Fast Food and Fast Money : Carl’s Jr. Outlets to Test Use of Debit Cards
It won’t be long before some of the customers at selected Carl’s Jr. restaurants will be able to order a burger, fries and a $20 bill.
In May, Carl Karcher Enterprises Inc. will start a six-month test program of offering fast payment with its fast food. The pilot program will make the Anaheim-based operator of Carl’s Jr. restaurants the first major chain that accepts plastic money, in the form of bank debit cards, from hungry diners, the company said Thursday.
The program is a joint effort of Karcher and Los Angeles-based Arco.
It was hailed Thursday by industry analysts as a further step toward bolstering Karcher’s sales, earnings and financial status.
Customers at participating locations will pay 10 cents per transaction to be able to order their Famous Stars and Chicken Clubs at drive-through stations or inside Carl’s Jr. restaurants and then pay for the meal with their bank debit cards. Instead of cash, the customer will slide a bank card through a card reader. A debit card, generally a participating bank’s automated teller machine card, enables payment to be electronically transferred from the customer’s bank account to Carl’s Jr. without money ever touching a human hand.
Along with their meals, customers will also be able to get up to $20 cash from the machines.
The project is part of the “PayPoint” retail debit-card program that Arco began testing three years ago. It now has more than 13 million holders of debit cards from 42 banks and thrifts, including California’s five largest banks, who will be able to use their cards at 35 Carl’s Jr. stores in the Sacramento and San Joaquin Valley areas during the test program.
If the program is successful, Karcher hopes to begin adding the debit card readers by Christmas throughout its 440-store system in California and Arizona, a Karcher spokesman said.
Both Arco and Karcher declined to discuss the program’s costs or projected returns.
Arco last spring made the program available to customers of more than 600 service stations, convenience stores and MP&G; Tune-Up Centers.
Its tie-in with Karcher came about after Arco moved to expand its system in September by offering more than 600 major retailers an opportunity to join the PayPoint network, the company said.
Other debit card programs have sprung up--notably those between Mobil Corp. and First Interstate Bancorp, and Lucky Stores Inc. and Interlink, a network of the state’s five major banks. But Arco’s 13-million-customer base makes its program the largest in California, an Arco spokesman said.
Karcher has been struggling with sluggish results for months. Two weeks ago, the chain announced that it was closing 27 restaurants in Texas and Arizona--a move that was widely viewed as necessary to improve Karcher’s sagging bottom line.
Industry observers were enthusiastic about Karcher’s trial run with debit cards.
“The convenience factor could boost average ticket sales,” said Jeff Holmes, an analyst with the Milwaukee Co.
