Archive for the ‘Prizes’ Category
April 19th, 2011
The highlight of any Sweepstakes, Game, or Contest is the prizes offered. So when you notify a winner of their windfall you’d expect they’d be overjoyed – no? Half the time, yes. The other half, understandably, is suspicion before the joy, which it’s hard not to be in this day and age.
There are a few ways a consumer can validate the legitimacy of a promotion, and a few red flags to look for in a scam.
What to do:
1. Who’s calling you? Either the Sponsor will be contacting you directly, or their promotion administration agency. In either case, they should be providing you with a direct contact name/number for questions. Call it back, look it up online, or whatever other means to make sure they’re calling you from a ‘real’ location.
2. If you’re being contacted from a promotion administration agency, check out their website. Most have a list of past projects and current clients – review the list as a way to help validate the relationship between the agency and the Sponsor and the promotion you’ve won.
3. Check out the promotion that you’ve won. Do you remember entering? Oftentimes, consumers who have won via an automatic purchase-based promotion may or not be aware the campaign is going on since the entry mechanism is so passive. More often than not now, the promotion is advertised online so you can visit the microsite directly to review the details. If not, ask to see a copy of the Official Rules. Even when consumers enter promotions directly by filling out an entry form or by playing a game, they may forget entering – the Sponsor/agency contact should be able to walk you through the program details to help jog your memory so you’re making a well-informed decision before accepting a prize.
What not to do:
1. A legitimate promotion will never require you to pay to receive a prize. You also will never be asked to provide your credit card or other account information. Throw up the red flag if you are being pressured for this information.
2. Keep in mind that in compliance with Federal law, Sponsors are legally required to file a 1099-MISC tax form for all winners receiving prize(s) valued over $600 (winners will be required to pay taxes to the government in the year the prize is awarded). With this, winners will be required to provide their Social Security number on their Affidavit of Eligibility & Release, so it is key to make sure you’re comfortable your information is going to a secure, legitimate source before replying.
3. As a Sponsor, making sure your general Customer Service Representatives are apprised of your current promotions is key to making the winner validation process as smooth as possible. It is alarming when a consumer calls to validate a program and the 800# representative is unaware of the program. If they cannot validate the programs directly, make sure there is a process in place for agents to redirect such calls to the main marketing/promotions department to handle directly.
April 19th, 2011
One question we are frequently asked by winners is in regard to taxes….they would love to accept a prize, but are unsure of the tax obligations. So here is the skinny on how it all works. If you win a prize that has a retail value of $600 or more, you will be issued a 1099-MISC Tax Form in the following calendar year that will reflect the retail value of the prize. The 1099-MISC Tax Form is a form used to report to the IRS income as the result of a prize won. It is also used to report rent, royalties and a variety of other types of income. The amount of taxes each individual winner will be required to pay to the IRS really depends on their household income, deductions, etc. So it is always best to consult your tax advisor when determing if a prize is financially reasonable for any winner to accept.
April 26th, 2010
Taxes on that prize? No one ever told me… When that 1099 tax filing arrives in your mailbox and you don’t remember where it came from or why it was sent to you, think back for a moment.
It could likely be from a prize you won in a sweepstakes the prior year. Prizes over $600 are considered miscellaneous income to the government and sponsors are required by law to issue a 1099 form to winners who receive a prize (or multiple prizes) valued over $600. Continue on…
February 5th, 2010
It is mind-blowing how the Internet has grown dramatically since its inception and to think the same phishing scams are still around. Although, they have changed just as dramatically as the Internet.
When designing a sweepstakes entry form, sponsors need to be extremely careful so the consumer does not feel like they need to give too much information in order to enter. Here are a few rules of thumb to keep in mind when designing an online sweepstakes entry form: Continue on…
October 1st, 2009
Equal Opportunity = Legal Promotion
“Equal opportunity” doesn’t solely exist in the HR world. It is imperative that it exist in the Promotion world as well.
Clients often ask, “Can we select the winner from a specific state?” We answer with a resounding, “No”… and offer the following explanation… Continue on…
June 5th, 2009
Everyday in the offline world, we are bombarded with thousands of advertisements – usually asking us to do the same thing: remember this URL (preferably when you are in front of a computer) or call us for more information. How often do any of us do that? Seriously, do you remember the last time you ate some chips and then went online or phoned in to enter the Potato Chip Dream Vacation Sweepstakes? Continue on…
April 23rd, 2009
Have you ever wondered how Sponsors make big campaigns with million dollar headlines? Promising to give away $1,000,000 or a new home to one lucky winner? How can they afford it?
Typically, when a million dollar prize is awarded it is insured by a third party. This third party will calculate Continue on…
April 23rd, 2009
These days more and more clients are calling us to ask, “We want to run a promotion but keep the costs low, how do we do that?” or “Can we do that?”. In our 16th year administering promotions, we know a little something about running promotions on a budget: Continue on…
April 23rd, 2009
‘What’s the right draw, the right quantity, the right prize?’ Difficult decisions in planning is one of the most complicated parts of a promotion, however it’s often an afterthought in many promotions. People don’t enter promotions to win just a T-shirt, think about who your customers are and what excites them about your brand. Historically cash, trips, and cars were the most popular prizes in the promotional world. But they are getting slowly edged out by experiential and practical prizes.
For example, if you’re a sports company and can leverage athlete relationships, a trip to meet a famous athlete would be the best choice for your prize. It’s also important to not overload your prize structure with giving away too much. Continue on…
February 13th, 2009
Godiva has created a chocolate paradise suite in Manhattan on the 21st floor of the Bryant Park Hotel. Renowned interior designer Jonathan Adler lent his skills Continue on…