Now everyone knows what an illegal vending machine looks like I want to provide you with the actual legal verbiage to back it up. First I want you to know that I have had a friend tell me that when you ad dollar to the prize that it is a bonus prize. For example he would have a pile of stickers from his sticker machines that would not sell. He created a display that had various stickers and tattoos on them along with the photo of a $1 dollar bill and a $5 dollar bill.
Next he would place a $1 dollar bill in with the sticker that would vend first. He says when they win a dollar on the first try they know that there is real money in there. He would place another dollar a little ways up and then he would place the $5 dollar bill in the middle of the stack and then another $1 dollar bill at the top of the stack.
I do not know how many of you have seen the inside of a sticker machine but they hold nearly a box of stickers at a time if you fill it up that much. He would empty the stack every single time he set machines up like this. His crappy stickers and tattoos are still today his best selling item when they are setup in this fashion.
The problem is that he is too stubborn to change his ways. This works for him and he makes money and that seems to be the underlining factor. I beg all of you not to be so stubborn and it will protect you and your assets as you accumulate them from your vending machine business.
Whether you have spiral gumball machines with a few capsules that have a small piece of gum with $5, $10, $20 dollar bills wrapped around them they are still bad news and could ruin your source of revenue.
Now to the law as it pertains to those of you with me in California.
Bureau Of Gambling Control – Number 10 Law Enforcement Advisory
Illegal Gambling Devices
California’s gambling device statutes are broad in their coverage and prohibit any person from owning, renting, or possessing illegal gambling devices. (Penal Code, 330a, 330b, 330.1.) An illegal gambling device has three features:
- It is a machine, apparatus, or device (Coin operation is not required);
- Something of value is given to play the device
- The player has the opportunity to receive something of value be any element of hazard or chance (“something of value “ is not limited to coins, bills, or tokens, gift cards, game credits, or anything else with a value, monetary or otherwise.) (Penal Code, 330a, 330b (d). )
In addition, if a device can readily be converted to have the features of an illegal gambling device, (as listed in 1, 2, and 3 above), it is an illegal device. (Penal Code, 330b (d). )
As an additional example, a coin pusher is an illegal gambling device, whether or not it purports to have an element of skill, because the player can win coins by playing.
There is a very big Southern California crane machine operator that has dozens and dozens of crane machines like the machine we took a picture of. He convinces his locations with a piece of paper that he has on the side of the machine that it is a game of skill and not chance and is therefore exempt from the California Bureau of Gambling Control. One day he and his location owners may regret treading down that path.
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Don’t be stingy! I am not here to preach a sermon about how you can donate more to your church. We are talking vending machines here. How can we be more generous in our vending machines? I’m always surprised when I buy a used machine and find it set for the smallest vend possible! Are you kidding me? How do you expect that to work out for you?
Do people really think they are going to increase profit by setting their machine to vend 4 peanut M&Ms? You may be able to increase your profit margins a little however at the cost of what? The amount of product volume you move? Moving high volumes of product is vital to making larger sums of money in the vending machine world. How much repeat business do you believe will that bring? I will assure it will not bring you as much business as being generous with your vends in each of your vending machines.
How many people have been on location loading toys or gumballs and see that kid walk in who has been wanting that toy or a particular gumball. This is another opportunity to be generous. Kids score when they find me on location servicing equipment. Many people take the opportunity to make a sale and say, “hey kid its .25 cents. I suggest to you that this is the wrong approach to take and this is why. When you give a kid the toy he has tried for with the money he has earned doing his chores what do you think that kid is going to do? When he gets home he is going to run out side with that toy and tell all his friends, “hey I saw the vending machine guy servicing the vending machine and he gave me a handful of gumballs and a toy I have been wanting.” What do you think is going to happen next to those groups of kids? They are going to drop everything and they are going to come running to the machine to see if they can catch me there handing out free stuff. By the time they get there I am always long gone and they are left looking at all the new products I just stocked the machine with and that they will want. This will make you more money. Everyone wants an opportunity to get something for free. I love getting free stuff. So do your customers. Be generous to them when you run into them on location. Parents will feel obligated about giving their son or daughter money the next time they pass by the machine. Trust me.
As we all know a successful location depends on regular customers as well as high foot traffic. I almost always run into someone when I am servicing my route who is happy to tell me “HEY, I hit this machine like three times a week.” Open that hopper all the way, it will pay off in higher volume which to me is more important than an extra profit of 2 or 3 cents per vend. Just try this, put 7 peanut M&M”S in one hand and 4 in the other. There is a BIG difference. Don’t let someone walk away from one of your machines feeling cheated, they may never come back.