ask Ask which value is quoted. A promotion that says a prize is "worth" a figure is quoting a list value. The question that changes the decision is what it can be exchanged for, and the answer is usually in the terms rather than the announcement.
Prize Form / The value
Value 01
Two numbers, and only one of them is money
A promotion publishes a list value, and a list value is a statement about what the promoter is giving rather than about what the reader is receiving. The second number - the amount that can actually be turned back into money - is set by a market, a condition or a tax line, and this page is about the gap between them and why it exists.
Claim stub
- Claim
- PF-54-02
- Subject
- The two values
- List value
- the promoter’s figure
- Realised value
- what a buyer pays
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 non-cash prize carries two values. The list value is set by the promoter and appears in the announcement. The realised value is what the award can be turned into: for an object, what a buyer pays for it second-hand; for a voucher, what somebody will pay for the voucher; for an experience, nothing in money at all. A tax line is normally applied to a value near the list figure rather than the realised one.
List value: the announcementRealised value: the formResale discount: the gapTax line: on the list figure
Where the list value comes from
Three different sources feed the same number, and a reader cannot usually tell which one produced it.
- A retail price. The manufacturer's or a retailer's recommended price for a new item. It is a real figure; it is also the price at which nobody may have bought the item, and it does not survive the first day of ownership.
- A cost to the promoter. What the promoter or its prize supplier actually paid, often well below the retail price because the item was bought in a batch, supplied at a promotional rate, or provided by a partner in exchange for exposure. The announcement rarely uses this figure, because it is the smaller one.
- A face value with a boundary. A voucher, a credit or a hospitality package has a nominal value and a set of terms that restrict where it can be used. The nominal value is the announced figure; the boundary is what turns it into a discount.
All three can be true at once, and the number in the announcement is normally the largest of them. That is not deception by itself - it is what a list value means - but it is the reason a reader should ask which figure is being quoted before treating it as money.
Where the realised value comes from
Once the prize is in the reader's hands, its money value is set by whichever of these exists.
a buyer A second-hand market
For a console, a phone, a watch or a car, a buyer exists and the price is public. The discount to the list value has three ordinary causes: the item is no longer new, it is outside retail returns and warranty, and the buyer is taking on risk that a shop does not. That discount is the cost of holding value in the form of an object.
a platform A voucher resale
Voucher resale platforms price a voucher below face value precisely because the buyer cannot choose where to spend it. The discount reflects the same thing the boundary reflects: a voucher is money with a map, and the map is smaller than the reader's life.
nothing An experience
No buyer, no transfer, no refund. A hospitality package or a trip has a real list value and no money value beyond what the promotion paid for it. If it cannot be attended, it is not converted - it is lost, and the terms will say so.
a condition Credit inside a product
Credit carrying a wagering condition has an expected value rather than a value. If the condition is turned over at a game with a margin in the operator's favour, the expected amount that reaches a withdrawable balance is less than the announced credit, and it may be nothing. The bonus-terms desk does that arithmetic in full; this desk only places the form on the ladder.
The figure a tax line uses
Where a jurisdiction taxes a prize, the value the tax is applied to is normally connected to the list figure rather than to what the winner could get for the thing - because the list figure is the one that appears in the promotion's own records. That produces the shape readers complain about most often: a tax liability measured against a value the winner never held in money.
This desk does not answer a tax question and is not written to: liability depends on where the reader is, what the prize is and who is giving it, and the tax desk in this series covers the liability itself. The point here is narrower and structural: the value that is taxed and the value that can be realised are two different numbers, and only one of them can be used to pay the other. A reader who takes a thing instead of a cash alternative is holding a liability measured on one figure and a means to settle it measured on another.
Worked example - an object prize against the same promotion's cash alternative (illustrative)
Announced prize: a watch, list value 1,200.00
To realise it in money, a buyer is needed; the going second-hand price for the same reference is 62% of list:
1,200.00 x 0.62 = 744.00
The same promotion offers a cash alternative of 900.00
Difference between the two, in money the reader controls:
900.00 - 744.00 = 156.00
as a share of the list value: 156.00 / 1,200.00 = 13.0%
Read it as a decision rather than as a shortfall. The cash alternative is the smaller number in the announcement and the larger number in the reader's account, and the difference is the resale discount plus everything the reader would have to do to find a buyer.
What a reader can do with this
step 1
step 2
check Check whether a buyer exists before the prize arrives. Two minutes of searching a second-hand market answers the question better than any assumption, and it is the difference between a 62% recovery and none.
step 3
compare Compare against the cash alternative if there is one. A smaller cash figure is frequently worth more, and the arithmetic above is all there is to that comparison. If there is no cash alternative, the next page explains what that absence means.
step 4
time Value the date, not only the item. An experience has a calendar attached and an object does not. Where a prize includes a date, the realised value falls to nothing the moment that date stops working, and no clause converts it.