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Friday, March 2nd, 2012
I feel rather conflicted over a current promotion.
One of my favourite retailers, a coffee shop that happens to
have a location a mere 2-minute walk from my apartment building, is doing their
annual promotion where if you purchase certain sizes of hot beverages you
receive a contest cup that enables you a chance to win food prizes, gift cards,
or more tangible items. This year’s promotion, the bigger prizes include
digital cameras, camping equipment, 3D televisions, and cars. The part that I
raise a quandary over is something my girlfriend questioned about at the start
of this year’s promotion.
She raised the concern that since to obtain one of these
contest cups is to make an actual purchase of a hot beverage – the cost ranging
anywhere between $1.40 to just over $4; depending on the size and type of drink
you’re ordering – that this could be constituted as a form of gambling. At
first, I blew it off; thinking that it’s just an added incentive for those who
go to the establishment to buy a coffee or hot chocolate. However, the more I
think about it, in essence, it is a game of chance.
Within the advertising, they do mention the odds that your
contest cup will be a winner: 1-in-6. But with any game of chance, the ability
to actually score a winning cup is completely random. There is no absolute
guarantee that you will obtain a winning cup within your first 6 purchases.
What’s more, some of the prizes they do offer is a “free donut”, which could
also be redeemed for a free cookie or muffin should the lucky individual choose
to do so. This category encompasses 11.75 million prizes, but here’s the catch:
while people are paying $1.40 and up for their beverage, the usual cost for a
donut, cookie, or muffin ranges from 95 cents all the way to $1.16. So while
you might consider yourself lucky to walk away with a sweet treat, your
winnings actually cost less than your original purchase. In short, you’re
losing on a comparative basis while the company is making a small trade-off
profit.
However, there is a possibility where a player could make a
minute gain and score one of the 35.25 million “free coffee or latte” cups that
enable the possessor to redeem for any type of hot beverage the chain offers in
any size. This means there is the chance someone could pay $1.40 for a small
coffee, find out they’re a winner, and then return in a future visit and walk
out with a $4 large Mocha Latte for free, like I happened to last night. It
sounds enticing, but let us evaluate this on a grander scale.
Even though the promotion touts 47 million food prizes, they
are just a small bone compared to what consumers could truly aspire for: the
gift cards, digital cameras, camping equipment, 3D televisions, and cars. If
you were to take the number of prizes offered amongst these 5 groups that
amounts to 31,140 prizes combined. A reasonable prize pool in itself, but
remember, this discounts the aforementioned 47 million food prizes and the fact
that the overall odds are 1-in-6. If you were to remove the in-restaurant edible
items, you would have to recalibrate the odds. What most consumers tend to
ignore is the fact that throughout the contest’s reach of all of Canada and
some parts of the United States, there are the total of over 285 million cups
available to be “in play” during this promotion; OVER 285 MILLION. Basing that
number with the “Tier 2” prizes, your actual odds of walking away with a
non-food prize is actually 1-in-9,180 approximately. Feel lucky now?
Regardless, people will still flock to the chain during the
promotion. Primarily because they enjoy the coffee, but also the enticement of
winning a prize is there. However, if people really knew the odds of winning
something other than a free coffee or donut, they might think twice about
plunking down a couple bucks for their morning Joe. As for me, I think I will
curtail the impulse to venture over frequently during the promotion. Besides,
factoring in the free coffee I won last night, my record is 1-for-8 so far this
year. Those expenditures add up after a while.
