Sheetz to begin accepting cryptocurrency payments at select stores

Sheetz will begin accepting digital currencies like Bitcoin, Ether, Litecoin and Dogecoin through digital currency payment company Flexa.

The Altoona-based restaurant and convenience chain announced on Thursday that it will be the first convenience store chain to accept bitcoin when it begins accepting payments through Flexa this summer.

When available, customers will be able to use a variety of cryptocurrencies to pay for items in select Sheetz’ convenience stores. Later in the year, Sheetz also intends to begin accepting Flexa payments at its fuel pumps.

Sheetz currently operates 622 stores in Pennsylvania, North Carolina, Virginia, West Virginia, Ohio and Maryland.

“…We are constantly innovating and exploring new offerings to truly give our customers what they want, when they want it, 24/7/365 — that includes accepting many forms of payment,” said Linda Smith, payments manager for Sheetz. “We’re very excited to be working with Flexa to roll out support for cryptocurrencies and other types of digital assets at our stores.”

Flexa, based in New York City, offers cryptocurrency payments through a number of apps including Gemini, BRD and Coin List. The company also enables Flexa in other company’s apps.

To enable Flexa’s instant authorization process for digital currency payments, Sheetz worked with its point-of-sale technology partner, NCR.

“With interest in digital currencies reaching all-time highs, it’s easy to lose sight of the fact that there are real, tangible benefits for the merchants who accept them—not only reduced fraud and cost savings, but also a better and more mobile customer experience,” said Trevor Filter, co-founder of Flexa.

Ollie’s opens 400th location on its way to 1,050

Ollie’s Bargain Outlet opens its 400th store this week. PHOTO/FILE

Ollie’s Bargain Outlet opens its 400th store this week and by the end of the month will have opened locations in three new states.

The Harrisburg-based discount retail chain announced this week that it would be opening its 400th store out of a targeted 1,050 locations it plans to open across the country in the coming years.

The new location is in Vermont and will be the company’s first in the state. It will be followed by Ollie’s first locations in Kansas and Missouri later this month.

Ollie’s current growth plan has seen it expand by nearly 50 stores a year, mostly on the East Coast. Last year, the company opened a new Texas-based distribution center, which has allowed it to expand into the Midwest, according to Tom Kuypers, senior vice president of marketing at Ollie’s.

The bargain outlet opened 46 new stores in fiscal 2020 and saw its store sales increase by 15.6%. Ollie’s total net sales increased by 28.4% to $1.8 billion dollars and its net income increased 72% to $242.7 million.

“We had a tremendously successful year,” said Kuypers. “As people got through the pandemic we were able to be open and could continue to serve our communities. As people were economically distressed we could offer that value and we were rewarded for that.”

Ollie’s says it has yet to find a market where its customers aren’t interested in the company’s value proposition, but as the company expands outside of the East Coast, it is finding that customers lack the brand awareness that its Pennsylvania customers have.

“When we open in Kansas or Vermont, people don’t know us and we have to work harder at building the brand,” said Kuypers. “But, at the same time, our business model is solid and it translates across state borders.”

Staff at the company’s Harrisburg headquarters currently numbers 175 people. Ollie’s is hiring for a number of positions and expects the number to continue to increase alongside the growth of its stores.

“We went public in 2015 and from that point forward we have been on this growth trajectory,” said Kuypers. “To manage a chain of 400 stores and growing to 1,050, every function needs more people.”

Minority- and women-owned businesses big recipients of Lancaster’s small biz emergency funds

The $1.525 million Lancaster City Small Business Emergency Fund disbursed money to 143 businesses during its allocation round, it was announced June 22.

Created to support Lancaster city small businesses hard hit by the coronavirus pandemic, the fund received 232 applications from April 29 to May 10. Each was reviewed and scored based on eligibility requirements to ensure demographic diversity of ownership, geography within the city and diversity of industry.

Fifty-seven percent of recipients were women-owned businesses and 50% were businesses owned by people of color.

The fund included $1.25 million in highly flexible, low-interest loans and $275,000-plus in grants. According to the release, more than four times as many applicants sought grants rather than loans.

“We are overwhelmingly pleased that this fund has reached so many underserved businesses in our community,” says Daniel Betancourt, president and CEO of Community First Fund, said in the release.

The recipients included barbershops and salons (21%), retail stores (18%) and restaurants and food businesses (17%). More than 55% are located in downtown Lancaster.

The most common planned uses for the money – grant or loan – were rent or mortgage payments (51%) and payroll (21%). In total, 118 grants worth a combined $274,400 were handed out and 25 loans worth a combined $561,000 were distributed.

ASSETS, Community First Fund and the City of Lancaster developed the fund with the city’s “most vulnerable small businesses in mind, specifically women- and people of color-owned businesses,” according to a release. “These businesses historically struggle to receive traditional financing and recently experienced difficulty receiving funding from the U.S. Small Business Administration’s Paycheck Protection Program.”

Money was contributed by the City of Lancaster, ASSETS, Community First Fund, EnCourage Lancaster, Fulton Bank, the High Foundation, the Ferree Foundation, Rodgers & Associates, and James and Kanako Clarke.

A second phase for the Lancaster City Small Business Emergency Fund is under discussion.

Business owners face legal risks by defying Wolf’s order

Governor Tom Wolf warns counties and business owners there will be consequences if they open in violation of his stay-at-home order. PHOTO/FILES –

Business owners thinking of defying the Wolf administration’s stay-at-home order must weigh the legal liabilities and other risks before hanging that “Open For Business” sign in the window, legal experts say.

The risks include:

  • Losing a state issued operating license.
  • Lawsuits if a customer contracts the virus on the business owner’s property.
  • Workers’ Compensation complaints from employees who become sick on the job.
  • Denial of insurance claims for businesses that opened in violation of the governor’s order.
  • Loss of reputation, or customers.

“It’s not a slam-dunk liability, but it is a real risk for businesses that decide to open,” said Martin Siegel, an attorney with Barley Snyder who leads the firm’s COVID response team and also holds a master’s degree in public health and formerly worked for the Centers for Disease Control and Prevention. “We’re in entirely new territory, here.”

Over the weekend, several counties that were not included in Gov. Tom Wolf’s list of those moving from the red to the yellow phase to re-open, announced plans to re-open on their own. Those counties included Cumberland, Dauphin, Lancaster, Lebanon, Perry and York.

Some Lehigh Valley counties did the same, including Northampton, Berks and Schuylkill.

District attorneys for many issued statements saying they would not prosecute businesses for failing to comply with the Wolf administration’s three-phase, county-by-county reopening process.

Wolf denounced the county efforts as “cowardly,” and pledged there would be consequences if they go forward with their plans.

“I cannot allow residents in a red county to get sick because their local officials can’t see the invisible risk of the virus in their community,” he said in a statement. “So, I must, and I will impose consequences if a county locally lifts restrictions when it has not yet been given the go-ahead by the state.”

The weight of the governor’s authority is something business owners should consider when making their decision, said Rebecca Warren, former Northampton County Judge, and former District Attorney, now with the Norris McLaughlin law firm in Allentown.

“The governor has the authority to potentially have a business owner’s license revoked,” she said. “Will that actually happen, I don’t know… but there is a lot of uncertainty for business right now in Pennsylvania.”

Business owners must weigh all of the risks and make a decision “based on their needs,” she said. “It’s really daunting for the small business owner to know where they stand legally.”

Siegel agreed.

“As of today, I haven’t seen anything that changes the legal mandate of the governor’s order,” he said.

Virginia company buys 26 Dollar General stores in Pennsylvania

An unnamed Virginia-based private investment group purchased 26 Dollar General stores throughout Pennsylvania for $36 million earlier this month.

The free-standing stores, each with approximately 9,000 square feet of retail space, are leased to Dollar General Corp. and have between 12 and 13 years remaining on their leases.

The stores were sold to the Virginia company by Dallas, Texas-based real estate company SRS Real Estate Partners on behalf of Tennessee-based GBT Realty Corp.

SRS did not specify where the 26 single-tenant properties are located, but noted that they are all in “key suburban areas throughout Pennsylvania.”

“Discount retail continues to thrive as Dollar General, and its peers, open more stores each year,” said Andrew Fallon, executive managing director at SRS National. “For the net lease investor, these assets provide an attractive combination of credit, lease term and passive ownership, making dollar stores some of the most actively traded net lease properties in the market.”

Dollar General currently operates more than 15,000 stores in 44 states.

Rite Aid appoints new retail executive

Rite Aid appointed Andre Persuad as its new Executive Vice President of Retail on Tuesday. (PHOTO/ SUBMITTED)

Rite Aid’s newest executive vice president of retail joined the Camp Hill-based pharmacy chain this week.

Andre Persuad, a former executive consultant of Keasbey, New Jersey-based supermarket cooperative Wakefern Food Corp., will be leading the retail operations of Rite Aid’s 2,400 retail pharmacy locations.

Within his new role, Persuad will be responsible for store operations, inventory and supply chain management, field team management and asset protection and facility maintenance.

“Andre has demonstrated proven success when it comes to leading a transformational retail strategy,” Heyward Donigan, CEO of Rite Aid, said in a press release on Tuesday. “The company has many exciting growth initiatives planned for 2020 and beyond. With Andre on board, we will move quickly to build on existing Rite Aid customer loyalty and implement a compelling, go-forward retail vision.”

Persuad has 25 years of retail leadership experience at organizations such as Wal-Mart Canada, Burlington Stores and Shopko. He said he is looking forward to joining Rite Aid at a time where customer expectations of retail pharmacies are rapidly changing.

“They want a more engaged health and wellness experience, more relevant, curated merchandise and a seamless retail experience,” Persuad said.

Walmart adds education benefits

Walmart, the world’s largest retailer and Pennsylvania’s largest employer, has unveiled a plan to assist college-bound teens who come to work in its stores.

The giant retailer, with 11,348 stores worldwide, and 4,756 in the U.S., has 2.2 million employees across the globe and 1.5 million in the U.S, and nearly 51,000 in Pennsylvania, but it needs more young bodies, officials say.

Under a new program, those young workers will get more than a blue vest and a name badge. They’ll get access to free SAT and ACT test prep courses, tuition subsidies, and even college credit.

The program, which kicked off in June, is an expansion of Walmart’s “Live Better U education benefit,” formerly known as “Associate Education Benefits.”

That program supports employee education at every level and includes its $1 a day college program, cost-free high school education to associates and eligible family members, discounts on higher education programs like master’s degrees, foreign language learning and more.

Under the expanded program, high school students will have access to jobs with scheduling options for flexibility, free ACT and SAT prep, up to seven hours of free college credit, and an a debt-free college degree in technology fields including cyber security and computer science, or business or supply chain management.

Walmart also offers a completion bonus of up to $1,500 for college graduates who had not previously completed college credits. About 5,000 of those will be awarded each year.

“High school students face challenges when it comes to work and education,” the company noted in a press release.

A recent study from the Center for Microeconomic Data at the Federal Reserve Bank of New York noted that student loan debt was $1.48 trillion in the second quarter of the year. Nearly 11 percent of those loans were delinquent by 90 days or more.

Walmart officials also cited data from the Bureau of Labor Statistics noting that by 2024 only 26 percent of teens will have a job.

“It’s been shown that having a job helps teens build confidence, work ethic, independence, financial knowledge, and perhaps most importantly, creates work experience that helps students as they transition into adulthood and a career,” Walmart officials noted in the press release.

In 2016 Walmart began opening training academies where employees could earn while they learn. It now has over 100 of these academies where students receive instruction on retail fundamentals and area specific skills in more than 65 positions.

There are 161 Walmarts in Pennsylvania, nine of which are within 25 miles of Harrisburg according to figures published by Walmart.

Double-edged sword: Digital technology can help businesses – except when it doesn’t

A pair of chainwide cash register crashes at Target Corp. in June, right around the heavy-sales Father’s Day weekend, may have cost the national retailer $50 million to $100 million in lost sales, according to some analysts.

The problems — one of which the company blamed on a “technology glitch,” while another was traced to a tech center run by NCR Corp. — were quickly corrected, but they also point to a deeper issue, said some local experts: Technology has helped to boost business productivity, but it’s also exposed companies to a host of challenges.

Richard Stoneberg (Photo: Submitted) –

“There is indeed a tradeoff between absolute security and meeting business needs and functions,” said Richard Stoneberg, chief information security officer of Allentown-based Netizen Corp., which serves as a ‘virtual’ CISO for several businesses. “If I turn off my computer, put it in a vault and I am the only possible person who could open it – I truly have very good security on that computer. But it is not terribly functional for me either. So the suggestion is pretty straightforward: Do a true IT security overview of your data and processes in a risk-based, cost-effective mindset.”

Each business will have a unique solution, he added, and “even businesses in the same type of work can be different. There are cloud-based solutions that can work,” as well as redundancies and others that can reduce the risk of outages.

In general, there are three “pillars of good security,” according to Stoneberg: confidentiality, integrity and availability. The first involves considering how data is kept confidential or secured against hackers. Integrity refers to the correct billing or charge to the correct person at the correct time, while availability ensures that a customer can actually purchase a company’s goods.

Preserve human element

The human component is another important factor, according to Devin J. Chwastyk, a Harrisburg-based member of McNees Wallace & Nurick LLC, and chair of the law firm’s privacy and data security group.

Devin J. Chwastyk (Photo: Submitted) –

“Keep in mind that the vast majority of computer crime and hacking incidents are usually traced to security and other vulnerabilities associated with the people using a computer,” he noted. “It’s a matter of HR training so employees will avoid clicking on unknown links and engaging other risky online behavior.”

He said some regulated industries, such as medical facilities that are governed by HIPAA, or the Health Insurance Portability and Accountability Act of 1996, have been “ahead of the curve when it comes to training, controls and best practices, but now they’re trickling down to other industries.”

Chwastyk also had advice for companies that tie their IT systems to vendors’ setups. “We work on these kinds of issues and address them with contractual terms,” he said. “You want terms in the agreement with vendors to define issues like the level of performance to be delivered, and what kinds of remedies will be available if they fail to meet those standards.”

Businesses may also wish to consider cybersecurity and business interruption insurance policies, he added.

“Depending on the circumstances of an incident, there may also be reporting requirements,” he noted. “Generally, a simple outage won’t trigger them, but all 50 states have notification requirements for a ransomware or other security breach that exposes personally identifiable information. If your company does business internationally, you may have to consider European Union and other reporting requirements.”

Cost matters, too

Companies need to ask themselves “what’s it worth to me to keep my operations up and running?” said Charles Getty, director of information security at York-based Business Information Group. “But it’s not unusual for small- and medium-sized businesses to balk at doing that. They often don’t seriously consider it until they get hit.”

Besides doing a cost-benefit analysis, there are other considerations, he added. “In general, companies can use ‘cluster technology’ [a set of connected computers that effectively work as a single system] as a kind of ‘fail-safe system,’ so if one goes down, others will take over the load,” Getty noted. “But the challenge there is that if one gets compromised, say by ransomware, the threat can quickly spread. One solution to that is to have a separate, offline backup too, but that can take time.”

The best approach, he said, is to “assess your risks — from cyber threats to natural disasters — and consider the impact on your business operations. Then consider the possible solutions and how they fit with your budget.”

Brandon Keath (Photo: Submitted) –

One of the quandries facing businesses is the dichotomy between security and productivty, pointed out Brandon S. Keath, cybersecurity practice lead at Mechanicsburg-based Appalachia Technologies LLC.

“Technology can be considered as a door that helps companies get their goods and services to market easier and faster,” said Keath, who also runs PAHackers, an “ethical hackers” organization. “Security is the lock that guards things. But when you put a lock on a door, it’s tougher to get through it to make your delivery.”

Once a business comes to terms with that, Keath said it should “invest in redundancies and periodically test” the systems. But many companies don’t have a backup plan, or its limited, or they’ve never tested it, he added.

He also noted that high turnover among technology professionals compounds the problem.

“Something happens and no one knows exactly how the system works, because the person who designed it is no longer there,” Keath said. “This happens in small companies and multibillion-dollar ones. Businesses need to properly document any changes or additions to the IT system.” <

The best defense

A hardware or software vulnerability in a computer system is, in reality, a mistake made by its designer, according to Ronald C. Jones, a cyber security instructor at Harrisburg University.

“Each company that designs computer system has a cost-tradeoff point where more vulnerability testing decreases the profitability of the computer system,” he noted, highlighting some best practices that can help to reduce the number of mistakes in a system.

“Use software fuzzing,” he suggested, referring to running a program with a wide variety of “junk” input that can highlight abnormal or other unexpected results.

Another is to utilize “common criteria,” which refers to products that can be evaluated by competent and independent licensed laboratories that can determine particular security properties.

As an additional precaution, added Jones, companies may consider “third-party review by someone who was not involved in designing the computer system.”

In Target’s case, the cash registers “suffered from a systems design flaw, a monolithic design which created a single point of failure,” he said. “Target was not clear but inferred it was some type of computer system design. It is cheap to build and operate a monolithic system, that is, until it fails. The best-practice approach is to have redundant systems and have half of the company operated on one side. Another approach would be to operate on one system on even number months and the other on odd number months.”

There can be a big tradeoff between productivity and vulnerability when it comes to designing computer systems, according to Andrew Hacker, Harrisburg University’s cyber security expert in residence, and CEO-founder of Thought, a blockchain technology company. “New and improved technology can bring significant productivity enhancements, but it can also bring cyber security and other risks.”

The problems are not limited to Target or other retail chains, he added. Hacker pointed to mobile phones as an example, noting that “cybersecurity was not considered a problem when they were introduced.” But now, with smartphones holding banking and other sensitive information, “more threats have emerged.”

His suggestion: “Bring in internal or external cybersecurity partners as early as possible.”

Hacker, who previously worked as the deputy to the state of Pennsylvania’s chief information security officer, said technology security personnel “were at the table early on as each department rolled out new projects. It may cost a bit more, but this approach provides more security.”

To minimize the chances of a systemwide failure, Hacker said, companies should consider installing redundant and hardened, or secure, systems.

“You do have to consider the cost, but also consider the cost of downtime,” he noted. “Also, when your systems interact with an outside provider, take the time to test their compatibility. In the beginning, most systems were closed, but now it’s common for external vendors to be hooked into a company’s system, so there’s a greater need to review the systems, maintain their continuity and consider backup plans.”

Shipping out: After court ruling, Pa. distillers debate laws on interstate shipping

A recent U.S. Supreme Court Decision regarding residency requirements for liquor sales in Tennessee is giving hope to some Pennsylvania distillers, who see direct shipping of vodka, rum and gin as the future of their industry.

Others, however, are more circumspect.

Robert Cassell, president of the Pennsylvania Distillers Guild, said shipping spirits directly to consumers in other states isn’t illegal. However, it is prohibitively restrictive with a hodgepodge of laws in different states.

“It makes it not very cost-effective from the distillers’ perspective,” he said. Nonetheless, he said, the guild is not pursuing any changes to Pennsylvania law.

Bagged to go

In the Tennessee case, decided in late June, the Supreme Court ruled essentially that states can’t impose liquor laws that make it tougher for out-of-state businesses than for in-state businesses.

Holla Spirits founders Patrick Shorb, left, and Matt Glaser showcase Boozin’ Bags, which the company ships directly to consumer. The company, based in West Manches-ter Township, York County, believes changes to state laws nationwide could lead to growth in shipments to other states. PHOTO/SUBMITTED –

Patrick Shorb, president of Holla Spirits in West Manchester Township, York County, said he was particularly excited about the possibility of relaxing interstate shipping rules. His company’s latest product line, Boozin’ Bags, was designed specifically for easier shipping, opening up a larger market.

Unlike glass bottles, which are heavy, fragile and hard to ship, Holla’s Boozin’ Bags are similar to bags used in boxed wine but with vodka instead. The bags are more lightweight, packable and durable than glass.

The company already has made some headway in shipping in-state, boosting its sales beyond the 70 state-run liquors stores and its tasting room where the spirits are sold.

“Whether you’re from Erie or Allentown you can get Holla,” Shorb noted.

He said if laws were changed to facilitate shipping to consumers in other states, it could help Holla expand from a limited craft distillery to a traditionally licensed facility and compete on a larger scale.

“We would love that ability to ship out of state,” he said.

Direct shipping to consumers is the direction in which the industry is heading, said Chad Butters, founder of Eight Oaks Craft Distillers in New Tripoli, a small town in Lehigh County. The distillery operates stands in York’s Central Market House and in Harrisburg’s Broad Street Market.

With ecommerce sites like Amazon and food-delivery sites like Grub Hub, consumers seem to want a variety of goods delivered to their doorsteps.

“I think we will all have to adapt to the self-distribution model,” he said. “I think it’s something we will have to do, but I think it will help us grow.”

So changes in state liquor laws across the country, he said, are needed

He said there are a number of circumstances where easier shipping would help Eight Oaks, which makes vodkas, gins and whiskeys.

Being a farm-based distillery that grows its own grain, Eight Oaks is a bit of a tourist destination and attracts visitors from across the country hoping to sample spirits and enjoy food and entertainment in the company’s tasting room.

“They meet us. They interact with us. They like our product,” Butters said.

Then, after those guests go home – and run out of the spirts they purchased in the tasting room – they often call Eight Oaks looking to order more.

In most cases, he said, he has to turn them down because of restrictive laws.

“It’s not just Pennsylvania. It’s also other states and what their laws are,” he said.

But, while it would certainly spur growth, shipping out of state also would add to his already heavy workload, so he can see positives and negatives.

Right now, he said the business is doing well by pitching itself as a hyper-local craft distillery.

“We have deep roots here in a small community,” he said.  So while out-of-state shipping might be a nice boost, it’s not something he’s actively pursuing.

Anthony Brichta, president and CEO of County Seat Spirits in Allentown, also sees the possibility of expanded shipping from different angles. County Seat distills vodka, bourbon, gin and rum.

“Any time it gets easier to get your craft product in a customer’s hand, it’s a good thing,” Brichta said.

On the other hand, he said, it would be easier for craft distillers in other states to ship into Pennsylvania and add to the competition.

He said he’s been looking at the issue and discussing it with fellow craft distillers, but still hasn’t formed a strong opinion.

Cassell, head of the state distillers’ guild, said expanding shipping options for craft distillers is an intriguing idea; however, it is not on the top of the organization’s agenda.

He said multiple changes would be needed in states across the country to create a workable and equitable system for interstate shipping of spirits, including issues of taxation and licensing fees.

Meanwhile, despite what he called very reasonable laws regulating craft distilleries and shipping within Pennsylvania, in-state shipping can still be problematic because of policies imposed by UPS and FedEx that make it difficult for craft distillers to gain licenses to ship their products at all.

A spokesman for UPS said the company does ship wine; it generally does not accept liquor shipments as a protective measure because liquor is treated differently than wine in most states.

Cassell said it is a fairness issue and he would like to see classifications changed so that craft spirits would be treated the same as wine.

“For us right now the UPS/FedEx issue is the core first thing we’re looking at,” Cassell said.

Until it’s easier for craft distillers to obtain shippers, he said, changing state laws won’t be of much benefit.

With new online games, Pa. Lottery reports record fiscal year

With additions such as online games, the Pennsylvania Lottery is reporting a record year for sales and profits.

Photo: Submitted

Drew Svitko, executive director of the Pennsylvania Lottery, said it sold more than $4.5 billion in games for fiscal 2018-2019. It also generated a record profit of more than $1.14 billion, which goes towards programs benefiting older Pennsylvanians.

Svitko said it is the eighth consecutive year that the Lottery has had more than $1 billion in profits.

More than $2.9 billion in prizes were distributed to winners, which Svitko said was also a record.

The new lottery offerings did contribute to sales.

Svitko said the Lottery’s modernization efforts, including PA iLottery and its monitor games, Keno and Xpress Sports, generated more than $40 million in profits in their first full fiscal year.

“We are thrilled that the new and exciting games that were authorized by Act 42 of 2017 are proving to be a tremendous success,” he said.

PA iLottery, online games played on a computer, tablet or mobile device, saw more than $381 million in play in its first full fiscal year, generating an estimated $31.3 million in profit.

More than 91,100 players created online accounts during the fiscal year.

Monitor games such as Keno and Xpress Sports games, which are displayed in such areas as bars and lottery retailers, brought in an estimated $46.7 million in their first full fiscal year, and generated around $10 million in profit.

Of course traditional lottery games such as scratch off tickets and draw games also did well.

Svitko reported that sales of Scratch-Off games totaled a record of more than $2.9 billion, up by $165.5 million, or 5.9 percent, from the previous year. Scratch-off games account for more than 66 percent of total sales.

Svitko said sales of Draw Games such as Cash 5, Match 6 and Powerball totaled close to $1.4 billion for the fiscal year, up $109.4 million, or 8.7 percent, from the previous year’s total.

There were more than 9,700 licensed Lottery retailers statewide during the fiscal year, many of them small and family-owned businesses.

They earned an estimated $266 million in sales commissions, an increase of more than $41.8 million from the prior fiscal year, 2017-18.

Is it big time for Bitcoin? Deal with Sheetz seen as a step toward mainstream acceptance

As purveyors of Bitcoin seek out mainstream acceptance, the cryptocurrency – arguably the best-known in a diverse field – may have just gotten a boost in Pennsylvania.

An example of the type of Bitcoin ATM kiosks that will be installed in six Sheetz store in Central and Western Pennsylvania and North Carolina. (Photo: Submitted)
An example of the type of Bitcoin ATM kiosks that will be installed in six Sheetz store in Central and Western Pennsylvania and North Carolina. (Photo: Submitted) 

Altoona-based Sheetz has signed an agreement with Coinsource, a provider of Bitcoin ATMs, to install Bitcoin ATM kiosks in five of its Pennsylvania stores and one in North Carolina.

The kiosks will allow customers with registered Bitcoin accounts to purchase more bitcoin or exchange it for cash.

For Sheetz, which has 580 locations, primarily in the Northeast U.S., the kiosks give people another reason to walk through its doors.

It’s not the convenience-store chain’s first foray into novel products or services. It recently added CBD oil products to shelves at 140 of its locations.

“Sheetz is constantly innovating and pioneering new offerings to give our customers what they want, when they want it, 24/7,” Ryan Sheetz, assistant vice president of brand at Sheetz, said in a statement announcing the agreement with Coinsource. “As cryptocurrency increases in popularity and demand, we are excited to add this service in our continual mission to be the ultimate one-stop-shop.”

For promoters of Bitcoin, however, it’s a small but important leap into mainstream credibility.

“Not only is it making it easier for the everyday public to use [Bitcoin], it really brings Bitcoin to the everyday consumer through a well-trusted, family-owned business,” said Derek J. Muhney, director of marketing and national sales at Coinsource.

Sheetz is not the first retailer to offer Bitcoin ATMs in its stores, but it is one of the more well-known.

Other providers in the region have Bitcoin ATMs, but most are in smaller independent shops. For example, the website coinatmradar.com shows Bitcoin ATMS at the U.S. Gas N Go on Airport Road in Allentown and at the Army & Navy Store in Whitehall.

Coinsource is one of the largest Bitcoin ATM providers, with 5,000 Bitcoin ATMs around the world.

Muhney said Coinsource currently has 250 machines in 30 U.S. states. By the end of the month that should increase to 300 machines in 40 states. The company hopes to have Bitcoin ATMs in all 50 states by year’s end.

“It definitely helps that such large businesses such as Sheetz are identifying that their customers are looking for this,”Muhney said.

And the demand for easier access to Bitcoin may be greater than those not following the evolution of cryptocurrency might realize, said Hank Korth, co-director of the computer science and business program at Lehigh University in Bethlehem.

“This space is not all Bitcoin. That’s just the one that gets the most media attention,” Korth said. “But there are other significant players, especially for international currency exchange.”

He cited the Libra Consortium, led by Facebook, and J.P. Morgan Chase & Co., the New York-based banking giant.

Korth said Bitcoin and other cryptocurrencies may have started out with a bad image. Because they weren’t as traceable as traditional currencies, they were often used for illegal transactions.

People dealing in drugs, sex trafficking and even terrorism used cryptocurrencies on dark-web websites like Silk Road.

“That kind of unsavory reputation has tarnished Bitcoin in some peoples’ minds,” he said.

He said there were also concerns over security, with stories of people’s accounts being hacked and wiped out.

But, Korth said, those incidents were more about the security of the exchanges where Bitcoins were being traded than about the cryptocurrency itself. Bitcoin, by its blockchain-based design, he said, is very secure because it is crowdsource-protected.

And now, he said, the technology is energizing the way people make financial transfers.

“The way we do things as compared to what we can do is actually pretty archaic,” Korth said. “Checks are stupidly insecure.”

Plus, he said, the way ATM kiosks process Bitcoin adds to the security and traceability of the currency.

A user needs to provide a photo driver’s license to register and use an account and is given a unique personal identification number. The number gives the same kind of trail that making purchases with a credit card would, but still offers security because it isn’t stored alongside personal information.

Muhney noted that Bitcoin can actually be used to make a surprising number of purchases, from booking a flight on Virgin Airlines, to buying a Tesla automobile to renting a pad on Airbnb. He said many colleges and universities have recently begun accepting Bitcoin for payment.

Korth noted that for a time there was a Subway restaurant in South Whitehall Township that accepted Bitcoin as payment.

The shop has since closed because of redevelopment in the area, but for a while he said it was drawing in people from far distances because of its Bitcoin acceptance.

“People would drive for miles because they want to buy a footlong with their Bitcoin,” Korth said. “There is a true enthusiast community out there.”

Besides making Bitcoin more accessible, Muhney said, ATMs are a big help to underbanked populations, which are generally urban and low income, or people who simply choose not to have a traditional bank account.

But there are a couple of quirks to the use of Bitcoin that still need to be worked out before Bitcoin ATMs can become a ubiquitous source of currency in the U.S., Korth said.

Because trading in Bitcoin is considered making a purchase of property, it is technically subject to capital gains taxes.

“Let’s say I go to Sheetz and take money out of the Bitcoin ATM, then I walk over and buy a coffee. That’s a reportable sale of property … with the same rules as the exchange of foreign currency,” Korth said. “That’s an obvious barrier to transactions.”

Currently, tax regulations on such small transactions aren’t really being actively enforced. And to avoid complications, it’s likely the IRS will reword regulations to exempt, for example, exempt transactions under $200 or so.

With such changes, Korth, said the proliferation of Bitcoin ATM kiosks could give traditional banks a run for their money.

“This creates a nice convenience here,’ he said. “Now you have a new way of banking.”

The following Sheetz locations will feature Bitcoin ATMs:

  • 1915 Pleasant Valley Blvd., Altoona
  • 1315 Lincoln Way E, Chambersburg
  • 7970 Linglestown Rd., Harrisburg
  • 3025 Babcock Blvd., Pittsburgh
  • 101 Valley Vista Dr., State College
  • 2505 Somerset Center Dr., Winston-Salem, North Carolina