Validation: Enemy or Very Wealthy Friend?
December, 2008Sometimes the parking operator or the facility owner cuts special deals with merchants in the area so that the merchant pays for some or all of the cost of parking. As you know, we call these little deals validations.
When I do audits, I find that this is one area that is typically overlooked or sloughed over by the operations staff and the owners when they look at a monthly report. So letís take a moment and review the bidding Ö
The validation can take the form of a signature (bad); rubber stamp (bad); peel-off postage-type stamp (better); a peel-off postage-type stamp that is cut so it cannot be removed from the ticket intact (better still); a validation machine that places a numbered stamp on the ticket (even better still); an off-line validator that encodes the validation on the ticket for a machine-readable system (marginally better still); and the best Ė an online real-time validation system, where the validator in the merchantís store is connected to the revenue control system and the ticket is validated online.
I would guess that half of the validations done worldwide fall in the first two categories. The parker hands his ticket to the merchant, who either signs the ticket (most often done in office buildings) or stamps the ticket with a rubber stamp.
There are two problems with this.
First, you donít get your validation money up front. (Bad)
Second, there is a great possibility of fraud. Unless you have a handwriting expert working for you, there is no reason someone working in the booth canít simply scribble a name on the back of an unvalidated ticket and keep the money.
Signed validations should not be used under any circumstances, even by the CEO or the garage manager.
Rubber stamps are almost as bad. There is nothing keeping a cashier from going to Kinkoís and getting a duplicate stamp made. Then they become your partner.
Peel-off stamps are a problem in that not only can they be peeled off the stamp book, they can be teased off the ticket and then used again on another ticket. I once discovered a cashier sitting in the storage room (where used tickets are kept) taking stamps off old tickets and putting them in an empty stamp book. No telling how much had been stolen.
You might think this doesnít matter, since the owner has been paid for the validations. Think again. It means that nonvalidated tickets are being processed as validated ones, and the amount of the validation Ė often the total amount of the all-day ticket Ė is being stolen.
Iíll let you worry your way through the rest of the validation types; just stay away from the three above.
But one helpful hint: Use the stamps that peel off and are self-adhesive. Many people donít like to ďlickĒ stamps, so instead of gluing them on (by licking), they staple them to the ticket or, worse, just hand them to the parker. No security there at all.
A validation can be either time or money. It can be worth, say, one hour, or it can be worth $1. Which is better? For the owner, time; for the parking, money.
Letís say your rate is $1 per hour, maximum $4. That means your ticket maxes out at three hours and one minute. If it has a one-hour validation on it, and the car has been there for five hours, even with the validation the ticket pays $4. You receive $5 ($4 for the ticket and $1 for the validation). If the ticket has a $1 validation, the ticket pays only $3, and you get only $4.
It gets a lot more complicated if you say the validation is valid for only the first two hours. In other words, if the parker stays for one hour and 59 minutes, the validation makes the ticket free. If the parker stays for two hours and one minute, the validation has no value and the parker pays the entire rate. (You get the cost of the validation if you sell them in advance. However, many merchants are becoming wise to this and agree to pay only those that have affected the cost of the parking.)
This type of validation might be used for a restaurant to ensure that the validation isnít used for merchants other than the restaurant.
There are validations that work only at certain times. A restaurant, for instance, may provide validations that work only while it is open. So if a parker stays past a certain hour, or leaves their car overnight and goes home with someone else, when they return the next day, they pay the full rate.
I know a garage in Manhattan that uses its rate structure as a validation. If you come in before 5 p.m. Ė even one minute Ė you pay $15 an hour, maximum $45 plus tax. If you enter at 5 p.m. or after, you pay $5 an hour, maximum $20. This was to attract those going to the theater or dinner.
This particular garage was a couple of blocks off Broadway, but it did a land office business after-hours when it would normally have been empty.