State Pitches Lottery to Sellers : Merchants Urged to Take Advantage of Impulse Buying

Merchants gathered in San Fernando were told Wednesday that the moment to make a sales pitch for state lottery tickets is when customers reach for their wallets to buy a gallon of milk or a quart of vodka.

“It’s an impulse sale,” Paul Nochenson, the lottery’s district sales manager for the San Fernando and Santa Clarita valleys, told about 120 business people, many of them grocery and liquor store owners. “When you take their money at the register, ask them if they’ve bought a lottery ticket today. Train your people to ask that question.”

Nochenson led two 40-minute training programs in the council chambers at San Fernando City Hall in preparation for the late September or early October start of the California State Lottery. State officials are counting on the lottery to raise millions of dollars annually to improve public education.

Officials expect to train up to 5,000 store owners and employees in sessions planned for the San Fernando Valley. Similar sessions are being held around the state for other lottery districts.

Programs will be held daily at San Fernando City Hall through Sept. 13 and at Los Angeles Valley College in Van Nuys next Tuesday and Wednesday for the approximately 2,000 businesses licensed to sell tickets in the lottery district encompassing the San Fernando and Santa Clarita valleys, Hollywood, Eagle Rock and Silver Lake, Nochenson said.

Exhortations, Admonitions

Wednesday’s presentation was marked by exhortations of the lottery’s potential profitability for merchants as well as admonitions to obey the state lottery law.

Nochenson told merchants that the state has no accurate estimate on how quickly the tickets will sell, particularly during the first week.

But, he predicted, “They’re going to be lined up around the block. You’re going to be busy, that’s all I can say.”

Nochenson said businesses which sell tickets that produce big winnings will reap large benefits themselves through publicity and boosted merchandise sales.

“People run to a place where there’s a big winner,” Nochenson said, describing the experience of other state lotteries. “They will think it’s a hot location. It’ll be a lot of free advertising for you.”

Nickel Margin Per $1 Ticket

The lottery official predicted that ticket sellers will benefit from increased foot traffic in their stores, in addition to the nickel margin they receive from the sale of every $1 ticket. Moreover, merchants will be allowed to keep unclaimed winnings from tickets revealing $2 and $5 prizes. An estimated 2% to 3% of such tickets, which merchants will pay to winners on the spot, probably will not be claimed, Nochenson said.

Those attending Wednesday’s meetings said they thought that the orientation session left them well-grounded in the lottery’s operation.

“It sounds like there’s a little more paper work than I expected,” said Shirlee Weisz, co-owner with her husband, Norman, of the Hub Mart in Los Feliz. The couple said they may order as many as 20,000 tickets for the first week of the lottery.

“I think it will be terrific for the state and the stores,” she said.

State Has ‘Its Act Together’

“We already have people asking about it,” said Rick Esse, an assistant manager at the Cap N’ Cork Jr. Market, a Hollywood-area liquor store. “The state seems to have its act together.”

Spiced amid the sales pep talk were several warnings to merchants about the lottery.

“If they’re not cooperative and obeying the rules and regulations, they’re not going to be here,” Nochenson declared.

Among the lottery regulations are those requiring that tickets:

Not be discounted in price, even though they may be given away as part of promotions.

Be stamped with the seller’s name and address.

Be sold sequentially in the books of 500 tickets.

Be reported to lottery and law enforcement officials immediately if they are lost or stolen.

Not be sold to anyone under the age of 18.

Not be sold until the official start of the first lottery game, a date as yet undetermined.

Nochenson also told the business people that they are expected to generate sufficient sales of the lottery tickets.

“If your store doesn’t do enough business,” he told one merchant who asked whether licensed ticket sellers were on a probationary status, “we’ll probably look for another location in your area.”

Lottery representatives will visit all licensed sellers weekly to ensure that signs advertising lottery sales are displayed prominently and to assist merchants in marketing their tickets, Nochenson said.