Prepayment idea from an Indian band

[Frank Cox]

A chap from one of the local Indian bands phoned me this morning with an idea that's never come up before.

He asked if it would be possible for the band to pay me a few thousand dollars in advance, and then when someone from their band comes to the theatre they can just show their treaty card to verify that they're from that band and then I can just deduct whatever they would pay from the amount I'm holding "on account" here, and let him know when it runs out so he can bring another cheque.

They would rather do that than buy a bunch of my gift cards to hand out since people tend to lose their gift card; this way the whole thing is run from here and all they need is their treaty card.

I told him that I can do that and he says he'll bring a cheque sometime this week.

Thinking about it after the phone call, it occurs to me that I'll have to ask him if he wants to put any kind of a per-person limit on their concession purchases.

[Marcel Birgelen]

So, essentially, you're going to open a tab for them. Something like this isn't really anything special in hospitality in general. Most hotels allow you to have a "tab" on your name or on your "group". It's not that usual to have a pre-payment, but many ask for some kind of security like a credit card. For cinemas, though, it's not really something I've heard about. Still, it's a bad business decision in general to say no to any form of upfront money...

What you might want to check is the local accounting rules for such a construction, especially how to handle stuff like sales tax with those kind of constructions, when it's payable, etc. Also, how are you going to administer this? Do you have POS software that can handle this? Also, if you have staff, you'll need to make sure they can handle the situation.

[Ryan Gallagher]

I mean running family/estate tabs was kinda the norm in the early days of retail. General Stores and the like. If you can make your POS system bend to that will go for it.

I could see it also being useful if you had mentally challenged family that loved movies, and you just wanted to make sure they always could get in without the hassle of money management.

Edit: from an accounting perspective, it is probably easier to establish trust and offer them a "line of credit", rather than be liable for money you are "holding" for them in an account. Not sure which would be easier in modern systems.

[Frank Cox]

I'm low-tech. My "system" is a couple of cash drawers.

And there's no staff.

So I figure I can just write down whatever is used each night and update a spreadsheet with the running balance after the show. I'll just transfer the needed amount from that to my nightly total and as far as I can see there shouldn't be anything more to it than that.

[Marcel Birgelen]

I get the old-school system, I guess you still don't accept cards or other forms of electronic payment?

Still, I'd make sure not having all that cash lying around... Cinemas are pretty soft targets, often open late...

[Frank Cox]

Cash only here. I would have to raise my admission prices by at least a dollar (and maybe more) to cover the costs involved in accepting cards (transaction fees, machine rental) and then I'd have the hassle of actually accepting the cards, dealing with the bank and so on.

Now people just walk in and put their $20 bill on the counter and I hand them their change.

And I like it that way.

[Marcel Birgelen]

If you handle the cash going in and out yourself, I guess cash is still the cheapest option. I guess as a small-town shop it's probably too expensive to have it collected every night by a security company.

Still, have you never worried about the potential exposure when dealing with larger amounts of cash? I know that even some gas stations around here are pretty nervous those days, not just because their cash exposure, but because they're also after cigarets nowadays. Some have already replaced their cash registers with automatic cash handling machines. Many of those machines are, unfortunately, pretty buggy.

[Mike Blakesley]

I've worried about cash and being robbed, since our office window is just off the street. But, these days around 70% of our sales are via cards, so we don't have near as much cash around as we used to. We have one or two older customers who still like to write checks but that's definitely on the decline.

I hate the card fees. That's a major expense. But I look at it as a customer service, plus it's a necessity for people to buy tickets online. And we get enough out-of-town customers to make that a vital option. Some people drive 60 or 70 miles to come here. I don't want people to drive all the way to town and find that we're sold out.

Some stores around town are now starting to pass the card fees on to the customer -- if that ever gets to be the majority I'll happily jump on that bandwagon. Currently we charge a dollar a ticket as a convenience fee which covers part of the cost, but not all of it.

[Frank Cox]

Still, have you never worried about the potential exposure when dealing with larger amounts of cash?

Frankly, it's not something that I've ever been particularly concerned about.

Soon after the show starts and everyone is in the auditorium I put the cash (other than my float) somewhere else in the building so if someone did decide to walk in and take what's in my cash drawer (which has never happened) all they would get is the float, and that's less than $100. And before then there's either a bunch of people around or if it's a slow night there's nobody around and nothing much in the till anyway.

And it's a small theatre -- I'm not (usually) dealing with thousands of dollars anyway.

It's never been a problem.

[Lyle Romer]

I've worried about cash and being robbed, since our office window is just off the street. But, these days around 70% of our sales are via cards, so we don't have near as much cash around as we used to. We have one or two older customers who still like to write checks but that's definitely on the decline.

I hate the card fees. That's a major expense. But I look at it as a customer service, plus it's a necessity for people to buy tickets online. And we get enough out-of-town customers to make that a vital option. Some people drive 60 or 70 miles to come here. I don't want people to drive all the way to town and find that we're sold out.

Some stores around town are now starting to pass the card fees on to the customer -- if that ever gets to be the majority I'll happily jump on that bandwagon. Currently we charge a dollar a ticket as a convenience fee which covers part of the cost, but not all of it.

A lot of mom and pop restaurants and other businesses around here either charge a credit card fee or offer a cash discount. I'm surprised it isn't the majority in your small town market since it is probably almost all small businesses there.

People writing checks is something I don't understand and maybe never will. My first job as a 14 year old in a retail store was in the era where credit cards required calling for authorization and you took the imprint of the card on carbon paper. People back then (late 80s) would write checks somewhat frequently. When I worked for GCC in the early 90s we accepted checks (but not credit cards). In my own life, as soon as electronic payments became available my goal became to write as few checks as possible. They are a pain to write and then it drives me crazy when I'm trying to figure out the available funds in my checking account and somebody hasn't cashed a check I wrote weeks before.

[Tj Hopland]

Robberies used to kinda go in cycles back in the 1900's. Someone would get the idea to rob something like a theater and it would make the news which was basically a how to instructional video so that seemed to inspire others to try it. Those interested would try it then it would quiet down for a while then start up again. I remember one location they were trying to interview the manager and he was begging them to not run the story. He was trying to get them to bite on some other story like fake butter or or how they catch people sneaking in.

I know there are towns and areas that do still run on cash and if you are sure that is your area I guess it can still work but I have been in towns where the theater owner tells me no one else takes cards either and I point out that where I ate lunch did, gas station did, and the hardware store did. Places that resist when they do finally make the change often say sales went up because it seems the average person doesn't really consider a card to be real money so they don't really think that hard about how much they are spending. If your whole life doesn't run on cash getting cash is its own project that takes time and effort and thinking so maybe they only got $20 and the see that other candy or combo pack that really looks good if they don't have the cash or have to plan ahead they may decide against the extra stuff or maybe even the visit all together.

[Frank Cox]

I always thought that if you're going to rob a place, the place to rob would be one of the bigger grocery stores. They have (or at least used to have) lots of cash and they don't have the security guards and camera and alarms that you find in places like banks. In today's world that's probably all changed now, though.

Being the "last light left on downtown" at night has never really concerned me other than that occasion a couple of years ago when two serial killers were on the run around here. (Actually it turned out to be just one serial killer - he had killed the other guy too.) I just didn't open the theatre at all that night.

I probably made someone's eyes bug out at Comscore when I put "closed due to serial killers" on my box office report for that night.

I get the odd drunk coming in for who-knows-what reason, and sometimes people walking by come in to warm up for a few minutes in the winter but that's about it. I get to deal with the odd "situation" - a little girl ran in here in her nightgown one night several years ago and said, "Mommy's boyfriend is beating her up and she told me to come here and tell you" - but overall it's generally pretty peaceful here while the show is on. I just sit here and read a book or write a story.

As for people buying more stuff with a card, that may be true but I'm not convinced that the extra sales would generate enough profit to offset the cost involved in taking the cards. My volume here just isn't that big.

[Marcel Birgelen]

I always thought that if you're going to rob a place, the place to rob would be one of the bigger grocery stores. They have (or at least used to have) lots of cash and they don't have the security guards and camera and alarms that you find in places like banks. In today's world that's probably all changed now, though.

Many grocery stores have been hardened, they're blanketed in security cameras and they often just keep minimal cash in the tills. Some have even put their tobacco products into hardened, automatic dispensers. A grocery store also is often quite busy and has complex layouts, often with multiple cashiers. I'm not really an expert in this field, but I guess it will be far easier to rob the local convenience store than the local Walmart.

Banks over here, fixed their exposure the easy way, by simply not having any physical offices anymore and if they still have an office, those offices are cash-less. If you need cash, they'll point you to the ATM and even that's no longer guaranteed to be there...

This has lead to an interesting shift, where ATMs are often attacked, with brute force... like real explosives or even by driving some big vehicle into the building where the ATM is located, often leading to extreme damages to the buildings around the ATM.

As for cash, I find myself between two interesting cultural extremes. On one hand, where I live, everything is cashless, some places, even though they might be legally required to do so, simply don't accept any cash anymore. Then, if I find myself just a few kilometers to the east, the mentality is completely different. While big stores usually accept electronic payments, many smaller shops and restaurants do not. Buying a car with pure cash over here is probably illegal, while just over the border, showing up with a big wad of cash to buy a car is still completely the norm...

[Frank Cox]

For anyone who's interested in how this scheme ended up working, I got a cheque from the band "on account". I keep a notebook at my till and when someone comes in from that band they show me their treaty card. Then they get "free" admission plus ten dollars credit toward a concession purchase. I just write the amount of admission/concession credit in my notebook and subtract it from the amount on account.

It's ten dollars concession credit per treaty card holder, and every treaty card holder can bring four friends or family members with him as well, for a total of five admissions. The additional people get the free admission but not the concession credit unless they have a treaty card of their own.

It sounds complicated when I write it out like that, but there's really not much to it other than writing the amounts down as they come in and adding that into the grand total at the end of the night.

When the remaining amount gets below about $500 or so he told me to call him and he'll drop off another cheque. We just started doing this so none of us have any idea how long it will take to get to that point, but it seems like a popular idea with the folks there. There's about 250 people who live on that reserve.

Murray told me that he had people asking him when they could start using it even before he had a chance to bring me that cheque.