How Does a Sweepstakes Work?

A sweepstakes is a type of contest where prizes or money are offered to a randomly selected person or group of persons. You win a sweepstakes because you are randomly chosen, not due to any skill or activity on your behalf. When skill is involved, it is known as a contest. Sweepstakes are often part of a promotional or marketing plan offered by a company as an attempt to induce more product awareness. Companies or people who offer a sweepstakes cannot charge any sort of entry fee, and this also includes requesting the purchase of a product. Since sweepstakes can potentially be used in fraudulent ways, most states have specific laws regulating their use. The Federal Trade Commission supervises some sweepstakes aspects in the United States. Sweepstakes may be offered at specific locations or online.

Sweepstakes have specific rules. According to the Lustigman Firm, 10 official rules are associated with a legitimate sweepstakes: there must be a no-purchase-necessary clause; specific start and end dates must be provided; clear eligibility requirements must be set; precise information on methods for entry must be offered; any limitations on the number of entrants should be specified; the odds of winning must be stated; the prizes must be explained, along with their estimated values; an explanation must be provided on how the winners will be chosen and contacted; any restrictions on winning must be stated; information on the sponsor's name and address must be provided.

The general process of entering a sweepstakes is relatively basic. People must check the guidelines to ensure that they qualify according to location and demographic. Then they simply fill out a form detailing certain information such as name, address and phone number, then turn the entry form into the specified location. One example of a popular sweepstakes offered in the United States is Publishers Clearinghouse, a direct marketing firm that sells magazine subscriptions in addition to domestic products. The company launched their first sweepstakes in 1967, and in 1980 started awarding their prizes via live video footage. This allowed the company to draw more attention to its magazines and other products.