Turning Down Sweepstakes Prizes — How and When to Decline a Win
What to Do When Prizes Aren't Right for You
When you enter sweepstakes, you're hoping to win something amazing. But every now and then, you win a prize that you simply can't use. How do you decline prizes you don't want?
Why You Might Need to Turn Down Prizes
Maybe it's a trip that's taking place on a date when you already have something planned, or a new gas range when your house can only support electric appliances, or the prize has an ARV that's so high that you don't want to pay the taxes on it.
In these cases, turning down the sweepstakes prize is your best option.
No one likes to decline a prize. It's disappointing to say no to something you won, and it wastes time and energy for both you and the sponsor. But if you decline a prize, you don't need to pay taxes on it, and you can let it go to someone who will really enjoy it.
Here are some tips about when and how to turn down a prize, as well as how to avoid having to decline prizes in the first place.
How to Avoid Turning Down Sweepstakes Prizes
It's best for everyone involved — yourself, the sweepstakes' sponsors, and the other entrants — if you don't have to turn down sweepstakes prizes. To reduce the chances of having to decline a prize, be picky entering sweepstakes. Think about whether you'll be able to use the prizes offered before you enter.
Here are some further tips for avoiding the most common reasons to decline prizes:
Trips on Dates When You Can't Travel
It's heartbreaking, but sometimes you win an amazing vacation and can't take it because you aren't able to travel on those dates. You can't get time off work, you have another trip scheduled, or there's an illness or special occasion in the family.
You can avoid this one by reading the rules to see if specific travel dates are listed. If there's a conflict, skip entering.
If you do win a prize where this is the case, you might be able to negotiate with the sponsor to choose different dates. This isn't always possible, but it's worth a try.
You Can't Afford the Taxes on the Prize
If you live in the United States, you have to pay taxes on your prizes, just as if you'd earned the prize value by working. While the amount varies depending on your tax situation, a general rule of thumb is that you'll owe about a third of the value of the prize.
If you win a cash prize, this isn't much of a problem. You just pay the taxes out of your winnings. If you win something like a car or jewelry, you may be able to sell the prize to cover the taxes and still end up making a profit. But other prizes, like trips, either can't be sold or are difficult to make a profit on. You may need to decline the prize, if you can't afford the taxes.
To avoid this situation, consider the tax consequences before you enter. A $60,000 trip around the world sounds glamorous, but if you aren't prepared to pay $20,000 in taxes, you should probably move on to another prize.
If you've already won a prize like this, make sure that the ARV is accurate before you decline. See how to dispute an ARV on your taxes for more information.
Too Much Effort Is Required to Claim a Prize
Sometimes, a sponsor will ask you to jump through hoops to claim a prize, like requiring a notarized affidavit for a $1 prize. You might feel like the effort just isn't worth it.
This situation is hard to avoid ahead of time because the requirements aren't always outlined in the rules.
If you find yourself in this situation, you might want to reconsider claiming your prize. A notary sounds intimidating, but there are several places you can go to find free notaries for affidavits. And the hoops might not be so difficult once you try jumping through them.
You Have Short Notice to Use Your Prize
Sometimes you find out that you've won a trip, concert tickets, etc. that must be used on very short notice. If you can't rearrange your plans, you might need to turn down the prize.
To avoid these, check the rules. Sometimes, they'll warn you that you won't have much time to decide if you win.
You can try to negotiate for more time. If that's not possible, turn down the prize as soon as you can, so another winner will have the opportunity to enjoy it.
You Won a Different Prize Than You Intended
Some sweepstakes offer multiple prizes. You may really want some of them, but others might be useless to you for any of the reasons listed above.
This is also a difficult one to avoid ahead of time. If you have to decline, do it as quickly as you can.
Asking for Cash Options
Many people enter sweepstakes to win prizes they don't really want because they assume there will be a cash option — the option to accept the cash value of the prize instead of the prize itself.
This does happen in some cases, but it's not standard. Sponsors certainly won't offer cash options for every prize. In many cases, they've entered into agreements with other companies to offer the prizes, or they purchased them in advance.
It doesn't hurt to ask the sponsor if a cash option is available for a prize you have to decline, but don't be surprised if it's not available..
How to Decline a Sweepstakes Prize
If you need to turn down a prize win, let the sponsor know that you won't be able to accept the prize. Don't just ignore their messages or not return the affidavit — that wastes a lot of time and energy for the sponsor.
Let them know you're thrilled to have won and that you appreciate the prize, but unfortunately just can't accept it.
Before You Turn Down Your Prize Win
If possible, ask the sponsor if you can think it over for a few days. In the case of a large prize with a big tax burden, take the time to consult with an accountant before making your decision. There may be a way of accepting it after all.
For smaller prizes that you can't use yourself, think about whether you could use the prize as a present.
If you truly can't use it, turn down the prize so that another winner has a chance to enjoy it.
What to Do When It's Too Late to Decline the Prize
Sometimes, a prize just shows up at your door, or you didn't realize you can't use the prize until it arrives.
In these cases, it's too late to decline the prize. You'll need to report them on your taxes (if you live in the United States or another country that taxes winners), but there are a few ways to put unwanted prizes to good use:
- Sell the prize on eBay. Hopefully, you'll earn enough to cover the taxes, and maybe more.
- Check out sweepstakes forums for prize exchanges. You might be able to swap it for a prize that suits you better.
- Donate the prize to a school or charity. You'll be giving it a good home and you may be able to deduct the donation on your taxes.
- Use online classifieds to find the prize a good home. Websites like Freecycle or Craigslist can help you find people in your area who are willing to either buy your prizes or at least take them off your hands.
- If you win a gift card you can't use, check out how to sell gift cards without being scammed.