Redemption Merchandise

Although redemption is sometimes described as “entertainment shopping,” the arts of merchandise selection and display for redemption centers represent very different disciplines than stocking the shelves of a retail store.

So said Karyn Gitler, director of merchandise for CEC Entertainment Concepts, owner of the Chuck E. Cheese’s chain. A past director of the International Association for the Leisure and Entertainment Industry, Gitler is responsible for the design and procurement of redemption prizes, other merchandise and birthday supplies for more than 400 locations.

Successful selection and display of redemption merchandise begins by understanding how the relationship between customers and merchandise in a family entertainment center is unique, Gitler said. Retail stores are usually patronized by adults or teens, while the main customers for many redemption centers are children – who, as customers, have a different agenda and dynamic.

According to Gitler, adults often enter a retail store wanting to find their items, purchase them and leave as quickly as possible. Meanwhile, focus groups conducted by CEC note that parents often complain about the length of time it takes their children to select a redemption item.

Gitler said this “lingering” process is one of the most enjoyable parts of the redemption experience for children. When a machine awards tickets to a child, she said, the device is putting rare purchasing power into that child’s hand and conferring a visible symbol of achievement upon the child. Accordingly, many children often enjoy slowly counting and holding onto their tickets for some time before spending them because they are savoring their purchase power.

Responding to parents’ complaints, CEC has tried various strategies to reduce children’s prize-selection time. However, Gitler said, even installing the most efficient and attractive ticket eaters and weighing stations will ultimately have little effect.

“The important thing to remember is that’s why we’re all in business,” she said. “That child comes back because they want to feel that power again.”

When selecting redemption merchandise – particularly for young children – Gitler strongly advised operators to “put yourself into the mind of a child.” Items that strike adults as “gross,” “too sticky” or (in the case of candy) sour tasting are precisely those that appeal most to very young children, she said.

Many redemption operators make the mistake of purchasing books as redemption merchandise, knowing that parents are more likely to approve. But when children walk up to a redemption counter, they don’t want to buy something educational, said Gitler – not even a book with a tie-in to that summer’s hot movie.

In fact, she said, children particularly enjoy selecting items that their parents would not have chosen for them, sometimes in direct contradiction to the strong suggestions of parents who are standing right beside them at the prize counter.

Again, this process represents a rare opportunity for children to control purchasing decisions, Gitler said. In a toy store, parents often overrule a child’s wishes since they are holding the pocketbook.

Gitler also noted that because children are not all alike, their tastes in prizes should not be stereotyped. Whereas a five- or six-year-old boy typically hates Barney (the friendly purple dinosaur on PBS), many two- and three-year-old children love the character. Quite a few adults may also feel great distaste for Barney, Gitler added, “but as a redemption buyer, you can’t buy what you love; you have to buy what sells.”

Another key difference between retail-store merchandise and redemption-counter merchandise, said Gitler, is that trends can last longer for redemption. Older characters whose TV shows and movies have come and gone may no longer be hot retail store sellers, but redemption prizes based on them may have a longer shelf life, she explained.

“I would not go knee-deep into buying [previously] trendy items,” she said, but products that reflect recently passed trends should definitely be considered and possibly purchased (in judicious quantities).

The reason trends last longer in redemption centers than in retail, Gitler said, is that many parents who take their offspring to a Toys “R” Us may typically say: “You have the PoweRpuff Girls already; I’m not buying you any more of them.”

However, children often retain fondness for previously hot characters and may still desire to expand upon their collections. With tickets in hand, a child has the power to do so despite the parents’ views.

To get the best deals on prizes, redemption operators should build a relationship with a sales staffer from a trusted merchandise supplier who will keep them informed of what trends are hot and what items are on sale or closing out, Gitler said. Operators should also attend at least one redemption-merchandise, toy, party or gift show per year, she said.

Owners of large centers may find it worthwhile to attend one or more of several close-out shows that are held annually in Las Vegas, New York, Los Angeles, Chicago and Orlando, Gitler said. These events can help redemption operators learn about merchandise trends and upcoming products.

Gitler advised that slow- or non-moving items in a redemption center should go “on sale” by being offered for reduced ticket values. Moving less-popular items around the center or within the display case can also help draw attention to them, she said.

Seasonal merchandise should be purchased six weeks before a particular holiday, in quantities that experience with that specific FEC’s clientele has demonstrated will move quickly. “Get in and get out, and always buy short,” said Gitler. “You don’t want to hold inventory; that’s holding money.”

The Internet is a powerful tool that redemption operators should take full advantage of when searching for and purchasing prize merchandise, Gitler said. This means not just checking online catalogs and browsing email-based special offers, but also sourcing sports memorabilia and other goods from eBay and other online suppliers and brokers.

Negotiating for better prices with redemption merchandise suppliers is not restricted to owners of large FEC chains, Gitler said. Mom-and-pop operators can negotiate as well. Using multiple shipments to obtain extended terms is a trade-off that operators large and small can take advantage of, she explained.

Free shipping and volume discounts are also negotiable benefits, Gitler said. When free shipping is offered as part of a show special, suppliers will often grant it for purchases made a week after a show – if the operator asks for it.

Price breaks can kick in whenever an operator buys two boxes instead of one, she added. Redemption prize buyers should ask suppliers, “What is my next price break?” as volume ordering increases. Combining volume orders with repeat business can also justify a price break, said Gitler.

For example, an FEC owner might order two boxes of a certain item for immediate shipment, and also sign a purchase order for two more boxes of the same item, to be shipped two months later. This allows the owner to obtain the lower price associated with a four-box purchase.

Long-term staple items such as Whoopee Cushions, sour candy and Magic Ink can safely be stocked in six-month quantities, Gitler said. “Those items will always sell for the life of your facility,” she explained.

Effective display of redemption merchandise can be achieved by creating simple point-of-purchase displays, Gitler said. This technique makes a noticeable impact on the operator’s ability to move merchandise. Grouping similarly themed items together, such as patriotic items (flags, stickers, etc.) or holiday items, increases the visual and emotional impact of the display.