Beware of Christmas Giveaways

I’m not telling you to avoid Christmas giveaways. I’m not telling you that Christmas giveaways are bad things at all. Before you participate in any contest or purchase anything as part of a Christmas giveaway, there are a few minor things I’d like to point out so you can actually enjoy what you receive.

Read the Fine Print

The fine print is the smaller print that you’re supposed to ignore, if that option is left up to the people advertising the giveaway. Disclaimers and rules are required to be published with advertisements, so the marketing folks really don’t have a choice in the matter as far as putting them there. They will, however, put them there in such a way that they’ll most likely get overlooked.

The majority of advertisers aren’t trying to pull a fast one on you, but there’s always that very small percentage of them who will try. How would you feel if you found out, after you won something like a Mexico vacation, that you couldn’t receive it because of something in the fine print?

Responsibility for Payment of Taxes

I’ve seen this happen quite a bit with charity raffles, but not too much with giveaways and sweepstakes. You, as the winner, may be responsible for payment of taxes. If you are, it should be listed in the rules or the fine print.

If you win a Vintage Telecaster Bass Guitar, for example, how would you feel if you couldn’t afford to pay the taxes for it?

Shipping Costs

In some giveaways, the winner is required to pay shipping costs. In some cases, the shipping costs can be higher than the value of the prize, depending on the shipping origin and destination.

Advertisers and prize sponsors sometimes use inflated shipping costs to offset the cost of the prize on their end. It’s disreputable and can usually be spotted, but it happens.

Equivalent Cash Value

Many sponsors offer an equivalent cash value for prizes won. Christmas giveaways are no different. If you think you can’t afford the taxes or the shipping costs for the prize you’re attempting to win, check the rules and other fine print. You may be able to elect the equivalent amount in cash instead of the prize.

Another option is to sell the item you win in order to pay the taxes and put some money in your pocket. I’ve this happen several times at a yearly charity raffle — a car was won and then sold to pay the taxes, putting several thousand dollars into the pocket of the winner.

And the point is?

Always read the rules and the fine print. It doesn’t matter if the Christmas giveaway is advertised in a newspaper, a store coupon listing, or online. The same rules apply almost everywhere.

[Originally published in December, 2008]

*** By the way, happy birthday to me, my 52nd ***

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38 Responses to “Beware of Christmas Giveaways”

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  1. dan@lacoste sweater says:

    Hey man. Thanks for the article. I hate scammers but they are really all over the place.

    • Richard@Free Online Shop Creator says:

      Hey,

      I am behind on my christmas presents, I need to go get me some lol. Only got about 2 and still another 12 or so to get.

      Wish me luck!
      Thanks again, Richard.

      My latest blog post: Start Selling Online

  2. hey RT,
    I love the bumble! Well, I’m man enough to admit that I love him now, but he scared the heck out of me when I was a little kid watching Rudolph the Red-Nosed Reindeer.
    Anyway, excellent post about “free” giveaways (nothing in life is “free” if you ask me!). It seems many people aren’t aware that they are responsible for the tax on any prize won, which often can force one to sell the prize just to pay the tax. Still, I suppose that’s better than nothing.
    Thanks again for the picture of the bumble. Reminds me that I need to get a Christmas tree pretty soon.
    Steve, aka the trade show giveaways guy

  3. You see the same sort of thing on eBay a lot – a really low starting bid, but high postage charges. I can see why it works, but it turns me off because it’s underhanded.

    My latest blog post: How to stay safe online

    • Tim says:

      It might seem like eBayers are ripping people off, and sometimes they are. On the other hand, they have it harder than you think. I sell things on eBay, and postage or shipping has ripped me off because I didn’t get the facts on how much it would cost. The item went low and my listed shipping fee was too low. There are also eBay fees. Seller loses.
      What most sellers do is find out how much the item will cost to ship, then add a small fee to package it and deliver it to the post office depot. I know everyone expects us to do all that for free, but packaging materials cost money, gas costs money and time is money. Why bother selling things if all I am doing is donating all my time and energy to give you something for a dollar? Shipping is expensive.

      My latest blog post: Steve, Guru of the Trade Show

      • Point taken, and I’ve got nothing against sellers charging a reasonable amount for packaging etc. My comment was aimed at those charging way more than average P&P for similar items.

        My latest blog post: How to stay safe online

  4. hari says:

    It’s like the stores that advertise “up to 50% off on select items”; the only thing is that the items you select will have only 5% or 10% off.

    My latest blog post: Boxi and Panjo – Working Out

  5. steve says:

    hey RT,
    I think Rodney has a great comment above about the people on eBay that may have a low (even one penny) price, but then overcharge for shipping. I HATE THAT!
    And I agree with Hari that if a store says “up to” 50% off, I can pretty much guarantee that nothing I want will be 50%, over even close. I thing the phrase I am looking for is, “oh, that one is regular price.”
    And to throw in one more rant, why can stores get away with saying “FREE with purchase of…” If you have to buy something, the other thing really isn’t free. And why can they say, “Buy one, get one free”. I just want the free one, not the buy one. Be honest and say 50% off, minimum purchase two.
    ~ Steve, aka the ranting trade show guru ;)

    My latest blog post: King Corn

  6. kouji says:

    good points these. i really do like the contests which allow you to choose a cash equivalent over the actual prize. :) would much rather take the dough and spend it on something i’ve been looking to get, as opposed to winning a prize that may be something i don’t really have a use for. not that common a situation in the philippines though.

    My latest blog post: portable pa speaker

  7. Gini says:

    I totally agree. So many people who’ve been scammed probably wouldn’t have been if they’d just paid more attention to what was right in front of them.

    My latest blog post: New CommentLuv Badge – For Every CommentLuving Blogger Out There

  8. Jenny@bingo descriptions says:

    Excellent tips, I agree, we must to read everything twice or more if you need it, I’m a advertiser and I know that some times a giveaway is not free at all or they have many conditions so we have to be very careful.

  9. Kris says:

    Yeah,
    all shops during this season try to trick us into buying their stuff, which is not of the best quality.
    That’s why I buy only things that I really need, and don’t look at anything else.

    My latest blog post: Sony Bravia XBR KDL-52XBR6 52-Inch 1080p 120Hz LCD HDTV

  10. jack says:

    You Right, I find a lot of tricks like this even in some sites if you give them email, you’ll get mega spams! beware!

  11. Scott says:

    Interesting post. I often wonder if anyone ever wins the so called give-a-ways. Marketing and advertising executives are a very clever bunch. It’s a “buyers beware” market out there and if it sounds too good to be true . . . well, it probably is.

  12. jim@gucci wallet says:

    Man, I hate small print. If everyone wasn’t so dishonest you wouldn’t have to even write this post. You used to be able to trust people to some extent but it seems a lot more difficult these days.

  13. Its amazing what they can get away with in the small print. They know that most people will never read it, in fact they make it so dry, long and complicated they are trying to make sure people do not read them.

  14. i just goes to show you that most people will do just about anything to make a buck or two. My uncle once won a cruise in a Christmas giveaway competition. to make a long story short, he ended up loosing 100 dollars and not going on the cruise.

    My latest blog post: Spinnere

  15. Dressup Games@Dressup Games says:

    I never trust any free give aways cause they are never free and usualy a scam

  16. Mia@Discount Pefume says:

    The thing with Ebay is and I could be wrong but I think they are actually hurting ebay too. Ebay gets a percentage of the sale and if the sale is only one cent, thats not much. I don’t think ebay gets a cut of shipping.

    • Tim says:

      @ Mia : to put an item up for auction, you pay a listing fee. Then after it has sold you pay your percentage. So a lot of the time the only winner is eBay!
      There are a lot of different fees that sellers might pay, to get their listing in bold print or highlighted or to add extra pictures. It isn’t all profit for the seller. But it sure seems like it is for eBay.

      My latest blog post: How to Make a Beer Gift Basket

  17. Bill says:

    Nothing in life is free and in many cases they want personal info to badger you by mail, phone, and E-mail to upsell you on something. Doing this around the holiday’s just makes them Grinches!

  18. aaron says:

    Scammers are starting to use these giveaways to prey on folks around the holidays. More so I think since the economies are down. I think your fine print advice is definitely something to keep in mind.

  19. Mickymar says:

    I agree, beware on giveways..Many will scam and promise everything but deliver something so different than what was set forth.

  20. Buyer Beware, as the old saying goes. Those fine prints are a pain to find and even painful to read, but it would do you good in the long run.

  21. Isabel says:

    I understand your point…reading the rules and the fine print is always important. I agree that shipping costs can sometimes be higher than the value of the prize…plus the taxes, ouch! That’s why, if there’s an option to elect the equivalent amount in cash instead of the prize, go for it. I’d rather get the cash equivalent and buy what I really want than get the prize and pay double for the shipping and taxes.

  22. Ben says:

    Good post, its a shame people fall for these kinds of things at Christmas time without reading the small print and ending up spending much more than they thought they would.

    Ben

  23. mark says:

    ALWAYS read the fine print and the rules. Very important!

  24. steve says:

    hey RT,
    It seems based on the number of comments so far that this post is one of your more popular posts. I wonder if it is the bumble, or that people just love “giveaways” and “freebies” (but what does free really mean?) :) I know I’ve got a bag or two of free trade show giveaways that I’ve collected at trade shows over the years, but how many neon envelope openers or glow-in-the-dark keychains does one really need. I guess as many as you can collect, as long as they’re FREE!
    ~ Steve, a humble bumble fan and loyal UV minion

  25. Chris says:

    To be honest, I am always somewhat leery of all kinds of giveaways. Goes back to the motto, there is no free lunch.

  26. Paul says:

    This could apply to credit card offers to. If you get a low interest credit card offer make sure to read the fine print, because many will miss that the rate will jump up after a couple of months.

    And talking about scams. I’m glad the FTC is moving in to closing out those fake spyware scan programs. If you haven’t heard about it you should read this article before clicking on any links that pop up on your desktop.

    http://www.techdirt.com/articles/20081210/1708343081.shtml

    My latest blog post: Break Up Movies For The Holidays

  27. Oliver says:

    Thanks a lot for this advice! I agree, there will be more and more people giving stuff away around this time, but don’t be put off too much :) Just do what this post says!

  28. jim says:

    I like giveaways but I always make sure that I read all that I can about teh prize before I enter anything. That way I am able to know exactly what to expect. These are all good tips. Thanks for sharing!

  29. Tom says:

    Some give aways have the option of cash but it never seems to be the amount the prize would cost. I read article today about 2 companies that offer free samples or give away and they had people sign up for meberships and charge credit cards with out them knowing.

    Raffles and contest are fine but watch out for others.

    My latest blog post: los angeles cheap dsl.

  30. Eric says:

    Few things in life are free…the only thing I take for free at the store are free food samples.

  31. There actually is a lot of things in life that are free. I get free stuff from my mom all the time. :)
    You just don’t want to accept any gifts from people you don’t know or don’t trust.

  32. ben says:

    but who can you trust then? If you only trust your mom you won’t get anywhere in life.

    I think christmas giveaways are great! Last year i actually got an iphone from one of those giveaways. No trouble, everything worked out great!

  33. Richard says:

    Haha LOL.. very funny one :)

  34. Kersti says:

    Thanks for sharing this post and it was quite interesting to read it.I have receive many a times nice Christmas giveaways but still some times the shipping cost charges are more than the actual cost of the gift.This is very annoying and i get very irritated about this thing.But still this has happened only some time in a blue moon.