Oft-Believed Sweepstakes Myths and Misconceptions

If you ask any group of sweepers whether you have to pay taxes on your prizes, someone will say, "Only on prizes valued at more than $600." This, however, is a complete myth.

US residents are required to pay taxes on all prizes with value. (I've heard some compelling arguments that prizes like baseball caps with the sponsor's logo on them are promotional giveaways, and thus have no value. This is something that you should discuss with your tax consultant, if you want to pursue it.)

Where Does the $600 Myth Come From?
Sponsors are required to report prizes over $600 with a 1099-MISC form. Sponsors may, at their discretion, report smaller prizes. But this doesn't release the winners from their own responsibility to report prizes as income.

Read more about paying taxes on your sweepstakes prizes.

People who enter instant win sweepstakes often wonder how winners beat the games to receive the prizes. The truth is that, with rare exceptions, the belief that the game play matters is a myth.

Instant win sweepstakes choose winners based on times, not on game results. It usually doesn't matter what you pick or how well you score -- if you're the first person to play after the winning time, you'll receive the prize.

Where Does the Instant Win Game Myth Come From?
Many instant win sweepstakes will ask you to choose which box holds the prize, to spin a wheel, or to play another kind of game. These games are just for fun, however, and don't influence your chances of winning.

Enter some instant sweepstakes right now.

A common sweepstakes myth is that sponsors don't really want to award prizes. They'll use every trick in the book to avoid having to give away those costly prizes.

Where Does the Greedy Sponsor Myth Come From?
I think this comes from the feeling that all corporations are greedy at heart, and that they are lose money by through prizes.

Prizes come out of a company's marketing budget. Instead of buying traditional ad placements, companies instead opt to purchase prizes. This is money that those companies would have spent one way or another.

And as with any well-crafted advertising campaign, sweepstakes will hopefully be a money-maker for the sponsoring company, not a drain.

Sweepstakes prizes can be even more cost-effective if they make a partnership with other companies to provide the prizes. Most important to the sponsor is that the sweepstakes results in positive attention for their company, which means that it's in their best interest to award the prizes.

Learn more about why companies run sweepstakes.

Many believe that using Roboform to enter sweepstakes will get you disqualified. As a rule, this is a myth.

Most references to automatic entry in rules apply to companies that mass-enter people without them visiting the website.

Does that mean that no sponsors object to Roboform? Of course not. You can't make a blanket statement about every company.

However, Roboform is difficult to detect and it usually makes no difference to the sponsor whether you type every letter by hand or not. Generally, you're fine entering with Roboform unless the rules specifically prohibit typing shortcuts.

Get more information about being disqualified for using Roboform.

Where Does the Roboform Myth Come From?
Technically, Roboform is a macro, which is a term used in rules against automatic entry. So are programs like Texter and your browser's autofill. But that's not generally what sponsors mean when they prohibit automatic entries.

Many people think that calls from unavailable numbers must be scammers or telemarketers, especially if there is no message. Unfortunately, this is a myth.

Many winners have reported winning phone calls where the caller was not identified on caller ID. Furthermore, rules often state that no message will be left.

Reason for the Unavailable Phone Number Myth
Reaching someone by telephone can be very difficult, and some people don't give their real number on sweepstakes entry forms. Sponsors must choose another winner if they can't reach the first name after a reasonable number of attempts. Leaving a message or getting a call-back after the win was awarded to someone else would be awkward indeed. It's a good idea to answer your phone.

This is a disappointing myth, but it's important to be aware of it. You're playing an instant win sweepstakes, and you receive a "Congratulations!" screen. That means you're definitely a winner, right? Sorry, but no.

Origin of the False Win Myth
When you receive a winning screen on an instant win, or a winning letter, phone call, or email, you are actually being notified that you are a "potential" winner. A potential winner is subject to verification, and if the verification fails, you won't win the prize. For example, you could wait too long to respond, you might be ineligible, or the notification could simply be a mistake.

In short, get excited when you receive a win notification, but don't count on it until you become an official winner.

Find out more about being a potential winner.

Many people are rightfully skeptical of large wins coming from no-name companies. But when they receive a letter from Publishers Clearing House or Readers Digest, suddenly that skepticism disappears, and they're ready to pull out their checkbooks to get their multi-million dollar wins... wins that, of course, never appear.

Where Does the Big Name Win Myth Come From? People have a natural tendency to be more trusting with companies they've heard of before. This is even more true when they know that these companies do hold huge sweepstakes (whether they've actually entered those sweepstakes or not).

Unfortunately, anyone can type a company name on a piece of paper. Make sure you verify that your win is legitimate before responding.

Read more about how to recognize and avoid PCH scams.

For some reason, this one gets under my skin every time I see it repeated. (And according to Forbes, even a mayor and Obama staffer said that EdMcMahon was a PCH spokesperson).

And yet, PCH has never hired a celebrity spokesperson. Ed McMahon never represented them, nor did Dick Clark, who also gets attributed to PCH.

How Did the Ed McMahon Myth Get Started:

Both McMahon and Clark represented PCH's rival, American Family Publishing. Because PCH is the more well-known brand, many people get them confused.

Read more about the Ed McMahon sweepstakes myth.