Using Purchased Licensed Merchandise as Prizes in a Commercial Business
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Reviewed & verified by A. Jason Velez, Esq.*
Managing Attorney, 1LAW · Last reviewed February 1, 2026
Legal Inquiry
Consumer Legal Issue
I own a claw machine business and wanted to see if it was legal to buy licensed plush from Walmart to sue in a claw machine of my own on location that I make money on I know you can’t use pimoen plus but I was seeing if all the others where on to use.
Attorney Answer
Buying a licensed plush toy at retail gives you ownership of that physical item, but it doesn't automatically give you the right to redistribute it as a paid prize in your claw machine business — this is a question of trademark, copyright, and licensing law, not anything specific to Nebraska.
The general concept at play is often called the first-sale doctrine: once you lawfully buy a physical copy of a licensed item, you're generally free to resell or dispose of that specific copy. But that principle doesn't necessarily extend to using the underlying character or brand in a new commercial context, such as offering it as a prize in a coin-operated machine you profit from. Whether that additional use is permitted depends on the terms the licensor attached to the product, not on state law. The image you sent in response wasn't able to be reviewed, so this answer is necessarily general rather than based on the specific packaging or license terms shown there.
What you can do:
1. Check the product packaging, hang tags, and any point-of-sale terms for language addressing commercial or resale use.
2. Contact the retailer's customer service or the brand/licensor directly to ask whether use as a paid arcade or claw-machine prize is permitted.
3. Get any permission in writing before using a given character's merchandise commercially.
4. When uncertain, favor unlicensed items or merchandise explicitly sold for prize/wholesale use instead.
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Frequently Asked Questions
Does buying a licensed product give the right to use it in a business?
Not necessarily, owning a physical item you purchased generally lets you resell or dispose of that specific copy, but it doesn't automatically extend to using the underlying brand or character in a new commercial context.
How can a business owner find out if using licensed merchandise as prizes is allowed?
Generally, checking the product packaging and tags for commercial-use terms, and contacting the retailer or licensor directly for written permission, is the recommended approach.
What's a safer alternative to using licensed toys as prizes without permission?
Many businesses in this situation favor unlicensed merchandise or items explicitly marketed for wholesale or prize use to avoid trademark or licensing issues.
