FT is citing higher costs of operation, but they need to look outside of the box.  If "cash" is 25+% cheaper to offer than merchandise, they really need to look at why.  I'm using the term "cash," but for me tourney tickets and actual cash are interchangeable.  If I can get the same merchandise thru Best Buy (which already includes shipping, customer service, taxes, and whatever fees you can think of) that is 25% cheaper than the store (with faster delivery time, better customer service, credit card cash back, etc), what's the point of even having the store?!?  I just get the cash thru FT, and buy the item myself, and "make 25%."

In fact, FT can do better than they currently are by acting as a middle man.  Just dump most of the store infrastructure you currently have and save a ton of money.  Just take the order and place the order.  Collect say 12.5% and pass the other half onto the customer.  They will already be saving a lot from getting rid of the store infrastructure and they can use that money to hire more customer service reps and the automated system to take and place orders.  An alternate method is to have some sort of concierge serve.  Don't even bother with shipping and customer service to over 150 countries. I don't really want to get into specifics because I have no idea what kinds of Rube Goldberg machines are involved in operating the store, but there is just so much inefficiency in the current system and pricing that there are many viable alternatives to improve the situation for FT as well as for the customer.  Win win?

Some people are calling this a "cash grab" by FT.  But no.  What you has to realize is, if the merchandise is even more overpriced, they will sell even less merchandise.  Then you have a situation where you have fixed costs spread over fewer items sold.  Granted, there will be a bunch of noobs who have no idea how badly they are getting shafted, but I would think that a majority of the high volume regs (people with the most points) are reasonably well-educated on how the system works.  Maybe they figure, regs aren't buying the merchandise anyway - let's just shaft the noobs?

At the end of the day, the whole point of offering merchandise is to say to the customer... "we really appreciate your business."  So when the customer looks at the merchandise at his home, his positive attachment to the provider of the merchandise is reinforced.  Whenever I look at my 30" monitor, my multiple 50" Sony LCD TVs, my Vaio laptop, my multiple itouches, my Bose soundock, my bathrobe, or any of the tons of stuff I had bought from the FT store, I associate the improvement in my quality of life to FT.  This was before they started offering tourney tickets (and cash).

In this way, the FT Store's handling of its merchandise is completely bizarre.  If they raise prices, I can never buy merchandise thru FT again.  Even with the current pricing structure, it was highly unlikely I would buy merchandise any more because it was such terrible value.  And if for some reason, I was *forced* to get merchandise, what I'm going to be thinking whenever I look at the item is: "God!  Those cheap bastards really shafted me on that TV.  They reduced my rakeback but gave me more points and THEN they raised all the points prices.  Nice.  Oh... and it took 8 weeks for me to get it with no email confirmation.  FU FT."  Good way to build customer loyalty.  WTF are they thinking?

Any negative changes to the points program will have a negligible effect on me, because I always get tourney tickets (which are the best value).  Granted, FT makes money on tourney tickets, but is this really what they want?  Now I have no future items coming into my house reminding me of my rewards from FT.  Instead the nearly $10K annually worth of points are going into MTTs that only leaves me frustrated and angry.  So instead of "FT = cool stuff in my house", the new equation is "FT = broken mouse + blue balls."  Nice.