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Branstad: State Fair Board Should Listen to Cashless Concerns

The uproar against a cashless system to buy food at the Iowa State Fair stretched into a second day, with the fair board saying it would consider Gov. Terry Branstad's suggestion to listen to the outpouring of criticism.

Fair officials on Tuesday announced that cash would no longer be accepted at food concessions or the Giant Slide. Fairgoers would instead have to buy 50-cent tickets online or at more than 150 locations throughout the fairgrounds.

A blast of criticism quickly followed. Nearly 83 percent opposed the plan, according to an informal Des Moines Register survey that had nearly 1,600 votes. Iowans and others left more than 670 comments on the Register's Facebook wall, and more than 380 on the Iowa State Fair's wall.

Few comments gave the plan a thumbs up. On Wednesday, Branstad and Lt. Gov. Kim Reynolds said fair officials should listen to those concerns.

Reynolds serves on the fair board in place of Branstad. She was not at the meeting when the board made the switch, said Jimmy Centers, spokesman for the governor's office.

"Though the governor and lieutenant governor understand the board members' intentions were good regarding the decision to move toward a ticket-based payment method, they believe the Iowa State Fair would be wise to listen to the concerns of fairgoers and Iowans before implementing such a large change in policy," Centers said in a statement.

Fair officials, in a statement, said the board will consider the governor's comments. The board wants to improve the integrity of its financial system, not harm the fair experience, the statement said.

"The fair board has been moved by the passion of our fairgoers and their desire to preserve the traditions they embrace," the statement said. "Our fairgoers, including our exhibitors and vendors, are the fair's most important assets."

State Fair officials expected some resistance, said Lori Chappell, the fair's spokeswoman. One of most significant benefits will be something not seen by fairgoers—managing cash between the fair and vendors, she said. Fair officials plan to do everything possible to minimize headaches like long lines, she said.

"Change can be challenging, so we knew there would be apprehension," Chappell said.

Fair officials on Wednesday released some additional details about the plan:

• Tickets will have security features similar to those on lottery tickets.

• The new system will require hiring more staff. Estimates on the cost and number of staff are not yet available.

Some threaten to boycott 2014 fair

The stream of threats to boycott the fair continued Wednesday.

"It's now on my calendar—'Not going to the Fair,'" wrote David Young on Facebook.

Vanessa de la Cerda of Des Moines said she won't attend this year's fair, which is Aug. 7-17. "It's going to be another line that we're going to have to wait in and there's always glitches in a new system, so I'll pass this year," she wrote in an email to the Register.

Scott Peters, 35, of Omaha said he wonders what will happen to the unused tickets. Fair officials said they would never expire. Peters said he thinks few people would save them for future use.

"I think it's a fleecing of all the patrons," said Peters, who has attended the fair for the past 10 years with his wife and children.

Research by fair officials shows revenues have increased in other states that made the switch, said Chappell, the fair's spokeswoman. The Iowa State Fair had $21.1 million in revenue in 2012.

But it's too soon to know whether the State Fair will see an increase or a decrease in revenues with a cashless system, two marketing experts said.

People tend to spend more when paying with something they don't closely associate with money, said Laura Smarandescu, an Iowa State University marketing professor.

In one study, Smarandescu found people spent $23 when paying with a gift card, compared with just $11 when paying with cash. She attributes the difference to the fact that people "don't feel the same pain" when paying with card as when forking over cash. She said the same idea could apply to paying for fair food with tickets.

"A less familiar payment format makes people less price sensitive," she said. "You would pay what you would not normally pay."

But fairgoers could end up spending less if people buy too few tickets when they first arrive, creating an obstacle for impulse buys, said John Murry, a University of Iowa marketing professor. The fair could compensate for this by making it easy to buy tickets if people decide to buy more once on the fairgrounds, he said.

"I'm not sure people would be willing to buy enough tickets to begin with," Murry said.

Iowa program modeled after Texas

The Iowa State Fair is modeling its system after a similar program used in Texas.

The State Fair of Texas has used coupons since at least 1991, said Sue Gooding, the Texas fair's senior vice president for communication.

Gooding said she recalls an adjustment period of a few years. Fairgoers had to learn the system, and officials shifted the location of ticketing booths based on foot traffic, she said.

The public's response to the shift was muted, she said. "There was no letter-writing campaign; the governor didn't get involved," she said.

One key benefit to using tickets is in accounting, she said.

Using the coupons allows for a quicker and more accurate count of money. To count the money, coupons are placed on a scale and weighed, and money is distributed within 24 hours, Gooding said.

"It's a very clean process on both ends," Gooding said. "There's no question about how much a booth or ride generated, because it came straight back to us in the form of coupons."


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