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June 2015

Frank SeninskyFrank Talk

Five Important Lessons About Redemption Prizes

 redemption prize center is the eye candy that initially captures the attention of our guests just like a magnet attracts iron. The prizes are the catalyst that creates a desire to play the games and accumulate tickets/points.

Here are the top five lessons I have learned on this important aspect of how prizes and their display contribute to a top quality games operation:

1. Line of sight to redemption prize center (RPC). Most people will enter your facility and take about three steps and stop and look around counterclockwise from right to left. If possible, you want them to have a direct line of site to the RPC (and, of course, to the games). To make sure that their eyes do not wander above the RPC, it should have a top soffit section display with great signage. The front display cases should be well lit and have modern acrylic clear prize bins. The back slat wall displays also should be well lit. Large, professional looking point signs (yellow background with black numbers is the best color combination for the eyes to see; that is why road warning signs use this color combination) need to be located above, below, or on every prize item. Location consistency of the point signs is important so the customer’s brain automatically learns where to look and registers how many points an item is worth.

2. Purchasing the prizes. The challenge is to look for the prizes that your customers want that have a high perceived value as compared to the wholesale price you pay for them. The goal is to strive to reach an average 4:1 ratio (perceived value is 4 times your cost). A 4:1 ratio is attainable for the low end and some of the middle range cost items (a 3:1 ratio is also good for other middle range prizes) but is impossible for the higher cost items that retailers sell for 5%-10% over their cost. Thankfully you will not need large quantities of high priced prizes, so with a little knowledge you will be able to have an average 25% cost of sales each week and your customers will see this as fair.

Understand that Mom, with her computer brain, can easily determine the difference between money spent and the value of the prizes redeemed. For example, her two children just spent $20 playing redemption games. She can add up the total perceived value of all of the prizes they redeemed. Hopefully she will come up with an amount within a few dollars of the $20 spent and will be pleased. If she feels ripped off, she will tell at least 20 other people and each of those 20 will tell 20 more. That is how it worked in the old days before Facebook and social media. The lesson here is to make sure that you do not get greedy and mark up the redemption prize points to lower your overall prize costs.

Take advantage of purchasing low- and middle-range prizes at “case price” and negotiate a “take back for full credit” any prizes that your supplier recommends as “hot” that do not move. Always look for closeouts that will be desired in your market. The key with closeouts is to pass the savings on to your customers to encourage additional spending per visit and drive more repeat business. Take advantage of all new movie releases where our industry prize suppliers have movie tie-in merchandise available prior to the movie release date (licensed quality merchandise is recommended). Make sure you have desirable prizes for every age and gender segment of your customer base.

3. Displaying the prizes. Due to their height, young children focus on the front display cases and adults focus on the back slat wall prizes. The low point smaller prizes and lower end of the middle range prizes (prizes that are purchased from 1 cent to $3.00) should be placed in the front display cases.

Be careful not to have too many choices for the low point prizes in the 1-25 point range (known as “slum”) to avoid having so many choices that each child takes too long to make their decisions and the guest line becomes too long.

Guests should be encouraged to queue up from right to left with the prizes point bins increasing in points from right to left in ranges of 5-point increases (round up or down consistently) until reaching 40 points and then increasing in 10 point and then 25 point jumps. For example: 3, 5, 5, 10, 10, 15, 15, 20, 20, 20, 25, 25, 25, 30, 30, 35, 40, 40, 50, 50, 60, 70, 80, 90, 100, 100, 100, 125, 130, 140, 150, 175, 175, 200, 200, 225, 250. As you move into the higher point numbers, it is okay to have numbers such as 665 or 1630, but stay consistent and round up or down to the nearest 5 points. Note that in some cases, the location and shape of the RPC require that the low point prizes start on the left and increase going right.
The number of different point values you have will depend on the length of your display cases and the ticket value formula you choose. Several of the same point value prizes (even if different sizes) can creatively be placed together on one section of a middle shelf or bottom section with multiples of each prize stored and easily accessed in the back cabinet section. The displayed prize grouping remains intact and makes it easier to restock the prize bins and slat wall prizes at the end of each day or start of the next day so that the RPC always looks fully stocked.

Additional middle-range point prizes and high-end point prizes are displayed on the back wall using standard slat wall mounting bracket hardware that is properly sized for the slot spacing of your slat wall (usually 3 inch). There should be a nice selection of middle-range prizes ranging from purchase costs of $3 to $15 and a smaller amount of higher end prizes. Some choose to keep the highest-point prizes near the top of the slat wall and others choose a layout that has increased points running left to right or right to left. Others mix it up and just concentrate on having an appealing and balanced back wall display.

4. What to do with prizes that are not moving. High-end prizes may not be redeemed for many weeks, but the low- and middle-range point prizes should all be popular when you order them. The last thing you want is for prizes to gather dust whether located in the RPC or in the storeroom. If a new hot prize recommended by your supplier is not initially moving (unless it was a closeout) the first option is to have them take it back.

Other options include: a) combining (tying together) two prizes and reducing the total point value and placing it in a special section of the RPC; b) making up a dozen mystery bags for boys and girls, for a reasonable amount of points that is much lower than the total points of the items included; c) making up mystery party goodie bags with several prizes that can be marketed as having a $5 value for each party child. Ten goodie bags, worth a total of $50 or more could be used as a deal closer or added bonus for a slow party booking week in the future; d) as a last resort, the point value can be reduced just like a blow out sale in a retail store and marketed as such.

5. What are the hottest prizes? Searching the Internet for the current hottest retail toys and trends is always a good starting point. The New York Toy Fair lists the top selling categories broken down into children, family, boys, girls, etc. Spend a couple of hours every few months at Toys R Us and keep a list of the items and prices that customers are buying at checkout. Get your staff involved. Each of them most likely has a family member who watches Saturday morning cartoon shows with their children and other children’s TV programs. Have them make a list of the items that are heavily advertised. Visit your local Apple and Verizon stores and learn about all of the electronic accessories that are on the market. Make sure you have a section of your RPC display case that has several of the most popular electronic accessories. Most of our industry merchandise suppliers carry these electronic items and accessories at wholesale cost. Never forget that every industry supplier knows what their hottest prizes are, but they also need to sell all of their other items as well to stay in business. Remember the old slogan of Sims: “An educated consumer is our best customer.” The best sales people will say when they don’t carry an item you tell them you want, and will refer you to another source instead of giving you reasons why that item isn’t right for you.

Every few months our Redemption & FEC Report e-newsletter (subscription is free) lists the hottest redemption and merchandise dispensing prizes used in Alpha-Omega Amusements operations. In the box below is the current list of top merchandiser prizes that was published in the March-April edition. Some can also be used in your RPC.

For more information email me at fseninsky@aol.com. I make it a point to respond to all emails. Additional articles can be found in the articles section of www.AEMLLC.com.


Prize -- Average Cost
Pop Vinyl -- $9.00
Minions 6.5” -- $2.75
Minions 9.5” -- $5.00
Beanie Balls -- $5.00
Pudge Penguins M&D -- $4.80
Home Plush -- $4.80
Eastern M&Ms -- $3.00
Angry Birds 5” -- $4.00
Big Hero -- $3.60
Christmas Donut -- $3.00
Smurf 12.5” -- $4.50
Clown Fish -- $1.23
Hermit Crab 8” -- $2.75
Whimsy Bears -- $4.00
Stingrays -- $4.00
Animal Blanket Babies 10” -- $2.75
Pac-Man -- $3.33
Bright Eye Collection -- $3.00
Christmas in July -- $2.75
Scooby Doo -- $7.75
TY Beanie Balls -- $5.00
Pacman Watches -- $9.00
Wii U -- $300.00
Head Phones -- $10.00
Pacman Head Phones -- $24.00
X Box One -- $400.00
PS4 -- $400.00
IPAD Air 2 -- $450.00
Nintendo 2DS w/game -- $150.00
Nintendo 3DSXL -- $150.00
Kindle HD7 -- $150.00

Frank Seninsky is president of Alpha-Omega Group of companies, which includes a consulting agency, Amusement Entertainment Management (AEM), and a nationwide revenue sharing equipment provider, Alpha-BET Entertainment; all are headquartered in East Brunswick, New Jersey. Along with industry consultant Randy White, Seninsky also heads up Foundations Entertainment University. During his 41 years in coin-op, Seninsky has presented nearly 250 seminars and penned more than 1,000 articles. He has served as president of the Amusement and Music Operators Association from 1999-2000 and is a past chairman of the International Association for the Leisure & Entertainment Industry. Seninsky can be reached at 732/254-3773 or by email at fseninsky@aol.com and www.AEMLLC.com.


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