cash "the winner may elect to receive a cash alternative of X". That is a number, it is the winner's choice, and it is the cleanest form a prize can take short of a cash award.
Prize Form / The cash alternative
Clause 02
The clause that turns a thing into money
A cash alternative is the only mechanism in a promotion that removes the resale discount, the delivery chain and the condition in one sentence. Its absence is equally decisive, and there is a second clause readers routinely mistake for it - the promoter’s right to substitute a prize of "equivalent value", which moves value in the other direction.
Claim stub
- Claim
- PF-54-03
- Subject
- Cash or substitution
- Two clauses
- alternative / substitute
- Who chooses
- usually the promoter
Money2 forms: a credit to a balance, a payment to an account in your name
A buyer3 forms: a voucher, a thing with a market, a personalised thing with none
Attendance1 form: an experience that can only be attended, on a date
A condition2 forms: credit behind a condition, points locked to a product
Direct answerA cash alternative is a clause stating that the winner may take money instead of the prize, at a stated value or at the promoter's valuation. Where it exists, the prize is worth that figure. Where it does not, the prize is worth what its form realises. A separate substitution clause lets the promoter replace the prize with one of "equivalent value", and that is not a cash option - it is the promoter choosing the form.
Alternative: the winner choosesSubstitution: the promoter choosesEquivalent value: undefinedNo clause: the form decides
Two clauses that read alike and do opposite things
the winner chooses The cash alternative
The winner is offered a choice, and one of the options is money. The clause normally states the figure, or states how it is calculated, and it is what allows a reader to value the prize as a number rather than as an object. Where the figure is lower than the list value - it usually is - the difference is the promotion's own acknowledgement of the resale discount.
the promoter chooses The substitution right
The promoter may supply a different prize of "equivalent value" if the advertised one is unavailable. Nothing guarantees the substitute is one the winner would have chosen, that a buyer exists for it, or that the value is measured the same way. Read as a risk allocation, this clause moves the risk of a prize being unavailable from the promoter to the winner.
The two are frequently printed next to each other, which is why they are confused. The test is a single word: may take means the winner chooses; may substitute means the promoter does. A promotion can carry both, neither, or only the second, and a reader who wants a number rather than a thing should be looking for the first.
What "equivalent value" usually means
The phrase sounds like a guarantee and reads more like a permission. Four readings are all consistent with the wording, and a promotion rarely says which applies.
- The same list value. The replacement is announced at a comparable retail figure - which, as the value page shows, is not the same as a comparable realisable value.
- The same cost to the promoter. The replacement costs what the original would have cost, which may be a much smaller figure than the original's list value, or a much larger one.
- A comparable category. A different brand, a different model, a different destination - chosen by the promoter, valued at list, and possibly unsaleable for the reader.
- The promoter's own assessment. Where the clause adds "as determined by the promoter" or similar, it is the fourth reading, and it is the widest of them.
When there is no cash alternative at all
Then the form decides, and the reader is holding whatever the ladder described: an object at a discount, an experience with a date, a voucher with a map, or credit with a condition. Two consequences follow that are worth stating plainly.
- The prize cannot be refused for money. Declining a prize does not produce cash; it produces nothing, because the entitlement is to the prize and not to its value. Where a prize carries a tax liability measured on the list value, that is the asymmetry readers feel most sharply: a liability in money and an asset that is not money.
- The resale route becomes the only route. Anything that can be sold can be turned into money at whatever discount the market sets. Where the item is personalised, or is an experience, there is no route at all, and the honest position is that the prize is worth what it does for the reader rather than what it costs to buy.
Worked example - the same prize with and without a cash alternative (illustrative)
Announced prize in both cases: a thing, list value 2,500.00
Case A - no cash alternative. The only route to money is a sale at 62% of list:
2,500.00 x 0.62 = 1,550.00
Case B - a cash alternative of 1,800.00 offered in the terms:
the alternative pays 1,800.00 and needs no buyer, no delivery and no condition
Difference between the two cases:
1,800.00 - 1,550.00 = 250.00
as a share of the list value: 250.00 / 2,500.00 = 10.0%
The clause is worth 250.00 on this prize before anybody counts the time spent finding a buyer, the risk of a delivery that goes wrong, or the tax line measured on 2,500.00 rather than on 1,800.00.
The clause to look for, and the question to ask
look for
watch for
drafting "a prize of equivalent value at the promoter's discretion". That is the promoter's choice, the value is not defined, and the substitute may have no market for the reader.
ask
question Ask which figure the alternative is measured against. Where a promotion offers a cash alternative "equal to the value of the prize", the value is the list figure, and a reader should confirm that in writing before choosing.