Sweepstakes used to be a type of lottery that was tied to a product that was being sold. This was until the FCC passed anti-lottery laws where sweepstakes were no longer allowed to have a purchase requirement tied to them. Today, they are used as a marketing tool to give prizes to existing customers or to shine a spotlight on a new product. Since there’s no skill involved, there’s almost no barrier to entry for the average consumer, and this serves as a very large incentive for customers to get involved.
Despite what seems like a straight forward concept, sweepstakes are heavily regulated in many countries. These countries include the United States, Canada, most of Europe, and parts of South America. In the United States, there are several states which have their own laws pertaining to the legality and regulation of these contests. In some European countries and Canada, entrants have to solve a puzzle or answer a very easy question in order to enter. This is also the case in Brazil. The idea is to put an element of skill involved in the contest instead of it just being pure chance. This is to circumvent gambling laws that are in place.
In the United States
In the United States, companies who run these contests are very careful to avoid customers have to pay to enter or pay in order to win. The reason for this is both of those conditions would be considered gambling. Prizes can range from something quite small such as clothing items or electronics to large prizes such as a car or an all-expenses paid vacation. While consumers don’t have to pay to enter, there is a possibility that signing up for the contest may mean they will receive junk mail and spam. This can come in the form of traditional mail or by digital means in the form of email.
Before the advent of the internet, it was not uncommon for consumers to enter these contests via a post card with the entrants name and address on it. Often, these were required to be written by hand so companies could avoid consumers sending in multiple entries with very little effort.
Some popular forms of this contest in the United States include Publishers Clearing House, Readers Digest, and American Family Publishers Sweepstakes. American Family Publishers is no longer in operation, but the others are currently running. These contests are also used by restaurants in order to increase patronage. One of the most famous examples is McDonald’s Monopoly. In this contest, patrons are afforded the chance at an instant win in the form of game pieces. These game pieces can be requested by mail from McDonalds during the time of the promotion. There are also times where large soda companies will offer such contests. Pepsi has run the Pepsi Billion Dollar Sweepstakes as well as the Pepsi Stuff program. In the Pepsi Stuff program, customers can trade in points that they have collected on Pepsi product packaging for promotional items that are branded with Pepsi. That particular promotion was very, very successful and ran for a long time all around the world.