Well #1 it is sketchy and generally frowned upon. You never want to build your reputation as a shady business.
#2, you would not be included in the actual tournament payout, and while you would indeed keep your normal profit margins, you would not move near as much plastic when players are wanting to spend payout, not cash.
I agree with the notion that vendors pay a flat rate per square footage of space. Then they redeem the "tourney bucks" they receive from players for cash from the TD for an agreed upon rate. This rate should not do anything but help the TD cover expenses or whatnot and therefore should not be anything too extreme.
However, this whole "scam" business is why I am for the trophy only movement. Am tournaments should be about the camaraderie and competition, round ratings, a players pack, lunch, etc. If you want to receive cash or prizes for playing disc golf, play pro. When I won my adult league basketball tournament last year, we didn't each win 5 basketballs and a 3 pairs of shoes.
I'm with you on the flat vendor rate, but personally I don't care what the TD uses it for or what he/she charges. That would be dictated by demand, I feel like free market would dictate fair value on fees vs. potential profit. I actually think that's a legit way that a TD can grow the event value.
Also totally 100% with you on AM tournaments being trophy only - but only once the Open generates its own purse. Too many TD's fire back by saying "oh but the retail value on your players pack is yadda yadda over entry" which is a thin argument. For my money, make it an experience...I don't need the same 5 useless disc golf items every tournament.
When the PDGA standards state 100% payout, the intention behind that is at retail value. It doesn't matter how much that prize actually cost the TD. We could choose which discs to hand out directly as payout and then the issue is moot, but players prefer picking their prize, so we give them that option by using scrip. My vendor also likes giving players a good deal and rather than haggling over the price of the discs at each transaction when players are paying cash, he posts a discount that he is willing to give. With scrip he doesn't have the room in his margin to haggle or offer discounts.
Our events regularly payout Ams at 130-140% retail value. I take great offense at calling my events a scam. I am not cheating anyone out of anything and our events are generally considered the best value in the area. I will take action if you proceed with this libel.
I don't much care what you take great offense at, nobody was targeting you anyway. My post was speaking to the general nature of an agreement/system.