Winning Free Trips: What You Need to Know about Trip Sweepstakes
Answers to Questions that Many Trip Winners Ask
Whether you're looking for some alone time to relax and unwind or you are dying to take your family on a trip they'll never forget, winning a vacation is a great way to see the world (nearly) for free.
Vacation sweepstakes can change lives and broaden horizons. For example, reader Charl shared her story about winning a free trip to Egypt: "I had never been out of North America, had never been on a plane that long," she wrote. "It's been nine months since we got back and there hasn't been a day where I didn't think about this experience. I really feel like it changed my life."
But there are some drawbacks to winning trips.
When You Win Trips, Are They Totally Free?
Some sweepers don't enter to win trips, because even when the vacation is free, it still comes at a cost. How is that possible? Here are some of the hidden costs of free trips:
As with all sweepstakes prizes, you have to pay taxes on your prize to the IRS. If you win a car, you have options to help you make the prize affordable, like taking out a loan on the car or selling it outright. With trips, however, you don't end up with a physical prize that you can sell, so you have to pay the taxes out of pocket.
A good, rough rule of thumb is to estimate taxes at about a third of the prize value. So if you win a $9,000 trip, you can bet on paying about $3,000 out of pocket. That's a lot to pay for a "free" trip, but you will get an experience you'll never forget out of it
With the tax costs to consider, it's a good idea to be picky about which trip sweepstakes you enter. If you're not excited enough about the trip for the taxes to be worthwhile, it's probably just wasting your time. It also helps to look for giveaways that include cash as part of the prize.
Expenses On Your Trip
Most vacation prizes will cover your hotel stay and transportation to your destination. But what about other expenses? You may have to pay out of pocket for meals, local transportation, activities, and souvenirs.
If you look for prizes that include spending cash, some of those expenses can be reduced or eliminated.
Tips and Gratuities
If you win a free cruise, tips and gratuities may not be covered, and they may be an expected part of your trip. You'll also be responsible for tips for housekeeping in hotels, for cab drivers, waiters at restaurants (unless you have a dining voucher), and so on.
Special Taxes on Vacation Prizes
Aside from declaring prizes as income on your taxes, you might also be responsible for travel-related taxes like port fees, hotel taxes, and more. See which taxes do you pay on vacation prizes for more information.
Time Missed at Work
If you work, taking time off might result in a loss of income, especially if you don't have paid vacation leave or if you're missing out on earning tips or commissions.
Watching Your Home While You're Gone
Depending on your circumstances, you might have some expenses involved in leaving your home for a while. Babysitting, pet sitting, or house sitting can cost you some green.
And what about just taking a cash option?
Do Sweepstakes Sponsors Have to Offer a Cash Option?
Although some sweepstakes do offer a cash option, they are the exception to the rule.
Unless it's stated in the rules, sponsors don't have to offer a cash option. and they usually don't. Many times, the sponsor has put together a trip prize package with the help of partner companies, rather than paying for the trip out of pocket.
For example, a hotel may have donated the room or an airline might offer free or discounted tickets in exchange for promotional consideration (aka, free advertising).
Even when that's not the case, the sponsor may have other reasons for not offering a cash option for a trip prize.
There's nothing wrong with politely asking if a cash option might be offered instead of the trip, but pushing any harder for cash if the sponsor says no seems ungrateful, and probably won't get you anywhere. Haggling when the sponsor has already said no is one of the things I recommend you don't do when you win a prize.
So if you can't take a trip you won, and the sponsor doesn't readily agree to a cash option, simply decline the prize. It's frustrating to turn down a prize you won, but it means that the trip prize will go to someone who can use it well, and maybe you'll improve your luck with the good karma.
How Much Influence Do You Have Over the Details of a Trip Prize?
When you win a trip, the sponsor picks out the details of the prize including how long the trip will last and how many guests the winner can take. But can a winner have any influence over those details?
Some sponsors will work with you on making changes to the trip, especially if you're willing to pay for the extra costs yourself. For example, extending a three-day trip to a week-long trip or bringing your child with you on a prize trip may be fine, if the company sponsoring the sweepstakes hasn't already made prize arrangements, and if you pay for the extra hotel nights and any difference in the flight costs.
Check out how to pay for extra guests for tips that might help you with the sponsors.
Do You Have to Actually Go On the Trip?
So let's say that you don't really like to travel, but your daughter or your spouse would just love to go on a trip you run across. Should you enter, and just give away the prize if you win?
Generally, that's a bad idea. Trip prizes are usually not transferable, which means that you actually have to go on the trip if you win. So either bite the bullet and take the trip, or tell your loved ones about the giveaway so they can enter themselves.
Of course, these hidden costs don't mean that you should skip trip sweepstakes altogether. Just make sure that you consider what you're getting into before you enter. If the trip isn't worth the price, there are plenty of other types of sweepstakes to enter.