Sweepstakes
Encyclopedia
The United States
consumer sales promotion known as a sweepstake (also known by its inflected forms which are both single and plural: sweepstakes and sweeps) has become associated with marketing
promotions targeted toward both generating enthusiasm and providing incentive reactions among customers by enticing consumers
to submit free entries into drawings of chance (and not skill) that are tied to product or service awareness wherein the featured prizes are given away by sponsoring companies. Prizes can vary in value from less than one dollar to more than one million U.S. dollars and can be in the form of cash, cars, homes, electronics, etc.
Sweepstakes frequently have eligibility limited by international, national, state, local, or other geographical factors.
Sweepstakes are often referred to by marketing promoters as second-chance sweepstakes when utilized in conjunction with the awarding of unclaimed prizes during instant-win promotions.
In the U.S., sweepstakes sponsors are very careful to disassociate themselves from any suggestion that players must pay to enter, as this would bring them into conflict with federal lottery laws. Sweepstakes typically involve enticements to enter a consumer promotion for prize
s that range from fantastic wins such as car
s or large sums of money
to smaller prizes that are currently popular with consumers in the United States such as Apple iPods. There should be no monetary cost to the entrant to participate in the sweepstakes prize drawing (although some online sweepstakes require entrants to subscribe or promotional mailing list) and sweepstakes winners should also not be required to pay a fee of any type to receive their prizes.
Because of their potential for abuse, sweepstakes are heavily regulated in many countries. The U.S., Canada, and individual U.S. states all have laws covering sweepstakes, resulting in special rules depending on where the entrant lives. The U.S. Federal Trade Commission exercises some authority over sweepstakes promotion and sweepstakes scams in the United States. Notably, sweepstakes in Canada and several European countries require entrants to solve a mathematical puzzle
, making it a contest of skill, in order to overcome requirements that would classify sweepstakes as a form of gambling
. There are similar laws in Brazil, where sweepstakes must include a “cultural contest”, often giveaway questions like “which brand gives you a house?”
As an example relating to state laws pertaining to sweepstakes promotions within the United States, Tennessee residents are prohibited by a policy of the Tennessee Alcoholic Beverage Commission (and not a state law) from entering sweepstakes online sponsored by manufacturers of wines and liquors; however, Tennessee residents may enter many of these same sweepstakes promotions by entries delivered by the U.S. Postal Service. Another example is wherein Tennessee state law prohibits sweepstakes agencies and sponsors from requiring sweepstakes prize winners to submit to "in perpetuity" publicity releases.
Most corporate-sponsored sweepstakes promoted in the United States limit entry to U.S. citizens, although some allow entry by legal residents of both the United States and Canada
.
Among the most popularly known sweepstakes in the United States were the American Family Publishers Sweepstakes
(now defunct), Publishers Clearing House
and Reader's Digest Sweepstakes
, each of which strongly persuaded entrants to purchase magazine
subscriptions by placing stickers on contest entry cardstock while promising multi-million dollar (annuity)
winners who will be "announced on TV." The American Family Publishers sweepstakes traditionally used paid advertisements during NBC's The Tonight Show
to announce its grand prize winners (for many years, its celebrity spokesman was Ed McMahon
). All three companies eventually paid millions of dollars in fines and penalties to a variety of States who initiated legal actions against them.
The HGTV "Dream Home Giveway
" is the American
cable
network
Home & Garden Television annual project house and sweepstakes, held since 1997. The sweepstakes promotion commences with a January 1 television special showcasing the fully furnished, custom-built home valued in excess of one million dollars; viewers are invited to enter online or by sending in a postcard. The 2007 HGTV sweepstakes drew 41 million entries.http://www.washingtonpost.com/wp-dyn/content/article/2007/03/19/AR2007031901561_pf.html
Sweepstakes are frequently used by fast-food restaurants to boost business. One of the most popular has been the McDonald's Monopoly "instant-win " game-piece promotion (free game pieces are made available by requests through the U.S. mail) although the odds of winning the McDonald's Monopoly jackpot prize are usually much greater than the odds of winning many U.S. state lotteries. Soft drink companies also sponsor many sweepstakes, such as the Pepsi Billion Dollar Sweepstakes
game and the Pepsi Stuff
loyalty rewards program that allowed Pepsi drinkers to accumulate points from packages and cups and redeem them for merchandise. Pepsi Stuff
was Pepsi
's largest and most successful long-term promotion ever and it ran for many years in the US and in many countries around the world. Other sponsors may require the submission of a UPC
of a company product (with provision for receiving a "free" UPC) for entry into the sweepstakes drawing.
Sweepstakes must be carefully planned to not only comply with local laws but curtail forms of entrant fraud and abuse. Before home computers were popular, a common method of entry was a mailed, plain 3" × 5" index card with the entrant's name and address. Massive computer-printed entries made a new requirement that entries must be "hand-printed". Laser printers able to mimic ink pen writing are also a problem for sponsors. In most sweepstakes, entrants and their relatives must not be related to the sponsor or promoter.
Many state lotteries also run a second chance sweepstakes in conjunction with the retail sale of state lottery scratch cards
in an effort to increase consumer demand for scratch cards and to help control the litter
problems associated with the improper disposal of non-winning lottery tickets. As a lottery tickets are considered to be bearer instrument
under the Uniform Commercial Code
, these lottery scratch card promotions can be entered with non-winning tickets that are picked up as litter.
Many sweepstakers meet locally in "clubs" and nationally at a yearly convention, which 800 people attended in 2006.The 18th National Sweepstakes Convention was held in June 2007 at Dearborn, Michigan. Sweepstakes conventions are hosted by a local club in a different state each year.
.
Most sweepstakes in the UK are small scale. They are classed as work lotteries, resident's lotteries or private society lotteries and do not require a licence, provided that all the money staked is paid out as prize money.
The popularity of the term sweepstakes may derive from the Irish Sweepstakes, which was very popular throughout the world from the 1930s to the 1980s.
There is a tradition of office sweepstakes (known as office pools in the U.S.), which usually take place over large sporting events such as the Grand National
and the World Cup
. Entrants pay an equal stake for each horse/team they draw out of the hat before the event. The winner then takes the pot. For horse racing events, the pot may be split among the horses which come first, second and third.
What an American would call a "sweepstakes" is likely to be labelled as a "competition" in the UK.
Sponsor promotion:
Winner notification:
Winner receives prize.
By law, the sponsors of sweepstakes must not require the prize winners to pay any shipping or handing charges in order to win or receive their prizes.
Sweepers frequently send out SASE (self addressed, stamped envelopes) to receive free game pieces, official entry forms, and copies of the official rules that are unique and pertaining to individual sweepstakes promotions.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
consumer sales promotion known as a sweepstake (also known by its inflected forms which are both single and plural: sweepstakes and sweeps) has become associated with marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
promotions targeted toward both generating enthusiasm and providing incentive reactions among customers by enticing consumers
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
to submit free entries into drawings of chance (and not skill) that are tied to product or service awareness wherein the featured prizes are given away by sponsoring companies. Prizes can vary in value from less than one dollar to more than one million U.S. dollars and can be in the form of cash, cars, homes, electronics, etc.
Sweepstakes frequently have eligibility limited by international, national, state, local, or other geographical factors.
Sweepstakes are often referred to by marketing promoters as second-chance sweepstakes when utilized in conjunction with the awarding of unclaimed prizes during instant-win promotions.
Marketing
Sweepstakes with large grand prizes tend to attract more entries regardless of the odds of winning. Therefore, the value of smaller prizes usually total much less than that of the top prize. Firms that rely on sweepstakes for attracting customers, such as Publishers Clearing House and Reader's Digest, have also found that the more involved the entry process, the more entrants, in a similar way to casinos inventing games that appear to rely partly on skill.Sweepstakes in the United States
Prize
A prize is an award to be given to a person or a group of people to recognise and reward actions or achievements. Official prizes often involve monetary rewards as well as the fame that comes with them...
s that range from fantastic wins such as car
Čar
Čar is a village in the municipality of Bujanovac, Serbia. According to the 2002 census, the town has a population of 296 people.-References:...
s or large sums of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
to smaller prizes that are currently popular with consumers in the United States such as Apple iPods. There should be no monetary cost to the entrant to participate in the sweepstakes prize drawing (although some online sweepstakes require entrants to subscribe or promotional mailing list) and sweepstakes winners should also not be required to pay a fee of any type to receive their prizes.
Because of their potential for abuse, sweepstakes are heavily regulated in many countries. The U.S., Canada, and individual U.S. states all have laws covering sweepstakes, resulting in special rules depending on where the entrant lives. The U.S. Federal Trade Commission exercises some authority over sweepstakes promotion and sweepstakes scams in the United States. Notably, sweepstakes in Canada and several European countries require entrants to solve a mathematical puzzle
Skill testing question
Skill testing questions are a legal requirement attached to many contests in Canada.The combined effect of Sections 197 to 206 of the Criminal Code of Canada bans for-profit gaming or betting, with exceptions made for provincial lotteries, licensed casinos, and charity events...
, making it a contest of skill, in order to overcome requirements that would classify sweepstakes as a form of gambling
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
. There are similar laws in Brazil, where sweepstakes must include a “cultural contest”, often giveaway questions like “which brand gives you a house?”
As an example relating to state laws pertaining to sweepstakes promotions within the United States, Tennessee residents are prohibited by a policy of the Tennessee Alcoholic Beverage Commission (and not a state law) from entering sweepstakes online sponsored by manufacturers of wines and liquors; however, Tennessee residents may enter many of these same sweepstakes promotions by entries delivered by the U.S. Postal Service. Another example is wherein Tennessee state law prohibits sweepstakes agencies and sponsors from requiring sweepstakes prize winners to submit to "in perpetuity" publicity releases.
Most corporate-sponsored sweepstakes promoted in the United States limit entry to U.S. citizens, although some allow entry by legal residents of both the United States and Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
.
Among the most popularly known sweepstakes in the United States were the American Family Publishers Sweepstakes
American Family Publishing
American Family Publishers, an originally Newark, New Jersey, then Jersey City, New Jersey-based company that sold magazine subscriptions, was best known for running sweepstakes in which a large amount of money was offered as the grand prize...
(now defunct), Publishers Clearing House
Publishers Clearing House
Publishers Clearing House is a multi-channel direct marketing company that offers discounted magazine subscriptions and household merchandise to consumers with the chance to enter to win one of many ongoing sweepstakes...
and Reader's Digest Sweepstakes
Reader's Digest
Reader's Digest is a general interest family magazine, published ten times annually. Formerly based in Chappaqua, New York, its headquarters is now in New York City. It was founded in 1922, by DeWitt Wallace and Lila Bell Wallace...
, each of which strongly persuaded entrants to purchase magazine
Magazine
Magazines, periodicals, glossies or serials are publications, generally published on a regular schedule, containing a variety of articles. They are generally financed by advertising, by a purchase price, by pre-paid magazine subscriptions, or all three...
subscriptions by placing stickers on contest entry cardstock while promising multi-million dollar (annuity)
Annuity (US financial products)
In the United States an annuity contract is created when an insured party, usually an individual, pays a life insurance company a single premium that will later be distributed back to the insured party over time...
winners who will be "announced on TV." The American Family Publishers sweepstakes traditionally used paid advertisements during NBC's The Tonight Show
The Tonight Show
The Tonight Show is an American late-night talk show that has aired on NBC since 1954. It is the longest currently running regularly scheduled entertainment program in the United States, and the third longest-running show on NBC, after Meet the Press and Today.The Tonight Show has been hosted by...
to announce its grand prize winners (for many years, its celebrity spokesman was Ed McMahon
Ed McMahon
Edward Peter "Ed" McMahon, Jr. was an American comedian, game show host and announcer. He is most famous for his work on television as Johnny Carson's sidekick and announcer on The Tonight Show from 1962 to 1992. He also hosted the original version of the talent show Star Search from 1983 to 1995...
). All three companies eventually paid millions of dollars in fines and penalties to a variety of States who initiated legal actions against them.
The HGTV "Dream Home Giveway
HGTV Dream Home
The HGTV Dream Home is the American cable network Home & Garden Television's annual project house and sweepstakes, held since 1997. The sweepstakes commences with a January 1 television special showcasing the fully furnished, custom-built home valued in excess of one million dollars; viewers are...
" is the American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
cable
Cable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...
network
Television network
A television network is a telecommunications network for distribution of television program content, whereby a central operation provides programming to many television stations or pay TV providers. Until the mid-1980s, television programming in most countries of the world was dominated by a small...
Home & Garden Television annual project house and sweepstakes, held since 1997. The sweepstakes promotion commences with a January 1 television special showcasing the fully furnished, custom-built home valued in excess of one million dollars; viewers are invited to enter online or by sending in a postcard. The 2007 HGTV sweepstakes drew 41 million entries.http://www.washingtonpost.com/wp-dyn/content/article/2007/03/19/AR2007031901561_pf.html
Sweepstakes are frequently used by fast-food restaurants to boost business. One of the most popular has been the McDonald's Monopoly "instant-win " game-piece promotion (free game pieces are made available by requests through the U.S. mail) although the odds of winning the McDonald's Monopoly jackpot prize are usually much greater than the odds of winning many U.S. state lotteries. Soft drink companies also sponsor many sweepstakes, such as the Pepsi Billion Dollar Sweepstakes
Pepsi Billion Dollar Sweepstakes
The Pepsi Billion Dollar Sweepstakes was a contest, announced by soft drink company Pepsi Cola on April 10, 2003, beginning on May 1 and ending on September 14, all of the same year. For the contest, Pepsi printed one billion special codes, which could be redeemed either on the Pepsi website or...
game and the Pepsi Stuff
Pepsi Stuff
Pepsi Stuff was a major loyalty program launched by PepsiCo, first in North America on March 28, 1996 and then around the world, featuring premiums — such as T-shirts, hats, denim and leather jackets, bags and mountain bikes — that could be purchased with Pepsi Points through the Pepsi Stuff...
loyalty rewards program that allowed Pepsi drinkers to accumulate points from packages and cups and redeem them for merchandise. Pepsi Stuff
Pepsi Stuff
Pepsi Stuff was a major loyalty program launched by PepsiCo, first in North America on March 28, 1996 and then around the world, featuring premiums — such as T-shirts, hats, denim and leather jackets, bags and mountain bikes — that could be purchased with Pepsi Points through the Pepsi Stuff...
was Pepsi
Pepsi
Pepsi is a carbonated soft drink that is produced and manufactured by PepsiCo...
's largest and most successful long-term promotion ever and it ran for many years in the US and in many countries around the world. Other sponsors may require the submission of a UPC
Universal Product Code
The Universal Product Code is a barcode symbology , that is widely used in North America, and in countries including the UK, Australia, and New Zealand for tracking trade items in stores. Its most common form, the UPC-A, consists of 12 numerical digits, which are uniquely assigned to each trade item...
of a company product (with provision for receiving a "free" UPC) for entry into the sweepstakes drawing.
Sweepstakes must be carefully planned to not only comply with local laws but curtail forms of entrant fraud and abuse. Before home computers were popular, a common method of entry was a mailed, plain 3" × 5" index card with the entrant's name and address. Massive computer-printed entries made a new requirement that entries must be "hand-printed". Laser printers able to mimic ink pen writing are also a problem for sponsors. In most sweepstakes, entrants and their relatives must not be related to the sponsor or promoter.
Many state lotteries also run a second chance sweepstakes in conjunction with the retail sale of state lottery scratch cards
Scratchcard
A scratchcard is a small card, often made of thin paper-based card for competitions and plastic to conceal PINs, where one or more areas contain concealed information which can...
in an effort to increase consumer demand for scratch cards and to help control the litter
Litter
Litter consists of waste products such as containers, papers, wrappers or faeces which have been disposed of without consent. Litter can also be used as a verb...
problems associated with the improper disposal of non-winning lottery tickets. As a lottery tickets are considered to be bearer instrument
Bearer instrument
A bearer instrument is a document that indicates that the owner of the document has title to property, such as shares or bonds. Bearer instruments differ from normal registered instruments, in that no records are kept of who owns the underlying property, or of the transactions involving transfer of...
under the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
, these lottery scratch card promotions can be entered with non-winning tickets that are picked up as litter.
Many sweepstakers meet locally in "clubs" and nationally at a yearly convention, which 800 people attended in 2006.The 18th National Sweepstakes Convention was held in June 2007 at Dearborn, Michigan. Sweepstakes conventions are hosted by a local club in a different state each year.
Sweepstakes in the UK
Sweepstakes in the UK are considered to be lotteries under the Gambling Act 2005Gambling Act 2005
The Gambling Act 2005 is an Act of the Parliament of the United Kingdom. It mainly applies to England and Wales, and to Scotland, and is designed to control all forms of gambling...
.
Most sweepstakes in the UK are small scale. They are classed as work lotteries, resident's lotteries or private society lotteries and do not require a licence, provided that all the money staked is paid out as prize money.
The popularity of the term sweepstakes may derive from the Irish Sweepstakes, which was very popular throughout the world from the 1930s to the 1980s.
There is a tradition of office sweepstakes (known as office pools in the U.S.), which usually take place over large sporting events such as the Grand National
Grand National
The Grand National is a world-famous National Hunt horse race which is held annually at Aintree Racecourse, near Liverpool, England. It is a handicap chase run over a distance of four miles and 856 yards , with horses jumping thirty fences over two circuits of Aintree's National Course...
and the World Cup
FIFA World Cup
The FIFA World Cup, often simply the World Cup, is an international association football competition contested by the senior men's national teams of the members of Fédération Internationale de Football Association , the sport's global governing body...
. Entrants pay an equal stake for each horse/team they draw out of the hat before the event. The winner then takes the pot. For horse racing events, the pot may be split among the horses which come first, second and third.
What an American would call a "sweepstakes" is likely to be labelled as a "competition" in the UK.
Sweepstake in Colombia, South America
After years of heavy promotions and war prices, consumer packaged goods companies turned to Sweepstakes to influence consumer behavior in favor of prizes or “gifts” over changes in price. This has led to changes in marketing strategies targeting supermarket's consumers. Now, shoppers expect to find sweepstakes promotions whenever they go grocery shopping. With Sweepstakes, shoppers can win big prizes like houses, cars, or cruise ship trips or smaller prizes such as gift cards. These strategies have paid off, now consumers are not only looking at changes in price but also they are looking for the brand that offers the best sweepstake promotion.General structure of winning a sweepstakes prize
Almost every sweepstakes in the United States offering prizes valued at or greater will typically follow the following structure outlining the lifetime of a sweepstakes:Sponsor promotion:
- Creating the sweepstakes promotion for a sponsor or sponsors;
- Advertising the sweepstakes, prize structure, and the official rules;
- Opening date for receiving entries;
- Closing date for receiving entries;
- Drawing date to judge winning entries.
Winner notification:
- Sweepstakes promotion judges contacting prize winner;
- Winner filing publicity release with sponsor's sweepstakes promotion agency;
- Winner filing affidavitAffidavitAn affidavit is a written sworn statement of fact voluntarily made by an affiant or deponent under an oath or affirmation administered by a person authorized to do so by law. Such statement is witnessed as to the authenticity of the affiant's signature by a taker of oaths, such as a notary public...
of eligibility (compliance with official rules) with sponsor's sweepstakes promotion agency; - Winner filling any required federal or state tax forms with sponsor's sweepstakes promotion agency;
Winner receives prize.
By law, the sponsors of sweepstakes must not require the prize winners to pay any shipping or handing charges in order to win or receive their prizes.
Sweepers frequently send out SASE (self addressed, stamped envelopes) to receive free game pieces, official entry forms, and copies of the official rules that are unique and pertaining to individual sweepstakes promotions.
See also
- History of United States Postal Service ratesHistory of United States Postal Service rates-Plot:Taking the above data and plotting it yields the graph shown to the right.The dark plot is the actual issued price of the stamp and the light plot is the price adjusted for inflation and is shown in 2008 US cents....
- Lottery in the United States