Why Do People LOVE Cash Prizes
When asked what prize they want, most people entering sweepstakes and contests overwhelmingly say they want cash prizes. Why? Why not a trip, or a car, or jewelry? Here are the three big reasons:
1. With cash prizes, you can buy exactly what you want.
With most prizes, the sponsor customizes the choices or options for a prize, such as selecting the make and model of the car offered as a prize, or the flights and hotels for a trip. With cash, the winner can control how the money is spent, and whether they take a trip or use the cash for other expenses.
2. Taxes are easier to pay off.
Every prize awarded in the United States is taxed, and prizes over $600 even come with their own 1099 to include in the winner’s tax return. A cash prize can be used to be able to pay those taxes. Some winners find themselves in a predicament when taxes are due and they don’t have the cash available to pay the taxes and end up having to sell their prize to do so.
3. Cash can be sent much faster and easier.
When physical prizes are sent to winners, they might require a signature for delivery, or require winners to pick them up. And if might take weeks for fulfillment to happen. Cash, however, can be sent quickly and easily.
For sweepstakes and contest sponsors, cash prizes also can make a lot more sense than other prizes. Here’s why:
1. Cash generates more interest from consumers.
Want to guarantee a large number of entrants take part in your next sweepstakes or contest? Give away cash — the larger the amount the more entrants you will get. Cash generates more interest than any other type of prize.
2. Cash is easier to give away than prizes that have to be boxed and shipped or sourced locally.
When you run a sweepstakes, costs for packaging materials, packing, shipping and delivery add up. Add on additional expenses like sourcing a local car dealership for fulfillment of a car, or a travel agent for coordinating travel, and expenses go even higher. Or, you can give away cash and send it electronically to someone’s bank account within 24 hours or using e-gift cards for a minimal cost.
3. The claim rate on cash prizes is higher than other forms of prizes.
There are many times when sponsors want to give away certain prizes, and no one wants them. Winners may have wanted the big prize, but the 3rd prize velvet tiger wall painting they have to pay taxes on? Not so much. So they don’t complete the claim forms and prizes go unclaimed.
So next time you run a sweepstakes or contest, and you are contemplating what type of prize to give away, consider cash prizes!
We can help you craft the perfect promotion, and have over 60 years of experiencing managing large cash prize sweepstakes and contests. Contact us and we can help you get started.
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