ATM Cards to Let Carl’s Jr. Dish Up Fast Food, Funds

Carl’s Jr. customers will soon be able to order a burger, fries and a side order of cash.

Anaheim-based Carl Karcher Enterprises on Tuesday became the first major fast-food chain to approve the use of automated teller cards at all 423 company-owned Carl’s Jr.’s in California. (The chain’s 60 franchisees have the option of joining, but the 48 stores in Arizona, Nevada and Oregon are not included.)

As the electronic system is installed over the next year, customers will be able to use plastic money--namely, bank debit cards from four major California banks--to pay for their food purchases.

And patrons can trot off carrying more than just a bag of burgers. Carl’s Jr. will allow patrons to receive up to $40 cash back with their purchases.

By accepting automated teller machine, or ATM, cards, Carl’s Jr. is joining a growing list of retailers--including gas stations, supermarkets and convenience stores--allowing plastic money.

Just about every major competitor--including McDonald’s, Wendy’s, Arby’s, Jack in the Box and Burger King--has tested or researched the use of bank cards. But most of them have small pilot programs that either issue scrip redeemable for food or accept credit cards, which charge interest.

Carl’s Jr. is “way ahead of everyone” in developing use of bank cards, said Carolyn Levy, a restaurant analyst with Shearson Lehman Hutton.

But in the already bloated fast-food market, “everyone is desperate to increase customer counts--so there’s no question that the rest will leap in if it works for Carl’s,” Levy said.

Carl’s Jr. decided to adopt the ATM system after a two-year test at more than 120 Carl’s Jr. stores in San Diego and Northern California.

At those stores, customers pay 10 cents per transaction to pay for their Chicken Clubs and Famous Stars by sliding a bank card through a card reader.

A debit card allows payment to be electronically transferred from the customer’s bank account to Carl’s Jr.

So far, the ATM systems seem to have given card carriers a bigger appetite. Customers who use debit cards spend an average of 50% more at Carl’s Jr. than they did before, said Bob Altman, a company vice president. Overall sales are up at the test sites, too, but Carl’s declined to provide numbers.

Carl’s Jr. thinks that purchases made with ATM cards will account for up to 7% of the chain’s transactions within two years--and eventually more than 10% once drive-through customers can use plastic money (which the system currently doesn’t allow).

That’s for an investment of roughly $2,000 a restaurant to install the system--which Altman estimates will be paid back within the first 18 months of operation.

The program, which will be operated through Wells Fargo Bank’s Interlink system, accepts ATM cards from Wells Fargo, Bank of America, Security Pacific and First Interstate.

But starting next spring, the Wells Fargo system will expand to add the state’s major savings and loan associations and larger credit unions.