Oxford Dictionary states:
"An object for a child to play with, typically a model or miniature replica of something."

The whole concept of action figures blurs this line, but I think that toys that are the representation of a character (regardless of whether that character exists in show/comic/back of the card) are toys, whereas merchandise are items (typically licensed) that is reflective of the brand in general.

This helps split the line between "toys" and "other playthings" - balls, boardgames, videogames, etc.

Speaking specifically to transformers, this means that any character released by Hasbro is a toy, while any other TF related item (the MiltonBradley puzzles, walkey-talkeys, visors, licensed backpacks, etc) are merchandise.