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TD Bank is attempting to put a recent media story behind it. It has removed all of its U.S.-based Penny Arcade coin sorting machines from its banks following a report on NBC’s flagship morning program the Today Show.
You’ve likely seen coin sorting machines at banks, in malls and at supermarkets. Instead of counting and tediously rolling the change to take to them bank, one simply dumps the load into the coin sorter in exchange for the equivalent amount in bills. For the convenience, the machines often charge a small percentage, somewhere between 3 and 8%.
NBC consumer affairs reporter Jeff Rossen recently conducted an experiment which highlighted a profound discrepancy with some machines. He and his team counted out piles of change totaling $300.00 each and dumped them into several bags. They then deposited the change in two different brands of coin sorters, Coinstar and Penny Arcade, repeating the experiment at several locations.
Each Coinstar machine passed the test, providing the correct amount each time. Penny Arcade fared worse; some machines were off by only 5 cents, others by a few dollars, but one machine short changed the reporter by a whopping $43.00.
Alerted to the discrepancy, a bank spokesperson struck the right tone, stating “We are disappointed with the experience that The Today Show had with our Penny Arcade coin counting machines." The bank is currently evaluating and re-testing the machines.
TD appears to be doing the right thing in taking action and seems to be striking the right tone in its media responses. But the bank’s initial explanation short changed viewers of the Today Show. It said a coin count could be compromised by bits of lint and dust dropped into the machines as the coins are deposited. Perhaps this may account for a difference of a few cents, but doesn’t explain how something with one millionth the weight of a coin could result in a loss of several dollars.
More troubling however is TD’s claim that the machines are checked twice a day, telling Today “they ‘place a premium’ on their integrity.” If true, TD needs to seriously re-consider its maintenance protocols, since surely the bank would have discovered repeated discrepancies.
But previously published reports paint a more troubling story. The New York Post, for instance, reports TD was alerted to this problem with its Penny Arcade machines at least twice in the past. The Post also says the bank refused to allow state regulators to test them, citing jurisdiction.
Interestingly, The Post concludes its article with a 2008 quote from the bank’s chief marketing officer who said “People collect loose change, so we offer them free (emphasis added) coin counting and piggy banks. That is what makes TD Commerce Bank a love brand.” He did not add, however, that the machines are free to customers. Non-customers must pay an 8 percent fee.
This story holds several lessons for businesses, the obvious one being “a love brand” would never treat customers with such contempt. Nor would it ignore repeated warnings that its operations were flawed.
More subtly, though, small and medium-sized businesses must remember: