The Best One Yet - “Non-Return of the Return” — Ecommerce *ends returns. Roku’s $100M Quibi reincarnation. Cardtronics’ ATM frenemy.

Episode Date: January 12, 2021

We’re facing a milestone in the shift to ecommerce: Ecommerce companies don’t want your returns anymore (just keep the socks). After a quick death, Quibi will be reincarnated… as Roku. And Cardtronics is the biggest chain of ATMs on Earth, but its greatest enemy is right now its greatest friend.$ROKU $CATMGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. Welcome back. It is Tuesday, T-Boy Tuesday, January 12th. So, Nick, you know we got a baby coming. We're in the third trimester now. Third and final story, I hear you.

He's a baby boy, by the way. It's true. You got an X and you got a Y chromosome. That's the takeaway. And we just did an ultrasound and guess what? The baby looks good. Jack, I'm looking at this whole sound. It looks like a microphone.

There looks like there's a microphone in that thing. It does look like the baby's holding a microphone. But his head? Yeah. 82nd percent percent out. That's something to be proud of. His head kind of looks. looks like a giant microphone.

This also happens to be, is this our best snacks daily yet? Oh yeah. Oh yeah. First story, Jack, what do we got? George Lucas headline for you, the non-return of the return. Yeah, e-commerce just decided doesn't want you to send anything back. Keep it. Keep it.

You know what? Just keep it. We don't want it. For our second story, Quibi, it feels like just yesterday that we lost you. We barely knew you. For $100 million, Quibi just got reincarnated as the Roku channel. For our third and final story, Cardronic. is the largest system of ATMs on earth.

Honestly, it's greatest enemy. Now it's short-term greatest friend. Honestly, I even visited an ATM in months. I haven't touched my wallet in months. But Snackers, before we get those three great stories, Nick and I noticed there's kind of a crime that's been eradicated in this world. Yeah, here's the thing.

You can't eat dessert with your dog. Sad truth. Every dog owner knows that after dinner, the next dessert, hot fudge is good for Sundays. Yes, it is. Bad for puppies. But Ben and Jerry have to say, decided to vindicate this by launching a doggy dessert. Poor use of the worm vindicate. Only two

flavors so far, I love the use of vindication. Ponches Mix is the first one, which is a combo of dog-friendly ice cream with peanut butter and pretzel. They named this after a Frenchie in their office, who sounds like he's kind of keto. We hope these two flavors doubles to like 15 soon, but we know why this is going down right now. Yeah, it's a cute idea, but the reason why they're probably doing this, Ben and Jerry have been watching Chewy Stock triple over the last year. Even pets are adopting pets these days. Yeah, you probably heard River's birthday coming up tomorrow. They're aware of it. True, our very own profit puppy is turning one tomorrow. Now, you already feed Fido some grass-fed, free-range, organic unicorn tenderloin. We know you

do that. Trick question, I think all parts of a unicorn are technically tenderloin. So why not splurge to make Fido's dinner a full three-course meal check? With Ben and Jerry's Doggy dessert, if you live stream that or put it on Zoom, that is good, clean, family fun for the whole family. Casper mattresses, they expanded to dog pets. Ben and Jerry's just expanded to doggy desserts. When's the first dog-friendly juice cleanse happening? Who's going to make that happen first?

Snackers, the humanization of pets just hit a new all-time record high. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal out the way. The snacks are about to hear rain food. It's air candy. Like the views of the Robberhood family It's all informational just so

You know we're not recommending any securities It's not a research report or investment advice Not an offer or sale of a security Right Snacks is digestible Business news for you Robberhood Financial LLC Member Fenra slash SIPC

For our first story E-commerce has decided That when you want to return something Yeah just keep it Just keep it We're looking at the hidden advantage of Brick and More and the hidden costs of buying online. All right, so Jack and I got to give full credit here.

Got to give the assist to the Wall Street Journal because they did the story. They did the deep dive into like you wanting to return stuff. Yeah, they John Stockton this thing. But let's say this Christmas, your dad got you a New York Giants pullover that would have been great for you 10 years ago, but you're an adult now.

Not the right fit. You're basically running like a logistics operation out of your house to get this thing out of there. Returning stuff this holiday season felt a little different than typically. To return that New York Giants pullover, you're going to have to mask up, you're going to be nervous about COVID, you're going to sanitize your hands 12 times in the store. Yeah, brutal. Oh, and by the way, there's like probably no store to go to because you shipped 70% more packages to yourself in 2020 than you did in 2019. Yeah, that pullover was

ordered online and millions of Americans are trying to return things bought online for the holidays right now, and retailers are saying, just keep it. We don't even want it back. Just keep it. So here's the wild trend. Amazon, Walmart, Target, Chewy for certain items, they just don't want you to send the stuff back. You're going to get your refund. You'll get the 30 bucks back for that hoodie. Must be nice. But you can just keep the hoodie. They don't even want it back. Jack, feels like we should do an illustrative example onto this thing. Yes, please. So let's say you ordered some darn tough wool socks in size medium in December. Yeah, maybe slim and salmon colored, but you really want to keep your feet warm. But you know what? Let's say you all.

also put on the COVID-19 over the holidays. Yeah, because your dessert had its own appetizer. Yeah, so you asked to exchange the size medium socks for the size large socks because now your big toe is actually a huge toe. Then Target, where you bought the darn tough socks, they're like, you know what? We know you're not happy with the mediums, but you just keep the mediums. We're going to send you a size large to replace them. You keep the mediums. Have them both. And the reason Target is doing this is because returns are actually really expensive for Target. For you to send in, those medium socks you don't want anymore, that's going to cost Target $10 to $20 in processing alone back in the warehouse. We're talking on like an $8 sock. And here's the funny thing. This is a growing trend, but don't expect to like just keep everything you're ordering online. Only for certain items is this a growing trend. For example, inexpensive items. Yeah, take for example those socks.

That return costs more than the socks were even worth so they're going to make you keep them. It's also happening for heavy items like furniture, like a floor lamp that you bought. The freight to get that floor lamp back to the manufacturer. Oh my God, Jack. That's expensive. It's just not economical to send it back. Two floor lamps, you need like a team of oxen to get that thing back. Now, Snackers, some of you might be thinking, hmm, I think I can scheme this system. I'm going to buy an iPhone 12 and then tell Apple I want a refund and they'll be like, here, just keep the iPhone 12. Here's your iPhone 12 max that you wanted instead. Classic case of Apple's not UNICEF. They're not going to let you do that. You're going to have to send back both. So Jack, they're on to you.

on to you. What's the takeaway for our buddies over in like all of e-commerce? Don't overlook the big secret about e-commerce, the hidden costs of returns. All right. So here's the great thing about brick and mortar snackers. People don't ask for returning or refunding things nearly as much if you're that store. You're in the store. You get to try it on. You get to touch it, feel it. You probably have a buddy there who tells you you look great. By the time you buy something in brick and mortars, you're committed. That was emotional. Snackers, Breckers, Breck and Mortars, Brick and Mortars getting married after 10 dates. E-commerce, it's like a lopin after one.

Speaking of getting married, I remember when I got my tucks for my wedding. Nick, you were there. It looked great. It was brick and mortars. The experience was fantastic. There was no chance I was returning that there. I felt like I was validating it. No way you're bringing that thing back.

Now, online shopping, on the other hand, you toss some weighted blanket willy-nilly under the shopping cart because you know you can return it super easy with a prepaid mailing. Well, Jack and I jumped in snack style. According to data from shopping, Shopify, online purchases are returned at least twice as much as regular purchases. According to another top quality data company, it's actually four times as much that things are returned when you buy something online versus in store. Meanwhile, like every store you know,

they are rushing to just add online shopping, online shopping, online shopping. We hope they're bracing themselves for big increases in return costs because you've got to add up to 20 bucks per returned item. For some businesses, that just doesn't make sense. Our second story, Cardtronics, the largest ATM network on planet Earth, could be sold for $1.7 billion. But this ATM company's greatest enemy is also its greatest friend. Jack, I'm going to set the scene here. All right, I'm going back, East Village, our apartment, 2nd Avenue 14th Street, great bodega around the corner.

You'll walk in, you'll want three bananas in an RX bar, but they got the $5 minimum. What are you going to do? There were 20 bodegas just like that within a three. block radius. Oh, don't worry. We have an ATM right here. Yeah, right there. Go to your left. Oh, wait. $4.50 fee to do that transaction jack. And then you sit there for about six seconds looking at the screen that says $4.50 cents, do you accept? And where is that accept button? I don't know. Oh, wait, that's more than the price of 50 bananas. And then you finally accept and you get angry. And that's when Cardtronics comes in. Sounds like a transformer. Actually, the company behind 300,000

ATMs globally. They didn't invent the automated. teller machine. No, they just made it famous. It's kind of like an Usher and Justin Bieber situation they got going here. Usher invented those beats. Bieber made it famous worldwide. Jack, you're picking up what I'm putting out. Now, context for those 300,000 ATMs, there are 38,000 McDonald's in the world. So there are eight times as many cartronics ATMs. But here's the thing, cartronics only owns 25% of those ATMs. The rest of them are owned by like a bunch of banks who pay cartronics to like use those ATMs. But those, but those 25% of owned and operated cartronics ATMs, they drive 87% of this company's revenue. For the rest of them,

Cartronics calls their business ATM as a service. Or Jack and I like to call it a feocrycy. No, anyone who's paid that $4.50 after six seconds of rage knows that this is a feedatorship. It's a fetatorship. It's absolutely horrible. But here is the funny situation facing Cartronics. Jack, have you touched any cash lately? Yesterday, I had to pay five. for a parking fee in a garage. First time I've touched cash in like six months. Not a thing. I mean, that's because a $5 Lincoln, it's basically a super spreader product right now. Yes, COVID has hurt cash transactions. But even without COVID, more transactions have been moving onto a smartphone and to a credit card for years now. This has been an accelerated trend. Bad for ATMs,

good for PayPal stock that has doubled in the last year and Square stock, which has tripled in the last year. And good for Bitcoin Ben, who's being Bitcoin Ben. Ben being Ben, you Venmo Victor for half your order of spring rolls, you're going to cash app Katrina to split the Netflix bill. So unsurprisingly, Cardtronic's stock has fallen 9% in the past 12 months. And the revenues last year, it's down 27% from the peak in 2017. Because of fintech, paper cash has been demoted from King. But you'd be surprised to see Cardronics's stock has doubled since November on news that it's going to be acquired by a rival called NCR. All right, so although Cartronics is shrinking overall because you're using fewer ATMs, they still manage to make like a pretty healthy profit. Something a lot of

tech companies wish they could say themselves. And apparently it's not shrinking as fast as you'd think. So Jack, what's the takeaway for our buddies ATMing over at Cartronics? Cartronics's greatest threat is actually its greatest friend. So true. For now. Snackers, the number one source of new sales growth over at the ATM company cartronics? Is partnerships with fintech companies that are killing ATMs? I'm Ron Burgundy. Jack Chime, Credit Armor, MoCoffee, all of those are digital banking apps that all just sign deals with cartronics. They're called Neo-Banks because they're purely digital. They have no physical locations, but they know that even a super tech savvy customer needs cash and needs to cash checks every once in a while. Yeah, so get this wild

stat. Withdrawals from Cartronics ATMs by customers who have a digital only bank, those withdrawals tripled in just the past year. These FinTech startups are paying Cardtronics for the right for their customers to use their ATMs. And yet, just as FinTech startups destroy

the need for Cartronics, they're also simultaneously feeding Cartronics ATM business. But we think Cartronics shouldn't get too comfortable because long term, these neobanks, they might build their own ATMs. Or they're just keeping Cartronics as a nice little bridge solution until cash truly dies sounds like a frenemy.

For our third and final story, Quibi passed away in November after eight months. It just got reincarnated as Roku. That's what just happened. I guess Roku was in the will and they got all of Quivvy shows for under $100 million. Now, Quibi basically just did its best Nick Cage impression. What would you say, Jack? It raised $2 billion. It launched.

It shut down. It's gone in 60 seconds. Yeah, you know, the whole like short form quality show. shows for commuting thing. Didn't really work in a pandemic when nobody's commuting. You're not going to watch Quibi on the four train when you're not on the four train. Now Quibi is trying to salvage money for their investors. So they're selling off parts of Quibi like scraps like your uncle's 1996 sob 900. Brutal Jack. And they just sold the very most valuable part. Content is king snackers. And Roku just acquired the content kingdom of Quibi for less than $100 million. So we're

talking, I mean, Jack, look at this, look at these numbers here. 75 Quibi shows, now part of the smallest player in the streaming war is Roku. This would make up quite a DVD collection if DVD still existed. Chrissy Teigen, Kevin Hart, Nicole Ritchie, they all had their own shows on Quibby. Jack, remember the J-Lo show? She gives away a million dollars, and then that person has to give away half a million dollars, and it goes on, on, on. And then that person has to give away half of a half a million dollars. Oh, there's also the murder house flip show, which was like a home improvement show and a murder mystery show sounds like a podcast. But now that Quibi's not in the content streaming wars anymore, they're like your buddy who studied really hard for a test,

made an epic cheat sheet to prepare for that test. Timmy. But then he got expelled. So he's like, here, take my cheat cheat. Yeah, he did. Give me five bucks. I'll be good. What are you going to do with it? I'm not doing anything. I don't even go to school here anymore. But the funny thing about all this content snackers is that because content is king, content is really expensive. Corby spent a lot of lot of money to develop those 75 shows. In fact, they spent $100,000 per minute of show on average for about a billion dollars total. Netflix, by the way, just bring a little context on this thing. Netflix splurges $17 billion on its own content every year. Let's go a little more micro.

Game of Thrones spent $100 million on just the final eighth season. Just the eight season. And that was only six shows. So shows are expensive. But Roku is putting on his Maxinista sunglasses, storming into the aisle and found a billion dollars worth of MSRP shows for 90% off. Not too shabby. Same price as the worst Game of Thrones season. That was also the last Game of Throne season. And all 75 former Quibi shows are now coming to the Roku channel,

a free streaming channel that works on all Roku smart TV devices. But Jack, you know, the guac is always extra. I do. That's why Roku is going to put ads up. up inside, around, and all about these shows to make some ad revenue. So, Jack, what's the takeaway for our buddies over at Roku? In the streaming wars, Roku now owns the train station and the train. And the train, Snackers, a billion dollars of Quibi content.

It's kind of like, think of this as a first class cabin on a lovely long-distance train ride. Now that Roku has original content, Roku channel is right up there with Netflix, HBO Max, and Disney Plus. But all that content on that content train, that isn't what separates Roku in the streaming wars. It's the train station. Roku also owns the platform that these streaming videos stream on. Get this Snackers, 43% of streaming TVs in the United States, they're using some form of Roku technology. You might own an Apple TV.

You might own an Amazon Firestick. More people own Roku products. Owning this platform, that's what's given Roku a whopping fibrillow. million users and a $50 billion valuation. The smallest player in the streaming wars just added a brand new bicep. The train and the train station. Jack, can you whip up the takeaways for us over there? Sure can. Snackers, if you try to return a holiday gift, they might tell you, just keep it. Yeah, because e-commerce has some major, major hidden return costs. For our second story, Cardtronics is clinging to its 300,000 ATMs, which are slowly but surely over the years,

becoming obsolete. And until they become obsolete, it's going to milk, you know, fintech companies with ATMs as-a-service feocracies. For our third and final story, Roku just nagged itself 75 shows for a rock-bottom price. Savvy moves by the smallest streaming company that could. Now, time for our snack fact of the day. This one sent in by Mike Donahue and the entire subtext team located on lovely 22nd Street and 7th Avenue. Cafeteria? I think that's on 22nd street and seventh avenue. I think it's kitty corn. I think you're absolutely right, Jack. Chelsea, lovely. What's the dive bar that's named after like an airplane? That's also there, I think. Trick question, it's called dive bar.

According to Mike, the longest word that you can type with just your left hand on a keyboard, stewardess is. Stewardesses. If you can find something longer, please type it out and send it to us, and we'll test it with our left hand only. Also, Jack, we just set ourselves up for the perfect follow-up snack fact. What's the longest word you can type with just your right hand? I'm looking at the keyboard here and I see that hung is typable. Jack, I just beat you with Plump. Snackers, we loved being here with you today. If you got buddies who haven't snacked yet, please text them H-Y-H-Y-S-D. Ask them, have you had your snacks daily? Nick and I'll see you tomorrow. Can't wait if you know, you know. And before we go, Snackers, we just want to say thanks to

Koda Brown and all the members of the 129th Air Force Rescue Squadron who are about to be deployed overseas very soon. Thank you for your service abroad so that we can snack safely. And thanks to the whole squadron for snacking. Also, happy birthday to Nikki Bonner just got the new job over in Harrisburg, Pennsylvania. And congrats Greg Pink, who just passed his CSM certification. And happy birthday, Sarah Marcello over in Leesburg, Virginia. And this one was shouted out by two Olds Sisters who want to let me. Maddie no happy birthday from San Diego, California. Meanwhile, happy birthday to Francis Wright

in Walnut Creek, California. And Wiley, happy birthday down in Charlotte, North Carolina. This is Jack. I own stock of Amazon, Nick owned stock of Shopify, Apple, and Square. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA

SIPC.