Vending Machine Operators Feel Bite : Canadian Coins Take a Plug Out of Maine’s Profits

Canadian tourists who keep cash registers jingling in this resort town also have vending machine operators singing the blues as lower-valued coins pile up.

“Starting shortly, through the end of the season, probably 8% or 9% of the coins are Canadian,” said Paul Dunn, vice president and operations manager at Donovan & Donovan Inc., a vending company in nearby Saco.

The nickels, dimes and quarters are the same size as their U.S. counterparts, and at current exchange rates--$1.19 Canadian per $1 U.S.--they can take a slow, steady bite out of profits.

Expensive Process

“We have a pretty hefty discount when it goes to the bank,” Dunn said. “Coins we get discounted 50%. The way it’s explained to us is it’s an expensive process, handling them and shipping them back.”

Dunn said his company plans to install electronic devices to make machines refuse the Canadian coins, but that can create new problems.

“Of course, that makes irate customers,” Dunn said. “A few years ago, it (the exchange rate) was 3%, and we put in coin acceptors.”

In northern Maine, Hedrich Vending Inc. of Presque Isle winds up with so many Canadian coins that trying to keep them away would not be worth the effort, said Joe Hedrich Jr. Fixing the machines to reject the Canadian coins would lead to too many jammed machines.

‘Eat the Discount’

“We’d have service calls galore,” Hedrich said. “We eat the discount.”

Up north, the discount is not as bad, with banks subtracting the actual exchange rate of about 20% in recent days, he said.

But in southern Maine, banks are not fond of handling Canadian coins.

“For a customer of Maine National Bank, we will discount it 50%, but for a non-customer, we will not do it at all,” said Jim Parisi, head teller at Maine National in downtown Portland.

Taken at Face Value

In Old Orchard Beach, a seaside town 20 miles south of Portland, the tourism economy gets such a lift from Canadians that officials have decided to take the foreign coins at face value when they turn up in municipal parking lots and pay toilets.

“As a courtesy we don’t discount them,” Town Manager Jerry Plante said. “What limited number we get we process through the bank, and we get discounted 40%.”

Vending companies that need to sift the Canadian change out of the U.S. coins have found that they can do so by running all the coins under special magnets, which fish the Canadian coins out, Hedrich said.

The Canadian coins also wind up in parking meters. Some Maine residents have found the meters to be a good place to get rid of Canadian coins that turn up in their pocket change.

In Portland, parking meter supervisor Robert Henderson said the problem may be aggravated by businesses that buy the cheap coins and hand them out to let customers plug meters with them. Henderson said he cannot prove that the coins are being systematically used and he would not identify any suspect businesses, but he has received reports of the practice for several years.