Coinstar, LLC (formerly Outerwall, Inc.) is an American company operating coin-cashing machines. On September 27, 2016,
Apollo Global Management, LLC acquired Outerwall, Inc. for $52.00 per share in cash. After the acquisition, former components of Outerwall,
Redbox
Redbox Automated Retail LLC (stylized as redbox.) is an American video rental company specializing in DVD, Blu-ray, 4K UHD rentals, and formerly video games via automated retail kiosks. Redbox kiosks feature the company's signature red color ...
, Coinstar, and ecoATM (which includes
Gazelle
A gazelle is one of many antelope species in the genus ''Gazella'' . This article also deals with the seven species included in two further genera, '' Eudorcas'' and '' Nanger'', which were formerly considered subgenera of ''Gazella''. A third ...
) became separate business entities.
Coinstar's focus is the conversion of loose
change
Change or Changing may refer to:
Alteration
* Impermanence, a difference in a state of affairs at different points in time
* Menopause, also referred to as "the change", the permanent cessation of the menstrual period
* Metamorphosis, or change, ...
into
paper currency
A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.
Banknotes were originally issued ...
,
donation
A donation is a gift for charity, humanitarian aid, or to benefit a cause. A donation may take various forms, including money, alms, services, or goods such as clothing, toys, food, or vehicles. A donation may satisfy medical needs such as ...
s, and
gift card
A gift card also known as gift certificate in North America, or gift voucher or gift token in the UK is a prepaid stored-value money card, usually issued by a retailer or bank, to be used as an alternative to cash for purchases within a parti ...
s via
coin counter
A currency-counting machine is a machine that counts money—either stacks of banknotes or loose collections of coins. Counters may be purely mechanical or use electronic components. The machines typically provide a total count of all money, or ...
kiosks which deduct a fee for conversion of coins to banknotes; it processes $2.7 billion worth of coins annually .
The company also operates Coinstar Exchange for gift cards. Coinstar's kiosks are in the front of
stores (between the
cash register
A cash register, sometimes called a till or automated money handling system, is a mechanical or electronic device for registering and calculating transactions at a point of sale. It is usually attached to a drawer for storing cash and other ...
s and the exit/entrance). The company has more than 60,000 kiosks offering a variety of services in the US,
UK,
Ireland
Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
,
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
,
Puerto Rico
Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and unincorporated ...
, and
Mexico
Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
. Coinstar also produces machines that provide prepaid
credit cards and e-payment
kiosks
Historically, a kiosk () was a small garden pavilion open on some or all sides common in Persia, the Indian subcontinent, and in the Ottoman Empire from the 13th century onward. Today, several examples of this type of kiosk still exist in an ...
.
On July 2, 2013, Coinstar changed its name to Outerwall and started trading on the NASDAQ as OUTR. It was later delisted from the NASDAQ on September 27, 2016, after it was acquired as a private company by
Apollo Global Management, who are its current onwer.
History
The company was founded in 1991 as Coinstar, Inc. and is headquartered in
Bellevue, Washington
Bellevue ( ) is a city in the Eastside region of King County, Washington, United States, located across Lake Washington from Seattle. It is the third-largest city in the Seattle metropolitan area and has variously been characterized as ...
.
Outerwall cooperated with the US Mint in the introduction of the
Golden Dollar
The Sacagawea dollar (also known as the "golden dollar") is a United States dollar coin introduced in 2000, although not minted for general circulation between 2002 to 2008 and again from 2012 onward because of its general unpopularity with th ...
at the beginning of the millennium and encouraged people to use coins rather than notes.
In February 2009, Coinstar purchased all remaining shares of DVD rental kiosk company
Redbox
Redbox Automated Retail LLC (stylized as redbox.) is an American video rental company specializing in DVD, Blu-ray, 4K UHD rentals, and formerly video games via automated retail kiosks. Redbox kiosks feature the company's signature red color ...
for $175 million from
McDonald's Corporation
McDonald's Corporation is an American multinational fast food chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger s ...
, making Outerwall the sole owner. Prior to this, Coinstar and McDonald's each owned 47% of Redbox shares, with various other parties owning the remaining 6%.
In September 2009, Outerwall sold its entertainment business, which included skill cranes and bulk vending, to National Entertainment Network.
Outerwall
On June 28, 2013, shareholders voted to change the company name from Coinstar to Outerwall.
On July 2, 2013, Outerwall acquired
mobile phone recycling kiosk operators ecoATM, for $350 million (not including debt).
On October 7, 2013, Barry Rosenstein's hedge fund JANA Partners filed a 13D on shares of Outerwall (OUTR) and disclosed a new 13.5% ownership stake in OUTR with 3,777,995 shares. The activist 13D filing indicated that JANA expected to talk with management—in particular, that they wanted to focus on "a review of strategic alternatives including exploring a strategic transaction, selling or discontinuing certain businesses, or pursuing a sale." Subsequently, on December 9, 2013, Outerwall's former CEO, J. Scott Di Valerio, announced it would discontinue three new ventures: Redbox's Rubi, Crisp Market, and Star Studio, and lay off 8.5% of its workforce.
Coinstar
In late September 2016, Outerwall announced CEO Erik E. Prusch would be leaving the company as part of the company's acquisition by
Apollo Global Management. Outerwall's subsidiaries, Redbox, and ecoATM, were separated into stand alone companies as was Coinstar.
Coinstar kiosks
The typical Coinstar coin-cashing kiosk is green (blue in the UK) and the size of a large
vending machine
A vending machine is an automated machine that provides items such as snacks, beverages, cigarettes, and lottery tickets to consumers after cash, a credit card, or other forms of payment are inserted into the machine or otherwise made. The ...
. They are located at
grocery store
A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, a ...
s, drug stores, larger merchants, banks or other retail locations. The coin-counting service is available in the US (including Puerto Rico), Canada, Ireland, and the UK.
To process coins, loose change is poured into the machine. In the United States, the machine accepts all denominations of coins from one-cent coins to one-dollar coins, its only restriction being
1943 steel cent
1943 steel cents are U.S. one-cent coins that were struck in steel due to wartime shortages of copper. The Philadelphia, Denver, and San Francisco mints each produced these 1943 Lincoln cents. The unique composition of the coin ( low-grade ste ...
s and
Eisenhower Dollar
The Eisenhower dollar was a one-dollar coin issued by the United States Mint from 1971 to 1978; it was the first coin of that denomination issued by the Mint since the Peace dollar series ended in 1935. The coin depicts President Dwight D. Eis ...
s. When the machine finishes counting coins, it issues a
scrip
A scrip (or ''chit'' in India) is any substitute for legal tender. It is often a form of credit. Scrips have been created and used for a variety of reasons, including exploitive payment of employees under truck systems; or for use in local co ...
, called a
voucher
A voucher is a bond of the redeemable transaction type which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers. The term voucher is also ...
, which the user can redeem at the place of business providing the coin-counting service at face value for currency. The same mode of operation and redemption is provided on those Coinstar machines situated in Great Britain, Ireland, Canada, and
Puerto Rico
Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and unincorporated ...
.
The coin-counting processing fee, deducted from the total once coins have been counted, is 12.5% in the US, 11.9% in Canada, 10.9% in Ireland, and 10.9% in the UK, unless the kiosk is located inside a bank branch, in which case this fee will not apply for account holders and the money can be directly deposited into an account by a teller. Some machines may offer a lower rate; in this case the store hosting the machine has subsidized the rate.
A newer service enables users to use their coins to buy a
gift card
A gift card also known as gift certificate in North America, or gift voucher or gift token in the UK is a prepaid stored-value money card, usually issued by a retailer or bank, to be used as an alternative to cash for purchases within a parti ...
from merchants without the usual fee ("no fee") — including such retailers as
Starbucks,
Amazon.com
Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential econo ...
,
Banana Republic
In political science, the term banana republic describes a politically unstable country with an economy dependent upon the export of natural resources. In 1904, the American author O. Henry coined the term to describe Honduras and neighboring c ...
,
Gap,
Regal Entertainment Group
Regal Cinemas (also Regal Entertainment Group) is an American movie theater chain headquartered in Knoxville, Tennessee. A division of Cineworld, Regal operates the second-largest theater circuit in the United States, with over 7,200 screens i ...
,
Old Navy
Old Navy is an American clothing and accessories retailing company owned by multinational corporation Gap Inc. It has corporate operations in the Mission Bay neighborhood of San Francisco, California. The largest of the Old Navy stores are its ...
,
iTunes,
J.C. Penney,
CVS Pharmacy
CVS Pharmacy, Inc. is an American retail corporation. A subsidiary of CVS Health, it is headquartered in Woonsocket, Rhode Island. It was also known as, and originally named, the Consumer Value Store and was founded in Lowell, Massachusetts, in ...
, and
Overstock.com
Overstock.com, Inc. is an American internet retailer selling primarily furniture headquartered in Midvale, Utah, near Salt Lake City. Businessman Patrick M. Byrne founded Overstock.com in 1999. The company initially sold exclusively surplus and ...
. Select grocery retailers, including
SuperValu and
Stop & Shop
The Stop & Shop Supermarket Company, known as Stop & Shop, is a regional chain of supermarkets located in the northeastern United States. From its beginnings in 1892 as a small grocery store, it has grown to include 406 stores chain-wide.
Sto ...
, are also participating in the "no fee" offers. If the user chooses the fee-free option, the machine issues a plastic gift card or, in the case of online merchants like
Amazon.com
Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential econo ...
, a voucher with a redemption code.
US and UK users also have the option of donating their change to a selected charity. By 2006, Outerwall has raised more than $20 million for charities including the American Red Cross Disaster Relief fund, Leukemia and Lymphoma Society, and UNICEF's Trick or Treat program.
Outerwall has processed more than 350 billion coins in its nearly two decades of operation, with an average transaction amount of about $38. The largest single transaction was $13,000 in
pennies
A penny is a coin ( pennies) or a unit of currency (pl. pence) in various countries. Borrowed from the Carolingian denarius (hence its former abbreviation d.), it is usually the smallest denomination within a currency system. Presently, it is t ...
from a man in
Alabama
(We dare defend our rights)
, anthem = "Alabama"
, image_map = Alabama in United States.svg
, seat = Montgomery
, LargestCity = Huntsville
, LargestCounty = Baldwin County
, LargestMetro = Greater Birmingham
, area_total_km2 = 135,765 ...
.
As of August 2021, more than 7,000 Coinstar kiosks in 46 states were equipped with
Coinme
Coinme is a cryptocurrency exchange headquartered in Seattle, Washington. The company offers technology for bitcoin ATMs and kiosks, which allow users to convert cryptocurrency into cash. The company launched one of the first licensed bitcoin AT ...
, enabling customers to convert cash to cryptocurrency.
Competition
In some sections of the UK., regional banks have begun offering free coin-counting services in the amount of a gift card. Refunds are often given in cash rather than in the form of a gift card. In some cases, it is not even necessary for the customer to have an account at the bank; the free service is offered as a way to attract new business from individuals who are not current account holders.
TD Bank
Toronto-Dominion Bank (french: links=no, Banque Toronto-Dominion), doing business as TD Bank Group (french: links=no, Groupe Banque TD), is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario. ...
's "Penny Arcade" coin counters were free and available to both customers and non-customers in many branches, but as of November 2010, the bank charges a 6% fee for non-customers to use the machine. In May 2016, in the wake of a New York state lawsuit over accuracy, TD Bank said that it had suspended use of its Penny Arcade machines and would be removing them from all of its locations.
Publicity
On May 9, 2006, Outerwall sued rival Coin X change over a patent dispute around the use of voucher-issuing machines, remote reporting of the coin machines' status and anti-counterfeiting technology for printed vouchers.
To generate publicity, Outerwall offered to cash in over 1.3 million pennies collected over four decades by
Flomaton,
Alabama
(We dare defend our rights)
, anthem = "Alabama"
, image_map = Alabama in United States.svg
, seat = Montgomery
, LargestCity = Huntsville
, LargestCounty = Baldwin County
, LargestMetro = Greater Birmingham
, area_total_km2 = 135,765 ...
resident Edmond Knowles after Knowles's bank refused to cash them in. The
armored truck
An armored vehicle (also known as an armored cash transport car, security van, or armored truck) is an armored van or truck used to transport valuables, such as large quantities of money or other valuables, especially for banks or retail c ...
sent by Outerwall to Knowles's home sank into the mud in his yard after being loaded with the 4.5-ton collection, and needed to be rescued by a
tow truck
A tow truck (also called a wrecker, a breakdown truck, recovery vehicle or a breakdown lorry) is a truck used to move disabled, improperly parked, impounded, or otherwise indisposed motor vehicles. This may involve recovering a vehicle damaged ...
.
On March 14, 2008, an employee was arrested for stealing $441,000 from Coinstar machines in Washington, Oregon, and California. The employee was accused of illegally accessing the Coinstar machines' cash boxes ahead of armored car pickups.
On March 25, 2008,
Roy Disney used his Shamrock Activist Value Fund of Burbank to ask for changes in Outerwall's corporate governance.
References
External links
* {{url, www.coinstar.com
StartupStudio rchivedIn depth interview with Jens Molbak covering the story of how Coinstar began, recommendations for entrepreneurs, childhood experiences that helped Jens succeed, etc. Copy of StartupStudio podcast a
AllBusiness
Companies based in Bellevue, Washington
American companies established in 1991
Vending
1991 establishments in Washington (state)
Apollo Global Management companies
2016 mergers and acquisitions
Private equity portfolio companies