Originally published at: https://boingboing.net/2020/09/17/chuck-e-cheese-seeks-to-destr.html
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Why not change the format of prize tickets and not accept the old ones?
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That’s enough tickets to buy 45 koosh balls.
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They could do that too, but this is about new tickets they printed but don’t want to use. They are a physical item and considered and asset under bankruptcy. Rather than continue to pay to store them as well as risk someone stealing them to sell or use, they are asking permission from the courts to destroy them.
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First, I had to read this store 3 times because it felt like a fever dream.
Second. it reminds me a lot about this episode of Slate’s business news podcast about credit card points.
I am an owner of Chuck E. Cheese prize tickets, I hope this puts me on par with bondholders when they are dissolved. I want to be paid in Tootsie Rolls and plastic whistles.
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Yeah, what is the current Chuck E. Cheese prize ticket to Bitcoin exchange rate? CECZ-BTC (And what does the “E.” in Chuck E. Cheese stand for?? (i’m afraid that some folks, mostly with gold chains about their necks, insist that it stands for Entertainment))
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Further to Dioptase1’s reply:
For the future they’re dispensing with tickets completely:
Chuck E. Cheese is also moving to introduce electronic prize tickets as it rolls out contactless operations at its 612 locations amid the pandemic, the chain said.
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I don’t think so.
Mountain Equipment Coop here in Canada announced this week that they were in big trouble (I think it’s bankruptcy, but the word isn’t being used) and sold to a US firm that buys up other companies.
I’ve been a member since 1981, paid $5 that year, millions have done the same thing.
Obviously this is desperation, but it’s hard to grasp because normally it couldn’t be sold. I’ve voted in the AGM for at least 20 years.
And members haven’t yet been notified directly.
So having prize tickets will likely get you no further.
What I don’t get is if Chuck is bankrupt, where will these not yet stolen tickets be used?
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If they were to sell the rights to the brand name as well as the tickets (perhaps to two different groups of people) would the new owners be required to accept the tickets if they kept open or reopened a Chuck E. Cheese restaurant? Even if they wouldn’t be legally required to do so, how much time (money) would they waste arguing about it with irate people trying to cash in a large number of those old tickets?
Now if they were to stamp a small number of these tickets VOID and sell them as memorabilia (maybe with a “certificate of authenticity signed by Chuck himself” for an extra couple bucks) they might be able to raise a little bit of cash and the VOID stamp might forestall some of the arguments. But they wouldn’t be able to sell seven billion of them as mementos.
So…each ticket is worth about 1/10th of a cent? Seems kind of high compared to the “prizes” I’ve seen 
Also, why do they have 7 billion of these tickets? How many did they used to go through that they bought them in lots of over a billion at a time? So damn wasteful 
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The MEC is in trouble? That stinks, I visit them every time I visit Canada, and often purchase for friends in Canada. I love their gear.
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Ignoring for a moment whether the tickets are debt or not:
From what I know of bankruptcy, the debtor is supposed to list all known holders of debt so they can be notified. If they don’t know someone holds the debt, they can’t list or notify. At best, there is a public notice.
Once notified, the debt holder has to file a form with the court that they hold X amount of debt. No filing can mean giving up your claim. But don’t file as a joke or make up a dollar amount. It’s filed under penalty of perjury and penalty can be $500,000.
In the end, at best you will get cents on the dollar. Probably not worth the stamp to even send in the claim.
I don’t have a Chucky ticket near me, but my guess is that they have some tiny print somewhere stating that the tickets have no cash value. Instead, they probably hold them in an asset account or expense them as a consumable, and list the prizes in both assets and liabilities until liquidated, the total value of the prizes being the estimated outstanding tickets that will ever be redeemed.
They have no obligation to redeem the tickets: they could “devalue” them if they wanted to (like a zimbabwean dollar, now it takes 100,000 ticket points to get an oversized laffy taffy), or they could dispense with prize redemption totally, though this would impact the number of customers who return to their venues.
Quite frankly, I think they are making a mistake going to an electronic ticket redemption model. The number of never-to-be-redeemed tickets is probably high, my WAG is 10%. Add to that the smaller percentage of un-redeemable tickets (that the machines just won’t process, and too few for customers to make a stink about), and you get a situation like the post office and collectable stamps: free operating cash. Once they store it electronically, their obligation to redeem the points will be, in theory, forever. If they institute a policy of points expiring, they will lose a portion of their existing customer base, same as if they drop prizes entirely.
As for how many tickets 7 billion represents, I estimate 3 - 5 years worth: 7,000,000,000 / 10,000 tickets/day/store / 600 stores / 365 day = 3.19 Year. 10,000 tix/day is probably very conservative, but I figure weeknights and holidays will be slower than weekends, so a substantially lower number for estimates, but it could be up to 100,000 or more a day.
This is all a long winded way of saying: I don’t think holding a chucky ticket makes you a creditor in any form, so they won’t have to worry about filings or perjury. If bankruptcy court (or some class action lawsuit) were to decide otherwise, the settlement would probably be to bring your tickets to a venue for a pittance, to be paid out immediately, up to a fixed date.
I’ve now spent entirely too much time thinking about this. I need to take my bunnies for a walk or something. 
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Instead of destroying them, could I buy them to fill my underground vault and then dive into them ala Scrooge McDuck?
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You could just buy all the crappy prizes to do that…might be a softer, too, than rolls and rolls of prize tickets…well, if the prizes are plushies.
Yeah, that’s why I totally avoided wondering if they are a debt or not. I tend to agree with you, but life were logical, would we have lawyers?
I think going to electronic is a different mistake. A lot of the fun is the tickets themselves. Seeing them pop out, trying to pull out an extra, collecting them, showing them off, making deals with friends, giving them to little kids. In this case, logical means less fun.
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I hadn’t thought of that, but you’re totally right! Seeing those things spew out of the machine and collect into a hefty pile is a joy in itself!
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True, Starbucks loves that interest free financing!
But Starbucks is also a different business model than Chuck-E-Cheese. The game/ticket model Chuck-E-Cheese is using is to get clients to pay for games by incentivizing them to redeem tickets for prizes significantly less valuable than the cost per game. The tickets can’t be used to buy the food or drinks (or birthday party favors), which are bought with cash.
Starbucks is a straight up retail store, so their risk is really that we store a bunch of money and redeem at a time when the goods they sell cost them more than the value on the card. The only time this is a real risk is during a time of deflation, when they can only offload the coffee they bought at $3340/ton for $3300/ton, which is unlikely to happen unless they start selling coffee at $1.65/pound.
This is more of a risk for CEC, as 100 tickets at $0.25/game can appreciate in value when games are $0.50/game; unless CEC devalues their tickets. Like the post office, you make off like a bandit if you buy 1000 forever stamps at $0.45 each then use when first class postage is $0.55 or more. You’re basically getting a discount on USPS service, though depending on what you could have earned by investing that money, it may not be that great of a deal.
Those bunnies really, really need a walk! 
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