with Commerce in New Jersey and Pennsylvania, began rolling out coin-counters in its branches.
TD Bank's Promise
When it bought Commerce Bank in 2008, TD Bank said it would not only keep the Penny Arcade coin-counting machines in the Commerce branches, but also install new machines in its branches as well. It eventually had coin counters in more than 1,100 branches along the East Coast.
A Leap Across the Pond
On the outs with regulators here in the U.S., Vernon Hill replicated the Commerce model in Great Britain with the launch of London-based Metro Bank in 2010. Like Commerce, the bank offered extended hours, free pet treats and, you guessed it, free-for-all coin counters.
Not Over the Hill (2010)
No Longer a Free-for-All
Roughly two years after buying Commerce, TD Bank dropped its free-for-all policy and started charging noncustomers a 6% fee for using its coin counters. The bank's retail chief said at the time that it discontinued the service because it was distracting employees from helping and serving actual customers. The move may have also been an attempt to reduce wear and tear on the machines, which tended to malfunction when odd objects such as paper clips or lint would get mixed in with the coins. Around the same time, Capital One Bank which inherited coin counters when it bought Chevy Chase in 2009 also started charging noncustomers.
Capital One Pulls the Plub
In 2014, Capital One Bank started to remove the coin counters from the former Chevy Chase branches in the Washington area. "They're unreliable," a spokeswoman said. TD, though, remained steadfast in its support of the machines. Though overall usage had been declining as consumers payments' habits were changing, customers "find added value in the convenience" the coin counters offer, a TD official said at the time.
A Question of Accuracy
TD Bank said in April of this year that it was temporarily suspending its coin-counting service after undercover investigations from two news organizations found that the machines were miscounting coins and shortchanging customers. Consumers reacted quickly, filing a federal class action in New Jersey in which they claimed TD's machines "continuously undercounted coins for years and resulted in the loss of millions of dollars for consumers." Meanwhile, PNC Bank, which had already begun phasing out the machines due to waning demand, responded to the reports by quickly removing its remaining coin counters.
End of an Era
TD announced in mid-May that it is discontinuing its coin-counting service and will remove all Penny Arcade machines from its branches. Citing reports that the machines shortchanged users, Michael Rhodes, TD's head of consumer banking said, "We have determined that it is difficult to ensure a consistently great experience for our customers. In addition, the usage of our coin-counting machines has declined steadily over the past few years. For these reasons, we have decided to retire the fleet."
The coin-counting concept may have vanished from the physical world, but it lives on in digital form. Banks like PNC "gamify" the act of funding a savings account by letting users drop digital money into a virtual piggy bank.