By Dolores Kong
The Boston Globe

I got a few e-mails of protest about my column last
week on the Coinstar coin-counting machines and their
8.9 percent fee, so I decided to investigate further
with some loose change of my own.

While the e-mail writers objected for a variety of
reasons - ranging from how the column could hurt the
availability of such a service to how it cast a
negative light - one in particular prompted me to
empty my pockets.

"I am writing to correct a misperception in your
article," wrote Michelle Avila, director of Coinstar
public relations. "Coinstar customers who choose to
donate their coins to nonprofit organizations such as
the American Red Cross or US Fund for UNICEF receive a
tax- deductible receipt for 100 percent of their
donation. In other words, Coinstar does not charge
them 8.9 percent and as a result we do not profit from
our relationship with groups such as the American Red
Cross and US Fund for UNICEF."

She was particularly concerned that the column might
give Boston- area residents "the misguided impression
that Coinstar is not a good way to donate to the Red
Cross and UNICEF. Now is a critical time for the
UNICEF campaign as the US Fund collects most of its
money during the month of November."

With an appeal like that, I had to go to a couple of
local supermarkets and use the Coinstar machines to
make my donation.
But what I found surprised me: The machines don't
always count the change correctly.

While it's true the machine states on its video screen
to a customer choosing to donate the change "you will
receive a tax- deductible receipt for the full value
of your donation," the machine sometimes comes up with
the wrong value, as I found out.

In my less-than-scientific survey involving five
different coin- counting transactions at two different
machines, the change was undercounted twice,
overcounted once, and on the money twice.

Charles H. Carroll, assistant director of the
Massachusetts Division of Standards, said his agency
has gotten a couple of consumer complaints about the
coin-counting machines over the last few years. "The
big thing is maintenance," said Carroll, who recalled
one complainant being shortchanged about $2.

While the division inspects certain machines, such as
bottle- return machines, once a year, it gets involved
with coin-counting machines only after a complaint,
Carroll said.

Coinstar's Avila defended the coin-counting and
maintenance record of the machines. "They're 99.99
percent accurate, but they are a machine," she said in
an interview, comparing the occasional malfunction to
an ATM that spits out an extra $20. Avila said the
machines are calibrated monthly, but high volume or
foreign objects can throw off a particular machine.
Coinstar has 9,100 such machines nationwide, 141 of
them in the Boston area.

If customers' coins have been incorrectly counted, for
either a donation or for usable cash back, Avila said
they can call Coinstar at 1-800-928-CASH to resolve
the issue.

But that suggests customers need to count their change
before they put it through the change-counting
machine, which most people don't think to do.

The other night in Quincy, after the end of their
shift as waitresses at Bickford's Restaurant in
Brockton, Cheryl Richard and her daughter Renee
emptied the day's worth of tips in change into a
Coinstar machine without counting it first.

"We actually do depend on the machine," said Richard,
who was willing to pay the 8.9 percent fee to turn the
coins into usable cash, even though "it's a little

For Richard, the Coinstar machine counted about $15
worth of change, but it's anyone's guess if that's
exact change or not.

Twice the bad news

Now is the time of year when mutual-fund families
calculate their year-end capital gains distributions.

It's also when some investors get the bad news that
while their fund lost money, they're still going to
have to pay taxes on it.

This double hit results from fund managers selling
some of the stocks they've owned for a long time at a
profit - which then has to be passed along to
individual investors as capital gains distributions -
even as the fund overall loses money for the year.

So which are some of the funds that may be hitting
owners of mutual funds in taxable accounts with doubly
bad news?

Here's a sample from Fidelity: Capital Appreciation
lost about 12 percent year-to-date, but will be
distributing an estimated 40 cents a share in capital
gain; Equity-Income II lost about 10 percent, but will
be distributing about $1 a share in capital gain.

And a sample from Vanguard: Capital Opportunity lost
about 16 percent year-to-date, but will be
distributing an estimated 66 cents a share in capital
gain; Windsor lost about 1.5 percent, but will be
distributing about 32 cents a share in capital gain.