Guide
Would You Take the Prize or the Cash Alternative?
A cash alternative can be more useful than the advertised prize, but the choice is not always available and the cash amount may be lower than the headline value. Start with the competition terms and the promoter’s written offer, then compare the real value, restrictions and costs of each option.
Do not assume that every winner can demand cash. Some terms offer a fixed alternative, some allow the promoter to substitute cash only when the original prize becomes unavailable, and others provide no alternative at all.
Confirm exactly what has been offered
Keep the winner message and a copy of the terms that applied when you entered. Check whether the choice belongs to the winner or the promoter, the deadline for responding and whether accepting one option is final.
- Is the cash amount fixed in the terms?
- Does the promoter have discretion to offer a substitute?
- Are there separate claim forms or identity checks?
- When will the cash or physical prize be delivered?
- Can the prize be transferred to another person?
CAP guidance says significant conditions should be available before or at entry. These can include whether a promoter may substitute a cash alternative and how winners will be announced. A choice introduced after the draw should therefore be confirmed in writing rather than inferred from an advert.
Compare like with like
The advertised value may be a recommended retail price, while a cash offer is a fixed amount chosen by the promoter. The physical item may also be discounted elsewhere. Compare the cash offer with the price you could realistically pay for the same specification, not simply the largest number in the promotion.
For a product, record the exact model, warranty, delivery arrangement and any accessories included. For vouchers, check the expiry date, participating retailers and whether unused value is lost. For an experience, include the dates, location and costs that the winner must cover.
Allow for the costs of accepting the prize
A physical prize can create expenses that are easy to overlook. A car may require insurance, collection and ongoing running costs. A holiday may exclude airport transfers, meals, travel insurance or spending money. A large household item may need installation or storage.
Cash is simpler when those costs would make the original prize difficult to use. The prize may still be the better choice when it provides an experience you genuinely want and the included package would be expensive to arrange independently.
Be careful with fixed dates and travel
Travel and event prizes often have the least flexibility. Check the names allowed on the booking, passport and visa requirements, departure airport, accessibility, blackout dates and what happens if the event is postponed. A non-transferable trip with fixed dates may have little practical value if you cannot attend.
Ask the promoter before choosing if the written offer does not explain cancellation, guest changes or additional costs. Do not book separate travel until the prize arrangements are confirmed.
If you plan to sell the prize
Private resale takes time and the amount received may be below retail price after marketplace fees, delivery, insurance and negotiation. Check whether the prize or warranty is transferable and never advertise tickets, vouchers or memberships that the terms prohibit you from reselling.
Selling a valuable personal possession can also raise tax questions. GOV.UK says Capital Gains Tax may apply when a personal possession is sold for more than £6,000, although exemptions and special rules apply. This is separate from the general tax treatment of receiving an ordinary hobby competition prize. Keep records and obtain individual advice for a valuable or unusual item.
Claim through an independently verified contact
A genuine choice between cash and a prize does not remove the need to verify the winner message. Match it to a competition you entered and contact the promoter using details obtained from its official website. CAP guidance prohibits making a consumer incur a cost to claim a prize.
Do not disclose a banking password, PIN or full card security details. A legitimate bank transfer may require an account name, sort code and account number, but confirm the request and privacy arrangements with the promoter first.
A simple decision worksheet
- Write down the exact cash amount and payment date.
- Find the realistic current price of the physical prize.
- Subtract delivery, travel, installation, insurance and resale costs.
- Check expiry dates, fixed dates and transfer restrictions.
- Decide whether you would buy or use the prize yourself.
- Keep the terms and confirm your choice in writing before the deadline.
The best option is personal. Cash may provide flexibility, while the original prize may deliver greater practical or emotional value. The important step is to compare the offer actually made, rather than the headline value alone.
Official guidance
- ASA and CAP guidance on promotional marketing.
- CAP guidance on significant competition conditions.
- GOV.UK guidance on personal possessions and Capital Gains Tax.
Read our guide to what happens after a competition win and our general information about tax and competition prizes.