Dining Dollars help determine business success
Since 1996, businesses in Tuscaloosa have been partnered with Bama Dining and the Action Card Office to allow students to use their ACT cards as a form of payment. However, the partnership has proved beneficial for some businesses and harmful for others.
Rhett Madden, the former owner of Crimson Café on the Strip, said accepting Dining Dollars severely hurt his local business.
“I took Dining Dollars for over 13 years and had to reposition the business into a nighttime business because we could not make a fair-trade profit accepting them,” Madden said. “With Dining Dollars, we had to pay a 21 percent commission off every single Dining Dollar we accepted. We tried for a semester without Dining Dollars to see if we could make it work without them, but we couldn’t get enough non-Dining Dollars business because of the $30 million per-year daytime student food business monopoly it creates.”
Madden said his business could not keep up with the competition from on-campus food vendors because so many students eat on campus. He said other schools that do not have required meal plans for freshmen, the University of Georgia in particular, have many more off-campus coffee shops that are thriving.
“I finally just ended up selling the business, getting a job and starting over after being self-employed for over 18 years,” Madden said. “It was a case of being at the wrong place at the wrong time, and I am very glad it is all behind me now.”
One restaurant, just down the street from the former Crimson Café, has seen success with Dining Dollars and Bama Cash. Erin Childress, the general manager of Buffalo Phil’s, said between 85 and 90 percent of her business during spring and fall comes from students using Dining Dollars or Bama Cash.
“We have a great relationship with the Action Card Office and the people there,” Childress said. “I think that it definitely benefits us with the amount of business that we do with Dining Dollars; we’re actually coming out better off than we would if we didn’t take Dining Dollars. We don’t really have any negative experiences at all because we follow procedure like the University tells us to.”
Childress said Buffalo Phil’s has not been hurt by competition from on-campus dining locations; in fact, January was its busiest month by far.
“I think people come here for the atmosphere, instead of going to the Ferg and getting their food and sitting down at a table and eating it by themselves, they come in here and they actually have an experience,” she said.
(See also "UA refunds twelve percent of Dining Dollars per year")
Childress said the only negative effect of accepting Dining Dollars and Bama Cash is that it puts a damper on their bar business, because students cannot buy alcohol with ACT cards.
“We’re trying to build our bar business and our late-night business, and I think that people come in here with that card, they think it’s a place where they start, and then they go out and go to bars,” she said. “So it’s good and bad for us, and we’re working as hard as we can to make sure that we’re trying to retain that late-night bar business.”
Childress said it is the owner’s policy not to discuss the percentage commission they pay the University, but Kristina Hopton-Jones, director of University Dining Service, said 7.5 percent of earnings from Dining Dollars come back to the University. Jeanine Brooks, director of the Action Card Office, said the percentage is generally 3.5 for Bama Cash.
“The vendor actually submits a proposal, so there are a few paying more,” Brooks said. “We do charge an annual reader maintenance fee of $500.”
Vendors are paid weekly for sales minus commission on Dining Dollars and twice a month for Bama Cash. While Dining Dollars is only accepted at Buffalo Phil’s and Domino’s Pizza, Bama Cash is accepted by many businesses around Tuscaloosa. Some of the biggest off-campus partners are restaurants like Buffalo Phil’s, Moe’s and Domino’s, but Bama Cash is also accepted at Cleansing Tide Laundromats, Publix, CVS, OZ Music and some gas stations near campus.
“We strive for businesses who provide services students would benefit from rather than targeting on volume,” Brooks said. “Small, local vendors are part of our community and welcomed to the program as much as the large chain operations. That said, grocery stores, gas stations and restaurants located in areas heavily frequented by students, like the Strip, do well.”
While many student use Dining Dollars and Bama Cash at vending machines and restaurants on campus, they may not have a big impact on their meal choices off-campus. Haley Brantley, a freshman majoring in biology, said that while she uses Dining Dollars at least every other day on campus, she rarely uses them off campus.
“I mainly use Dining Dollars; I don’t use Bama Cash ever,” Brantley said. “I have [used them at restaurants], but whenever I’m thinking about going out to eat, I’m not thinking about using Dining Dollars.”