A small group of Tennessee Lottery retailers were not informed they'd have to pay a weekly $15 service charge, and some in Knox County aren't happy about it.
"It was never mentioned up front," said Steve Rogers, owner of the Phillips 66 station on Tazewell Pike, which is among stores paying the charge because they sell less than $10,000 per week in lottery tickets.
"If I did business like that with my customers, I wouldn't stay in business long."
Rogers said he went to a lottery machine training session before the lottery started in January and asked if there were any extra charges. He said he was told there weren't.
The fee pays for "certain administrative costs," Tennessee Lottery spokeswoman Kym Gerlock said, and was made known in the retailer rules before the lottery started. She said it also was supposed to be discussed at training programs, but the training-group disclosures didn't happen with a "small group" of retailers.
"We've received a few complaints," she said, but "just in case there was any confusion or misunderstanding about it" the lottery is crediting back service fees to each retailer's account and is waiving the fee until early March.
Rogers still isn't satisfied.
"I just don't think they should implement that," he said. "A lot of it's the principle of the thing. I just think it's bad business."
He said he averages about $2,500 in tickets he activates per week.
"Why would they put a $10,000-a-week quota on us anyway?" he asked.
Gerlock said the quota is "an incentive."
She said she didn't know how many stores would be able to meet the weekly quota.
Rogers said, "I think they put the $10,000 quota on you because they know you can't do it, that the majority of the stores can't do that."
Gerlock said the lottery isn't trying to hurt retailers.
"We would not have set that kind of quota if we (didn't think) anybody could meet that," she said. "Our success is a successful, strong retail network. Any type of policy we set is certainly with everyone's best interest in mind."
Rogers said he would have entered into the lottery business even if he'd known about the charge up front, and he will continue selling tickets when the charge is reinstated.
"I've already got money invested in this thing," he said. "Your customers now expect you to have it."
He said he had to install a dedicated power supply for the lottery machine in his store, buy new filing cabinets, pay the one-time $95 application fee as well as $12 per month for a separate lottery bank account.
He's also had to hire another employee.
These factors and the $60 per month in service fees eat into the roughly $200 per week his store earns in lottery commissions.
Plus, his store lost some customers during the early days of the lottery because it wasn't prepared for the demand and some people didn't want to wait in the lines that were created.
"So really you're going in the hole," Rogers said. "It's just another product. It's not going to make you rich."
$10,000 a week in sales to avoid service charges? Wow, Virginia online retailers are only required to sell $600 per terminal to avoid extra charges (though all do pay a $15 charge weekly for the data line). Instant only retailers pay no extra charges at all.
$10,000 a week in sales to avoid service charges? Wow, Virginia online retailers are only required to sell $600 per terminal to avoid extra charges (though all do pay a $15 charge weekly for the data line). Instant only retailers pay no extra charges at all.