Chuck E. Cheese wants to spend more than $2 million to destroy more than seven billion prize tickets, which it says is enough tickets to fill approximately 65 forty-foot cargo shipping containers.
Earlier this year CEC Entertainment Inc., the owner of the pizza company, filed for Chapter 11 bankruptcy. On Monday, CEC Entertainment Inc. filed a motion in the United States Bankruptcy Court for the Southern District of Texas, to destroy the tickets.
The seven billion tickets, which contain the company trademark have already been printed and Chuck E. Cheese wants them destroyed because the money it would cost to destroy the tickets is far cheaper than the $9 million that it would cost the pizza chain if the tickets ended up in the hands of the general public and were redeemed for prizes. The tickets are used at Chuck E. Cheese’s arcades.
Chuck E. Cheese said it has reached separate settlements with three different companies to destroy the tickets -- Eastern Trading LLC, Supply Chain Engineering, and Performance Food Group. Each of the companies is either as a manufacturer or distributor.
Chuck E. Cheese is turning to eTickets due to what is says is the industry’s rapid move toward contactless service due to COVID-19. And it notes that it will also eliminate future costs with the move.
“As a result of the unprecedented and rapid falloff in sales and resulting decline in the debtors' use of Prize Tickets caused by the COVID-19 pandemic, the debtors' need for prize tickets dramatically diminished, causing a buildup of prize tickets at various stages throughout the debtors' supply chain as the debtors had placed orders and planned for prize ticket utilization on historic run rates based on pre-COVID levels,” the company said in court documents. “This issue was further advanced as a result of the debtors' need to accelerate the implementation of electronic tickets (eTickets) and discontinue use of the paper prize tickets at all company-owned Chuck E. Cheese entertainment venues.”
Eastern Trading, PFG and SCE to reached separate agreements with the pizza maker for a combined $2,28,342.97 to destroy the tickets.
While Chuck E. Cheese is discontinuing the use of paper tickets, it will continue to honor all tickets currently in circulation and held by customers.
An emergency telephonic hearing will take place on the matter on Monday.
Chuck E. Cheese has a location at the Union Square shopping center on Union Deposit Road in Susquehanna Township.
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