Average gift card has a discount of 8 to 20% built in. Looks like Coinstar is currently charging 12.9%, so a gift card could actually be more profitable for them.

If you're feeding it pennies you can also just give it one penny at a time to avoid the fees.

A credit union local to me waives the fee if you are a member.

Mine had the machines, then ripped them out, over the cost to them the regional bank they deal with imposed and other excuses. Coinstar (some) gift card is the only no-fee I've found in my area, but then you're stuck with a gift card instead of cash.