May 19, 2003

Dear Participating Retailer:


On behalf of Scholastic, I'd like to thank you for partnering with us in the Harry Potter and the Order of the Phoenix Retailer Coupon Program. Here's an update on the Scholastic Book Fair pre-sell campaign which started in late March and will run until the end of May at school book fair events.

The campaign has met with enthusiasm and strong participation. Over 80% of the customers polled plan to redeem their coupon at a participating retailer and pick up their pre-ordered copy in store. In exchange, Scholastic will reimburse you for the collected certificates as per the program guidelines. There is no need for any money to change hands.

After the first of June, we will provide you, by geographic location, the number of certificates sold in your area. To help inform your customers of your participation I have enclosed a tent sign announcing that you accept Harry Potter and the Order of the Phoenix Book Fair Certificates. Please thoroughly brief your staff on the particulars of the program, details of which are enclosed.

When you signed on as a participating retailer we promised to provide you with 10 exclusive Harry Potter and the Order of the Phoenix collectible caps for in store prizes and staff use. We've doubled the quantity-as an indication of how much Scholastic appreciates your support.

Finally, I'd like to reiterate one of the goals of the program was to help drive new business to your store. Clearly, these customers of Scholastic Book Fairs will become customers of yours. We hope you will assure them that they're welcome at your Harry Potter events (we have already had queries and a few complaints), welcome to redeem their certificates at your store and welcome to become a repeat customer.

Scholastic sees this as a terrific opportunity for you and for us to work together to bring the power of literature and the love of reading to the widest audience in history through this international book publication event. We hope that the excitement we will create together will make books and bookselling the center of the nation's attention at a time when our business could really use it. It's a great moment in bookselling and publishing and we're thrilled that you've joined with us in making it magical. Thank you.


Please check our Harry Potter Bookseller website www.scholastic.com/custsupport/booksellers/hpv.htm for additional information and note that a complete listing of participating retailers sorted by state, city, and zip code is available at http://www.scholastic.com/bookfairs/harrypotter/.

Sincerely,

Michael Jacobs
Senior Vice-President Trade