Article

Refurbished kiosks gain traction in challenging economy

Long popular in the ATM world, refurbished units give new and low-budget deployers another option.

October 20, 2009

Regardless of its size, a kiosk rollout can be a serious expense, and return on investment can be difficult to predict. But some deployers are beginning to discover a less expensive option in the midst of challenging economic conditions: refurbished kiosks.

While refurbished kiosks represent only a small part of today's self-service market, refurbished ATMs have been popular for some time.

Mississippi-based Triton Systems recently opened its ATMGurus business, which specializes in providing ATM parts and repair, as well as refurbished units.

"The whole idea is, in today's economy, if you can buy that product, it's like buying a car or anything else, you make that economical decision," said Dan Swain, general manger of ATMGurus.  

Swain's colleague, James Phillips, says that for a time refurbished ATMs were scarce in the marketplace because the technology was so new and popular, mirroring the lack of refurbished kiosks deployed right now.

"Triton has offered (refurbished) units for many, many years. It's not something that really was at the forefront of our business, though," Phillips said. "When we first got into that business in the early 90s, it was a very explosive market. Used ATMs really weren't necessary — the marketplace was exploding so much, everybody was purchasing new machines and so forth."

But, Phillips says, once the ATM became ever-present, many operators began discovering the benefits of refurbished units.

"As the market has grown, the ATM has become more ubiquitous across all niches and marketplaces, and you've seen transaction volumes at the ATM drop," he said. "So as the transaction volumes have dropped off considerably in the last decade or so, you've seen the need for lower-priced equipment become more and more important, especially for the ISOs out there who live off surcharge income and so forth. So to maximize their profits and keep their cost of ownership as low as possible, used or refurbished ATMs have become much more prevalent."

Refurbished kiosk deployments growing

Though they may not be as popular as new units, Sandy Nix, president and CEO of Mequon, Wis.-based D2 Sales and Service, says she's seen the number of requests for refurbished units increase in the last 12 to 18 months.

"Definitely. Everyone is much, much more careful with how they're spending the precious budgets that they have," Nix said. "And so we're finding a lot more folks are at least considering it as an option."

Nix says refurbished models account for as much as 10 percent to 15 percent of D2's business. The units typically are pre-owned kiosks that have been returned at the end of another client's lease term. If the unit is in good condition overall, D2 then cleans it, runs diagnostics on the equipment and assesses what needs to be restored or removed. 

"Anything that isn't top-notch gets either repaired or replaced," she said, "so they're in what we refer to as 'like-new' condition."

D2 also offers the same warranty, services and support on refurbished units as it does on new models. Nix says the cost of a refurbished model can be anywhere from half that of a new one to 35-percent less and that prices are determined based on the kiosk's age and condition, the type of equipment in the kiosk and the price of comparable new equipment.

"We have very close to the same level of uptime (on the refurbished units), and we offer the warranties at virtually the same price as on a new unit, because we have that much confidence in the product we're putting out," Nix said.

Though a brand-new, shiny kiosk may seem like the better choice, Nix says refurbished kiosks can be a good fit for a business that just wants to do a trial deployment or simply needs a more economical option.

"They tend to be folks who are either looking to test a concept or, for some similar reason, want something that is a very economical alternative," she said.