@dennis63 , just reading you thread here again and something caught my attention; the $1 chips that are redeemable, what exactly does that mean? DOn't get me wrong, I understand what it means to redeem a $1 chip and get $1USD in return, but why is this so? Sorry if I'm missing something obvious, but why do you hold money on deposit? Do you expect po eople to retun them, or is it just an option in case they want to, or ???? I'm very new to chipping but I don't think I've been aware of this being done, whats the end result?
Chips still looking bad ass by the way!!!
Good question, really. In the past few years, we've seen lots of used casino chips hit the market, driving down the price of nice chips. (Fewer collectors, too.) It use to be that a casino chip wasn't real unless it cost at least $1. But not anymore, really. It always bothered me to see a nice casino chip, which use to cost $1, being sold for 89 cents.
Seemingly unrelated to that, I thought about doing a "face value" chip for some time -- one that could be sold and traded and cashed in for its face value. But the cost of the chip was always in the way. Each chip costs $1.71 to make, so I really can't "sell" them for $1.
One day, I was talking to a friend in retail about doing gift cards for the Key West site. It turns out that the cost to make a custom gift card is about the same as making a casino chip. I said, "If I'm going to spend that much for gift cards, I might as well just make gift 'chips.'" Then I realized what I was missing. You don't sell the chip. You loan it out.
Here's what a $1 face-value chip actually does:
1. The $1 face value chip will always be worth $1, because you can cash it back in with my company for $1. So you are not likely to see someone selling off racks of Key West blue $1 chips for 89 cents each.
2. You can also "trade" it with your friends for $1. And by trade I mean legally exchange it over a nice poker table in a state that allows that.
3. I know some people can be reluctant to spend $1.49 (or $1.39 here on PFC) for Key West chips. Throw in a chip that actually sells for $1, and it reduces the overall cost of their set. (If you're getting a 500-chip set, that's $695. If that set has one rack of blue $1 chips, you saved $39. Two racks? $78. So more people buy Key West chips who otherwise might not have.
After people pay $1 for their $1 blue chips, the money goes into a high-yield peer-to-peer lending account. (We also have cash in our business account to immediately pay any requests to cash blue $1 chips.) Right now, we get about 9 1/2 percent on the value of the blue chips in circulation. It's not "casino money," but it will make up the difference between what you pay for the chips and their cost in four years and one month after they were first issued --about two and a half years from now. After that, it's all profit.
So if I say you can cash the blue $1 chip back in, I'm not really "selling" the chip. I'm just loaning it to you. You can keep it for life, if you want. Or you can cash it in. It really makes no difference, as any chips cashed in will be sent out to other players who want blue $1 chips.If it's not cashed in, its value is invested and that chip is making money for the business.
The cost to make the chip is an expense of the business, the $1 you pay for the chip is rental income, and the interest on that $1 is also income.(Casinos make their money in a higher-risk investment. They sell you the chip for face value, and let you play against one of their dealers. It's really (really) hard to get a license to do that, so ...)
So, no, I really don't expect people to cash many chips in, but you always can, if you would like.
I get that it's not for everyone, but that's fine with me, too.
