From 1955 through 1983, Merlin's Magic Shop was the place to go for magic tricks, guide books (I have one from 1960 with a price sticker from the magic shop), gag gifts, and who knows what all. As kids my brother and I always wanted to go in and look at the rubber monster masks, and if we were lucky, my grandmother would buy us a gag gift such as a squirting plastic flower, disappearing ink, or a plastic dog that smoked little cigarettes and blew smoke rings.
I wish I could read what Tinker Bell is selling on that sign in the window. If I ever get a better scanner maybe it will become legible.
When Fantasyland underwent its renovation in 1983, Merlin's closed to become Mickey's Christmas Chalet. Snore!