If you’re like most IU students (including myself), the first thing that passed through your mind when you learned of the new
“I-Bucks” meal plan (that is, if you’ve even heard about it yet) was probably something along the lines of “I-Bucks? What the hell?”
Students have a new kind of meal point next year: the I-Buck
As a student I was quite concerned with the new idea, the motives behind it, and how it would affect the already shallow pockets of IU students.
Fortunately I was able to talk to the creator of the plan, business consultant and RPS training coordinator Errol A. Huffman, who basically said 'Think again' to the notion that the I-Bucks strategy wasn't useful or necessary. In fact, he emphasized that the plan is being implemented nothing more than the students in mind (More from Huffman below).
If you haven’t heard yet, the I-Bucks plan was passed in April and will go into effect this fall. It will replace the traditional meal point plan that IU students have used in the past.
The I-Buck plan features two plans, the
Cream plan, which contains four separate sub-plans of varying sizes and the
Crimson plan (full break-downs can be found below).
The whole plan is fairly confusing at first glance, and involves taking a fixed proportion of each plan’s cost and allocating it toward administration costs, and then offsetting the decreased quantity of points with a discount at all RPS venues.
For example, the Standard Cream Plan costs $2,800, and the student receives 1,120 I-Bucks with a 60% discount. That equals 2.50 I-Bucks per dollar, and the discount cancels out the administrative costs. Say an item costs $10.00. With normal meal points, it would cost $10.00. With I-Bucks, it would cost 4.00 I-Bucks. That also equals 2.50 I-Bucks per dollar.
With the larger Plus and Max Cream plans, the benefits per dollar are even greater. In addition, meal points/I-Bucks will now roll over to the next year for a certain amount of time, and students are really getting the hook-up this year, as each meal point is being directly converted into the much more valuable I-Buck.
Now that you have all this information, the next question that should come to mind is “Why?” Here’s what Huffman, had to say about how the plan helps students and why on earth such a complicated plan was formed.
The traditional meal point plan has been around for awhile. What spurred the change to the I-Buck plan?
The I-Buck transition accomplishes a couple of things:
1. RPS can pass along savings to meal plan holders as the scope and volume of meals served increases. That means, beyond the base plan levels (Cream Standard, Cream Mini, and Crimson), we are charging plan holders only for their food cost. Obviously there are fixed costs with any business. The total cost of an item is on the menu board in the form of a retail price. Through economy of scale and increased efficiency, we are able to determine what the fixed costs are, assign them up front, and pass extended savings on to students.
2. The plan positions RPS to better serve the campus as other opportunities present themselves. Examples of the opportunities include the campus kiosks operated by RPS (Library, SPEA, Jordan Hall, SRSC, Music School, etc.). More off-campus students are taking advantage of the value and convenience. This means everyone can pay less in the long run and we can keep costs down.
How exactly does this benefit the student population? Won't students just be able to get the exact same products for an equivalent amount of money with the 60% or 25% discount? How does this increase purchasing power?
I believe I touched on this a bit in the previous answer. On the surface, students will have the same buying power with the base plans. To illustrate the enhancement, look at the Cream Max plan: the plan costs $3,600 for 1,920 I-Bucks. If you apply the 60% discount (or use a conversion of 1 I-Buck = $2.50), the 1,920 I-Bucks will equate to $4,800 of retail pricing.
That is a real dollar value increase of $1,200 over past practice. Again, we are relying on an increase in volume, already evident in the last two years, and participation by the entire student-body to help keep costs down for everybody.
What benefit does the university receive from having the administrative costs up front, in a way? Was this one of the main reasons for the new plan?
There are no real benefits to IU or RPS to separate the costs. We still price items on a traditional retail model. We will still reimburse our operating units for the total retail value of sales. What we will see is, as use of the program increases, a flattening of some of the variable costs (labor) and a decrease as a percentage of sales in other fixed costs.
Another way of putting it is that we can only have so many employees working at one time, maintenance costs will remain at relatively the same rates, and cleaning expenses will remain roughly the same (the total dollar cost won't increase even as sales go up).
Running this program will actually be more difficult for RPS and IU but it is the only way to pass on volume savings to plan holders while making sure other guests, visitors, and sporadic users make their fair contribution to the cost of doing business.
Do you think this extra conversion could complicate things for
students who are trying to budget their meal plans?
We hope not but the reality is that this is a significant change. We will continue to provide and develop additional materials to help students better understand how to budget their I-Bucks.
We have an on-line Meal Plan Engine slated to go live by Fall Semester. The engine will not only let plan holders see their current balance of I-Bucks but it will also give them information about how those I-Bucks should be budgeted. We will have graphs that show the individual where they stand in usage: are they spending too much, too little, how much should they be using daily, etc.
We will also change a practice for the first couple of weeks or so and print receipts for all transactions (students can get those on demand now). The receipts will help a student see what a typical purchase looks like after using I-Bucks and it will have the current I-Buck balance as well.
The roll-over is a huge plus, but how will the system distinguish
between traditional meal points, Cream plan I-Bucks, and Crimson Plan I-Bucks if students change plans from year to year?
All current roll-over meal points will be I-Bucks so there will be no difference. As an act of good faith on our part, we are not "converting" or adjusting the balances. Basically, roll-over balances will have 100% buying power without any overhead cost.
We anticipate that this will cost us a lot of money and hurt our bottom line; however, students are our first priority and we felt that students should not have to pay anything else for this transition. The process is truly a gift from RPS to all of the students who still have a roll-over balance.
What else, if anything, is the RPS looking to improve upon or change
in the near future?
We are always looking at areas for improvement and have identified a lot of enhancements for the future. Dining will implement an on-line food ordering system this Fall. The choices will be limited initially but we plan to expand offerings as we field the system and work out any possible bugs. Ambrosia Catering will probably be the first area that is featured (gift baskets, big cookies, cakes, grab-n-go lunch boxes, etc.).
I-Bucks or credit card will be accepted once we open the portal up. Of course RPS is moving forward with plans for the new town house complex that will be built on the former Ashton Center site and we have a few other proposals that we are working on and hope to take to the administration in the coming months and years.
Related links:
IU-RPS - Cream and Crimson Meal Plans
IDS: RPS passes I-Bucks for fall
IDS: I-What?
Tables courtesy of RPS; Photo courtesy of IU Home Pages
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