Misleading Gimmicks from Consumer Reports

You better cut the pizza in four pieces because I’m not hungry enough to eat six.Yogi Berra (allegedly)

The other day, I received a mailing from Consumer Reports. It was soliciting contributions for a raffle fundraiser. The mailing had nine raffle tickets in it. Consumer Reports was requesting that I send back the tickets with a suggested donation of $9 (one dollar for each ticket). The mailing had a lot of paper:

The raffle had a grand prize that would be the choice of an undisclosed, top-rated car or $35,000. There were a number of smaller prizes bringing the total amount up for grabs to about $50,000.

The materials included a lot of gimmicky text:

  • “If you’ve been issued the top winning raffle number, then 1 of those tickets is definitely the winner or a top-rated car — or $35,000 in cash.”
  • “Why risk throwing away what could be a huge pay day?”
  • “There’s a very real chance you could be the winner of our grand prize car!”

Consumer Reports also indicates that they’ll send a free, surprise gift to anyone who donates $10 or more. It feels funny to donate money hoping that I might win more than I donate, but I get it. Fundraising gimmicks work. That said, I get frustrated when fundraising gimmicks are dishonest.

One of the papers in the mailing came folded with print on each side. Here’s the front:

On the other side, I found a letter from someone involved in Consumer Reports’ marketing. The letter argues that it would be silly for me not to find out if I received winning tickets:

It amazes me that among the many people who receive our Consumer Reports Raffle Tickets — containing multiple tickets, mind you, not just one — some choose not to mail them in. And they do this, despite the fact there is no donation required for someone to find out if he or she has won…So when people don’t respond it doesn’t make any sense to me at all.

The multiple tickets bit is silly. It’s like the Yogi Berra line at the opening of the post; cutting a pizza into more slices doesn’t create more food. It doesn’t matter how many tickets I have unless I get more tickets than the typical person.

Come on. Consumer Reports doesn’t care if a non-donor decides not to turn in tickets. What’s the most plausible explanation for why Consumer Reports includes the orange letter? People who would otherwise ignore the mailing sometimes end up feeling guilty enough to make a donation. Checking the “I choose not to donate at this time, but please enter me in the Raffle” box on the envelope doesn’t feel great.

Writing my name on each ticket, reading the materials, and mailing the tickets takes time. My odds of winning are low. Stamps cost money.

Let’s give Consumer Reports the benefit of the doubt and pretend that the only reason not to participate is that stamps cost money. The appropriate stamp costs 55 cents at the moment.1 Is the expected reward for sending in the tickets greater than 55 cents?

Consumer Reports has about 6 million subscribers.2 Let’s continue to give Consumer Reports the benefit of the doubt and assume it can print everything, send mailings, handle the logistics of the raffle, and send gifts back to donors for only $0.50 per subscriber. That puts the promotion’s cost at about 3 million dollars. The $50,000 of prizes is trivial in comparison. Let’s further assume that Consumer Reports runs the promotion based on the expectation that additional donations brought in will cover the promotion’s cost.

The suggested donation is $9. Let’s say the average, additional funding brought in by this campaign comes out to $10 per respondent.3 To break even, Consumer Reports needs to have 300,000 respondents.

With 300,000 respondents, nine tickets each, and $50,000 in prizes, the expected return is about 1.7 cents per ticket.4 Sixteen cents per person.5 Not even close to the cost of a stamp.


4/12/2019 Update: I received a second, almost-identical mailing in early April.

10/3/2019 Update: I received a few more of these mailings.

Footnotes

  1. The price of a stamp at the time of writing can be seen here.
  2. “Consumer Reports has more than 6 million members who read its print magazine and website.”
    Drawn from a CNBC article (archived here).
  3. Consumer Reports runs multiple fundraising campaigns each year. Presumably, these fundraisers compete with one another. A subscriber who gives during the raffle campaign is probably less likely to give in a subsequent campaign than she would be in the counterfactual scenario where the raffle campaign never occurred. Accordingly, the additional, marginal funding brought in by the campaign may be smaller than the total funding brought in.
  4. 47,000/(300,000*9) = 0.0174
  5. 0.0174*9 = 0.1566

26 thoughts to “Misleading Gimmicks from Consumer Reports”

  1. In the most recent mailing. the “CONSUMER REPORTS 2019 RAFFLE”, I noted a gross discrepancy. “What could $60,000 buy you?” in bold orange across the top of an auxiliary slip of paper. Reading down you note
    “… a $500 check every month, all year long, for 10 full years” and later
    “A $60,000 annuity* is a prize that keeps on giving, twelve times a year, all the way ’til 2039.”
    Okay, that’s 20 years !! It kind of voids the entire promise, the way it is composed.
    Or, do they mean that its $120,000 over 20 years?!? lol

  2. I feel the same way as you. Almost every week they are soliciting for money. If it is that expensive to run their tests, then close it down. The government should be funding them.

  3. I’ve looked, but I cannot find any publication of the date the raffle ends and when the winner(s) will be announced. That’s standard practice (by law, presumably) for most sweepstakes and contests.

  4. In the version I received, the official rules on the back of the sheet with tickets clearly states “Sweepstakes beginning 1/1/2020 and ends on 12/31/20” plus info about how and when winners are determined, and how and when winners are notified. The materials also clearly say “No contribution, donation or payment is necessary to enter or win this sweepstakes”. I don’t understand how Consumer Reports benefits from running these sweepstakes at the estimated cost. Do only subscribers get these mailings?

  5. I’m a little perturbed. I recieved one of these in Nov 2019 and thought, “eh, $10 isn’t too bad, I’ll help them out. Plus, I’ll get a surprise gift! It’s probably just an extra book from them or something, but that’s fine.” Well, it’s now January 2020 and I have yet to see a winners list or free gift, BUT I did receive another set of raffle tickets for the 2020 raffle! Guess I’ll be going on the website to not recieve any more tickets!

    (Btw, it’s cr.org/fundraising if anyone needs it)

    1. Thank you for that address I’m going to opt out also. Consumer reports are making money off of their subscriptions so how can they Also be a nonprofit who needs donations to operate??? That right there is pretty fishy.
      Also they run articles on all the sweepstakes scams going on and yet they are participating as well!! Bye bye consumer reports, are used to think they were a quality organization and now I’m not so sure!!!

  6. Testing the products they report on in their magazine surely costs in the tens, if not hundreds of millions of dollars, plus they do not accept advertising nor do they accept goods from the manufacturers, nor can manufacturers pay to have their products tested. Consider only the dozens (100’s?) of cars, trucks, and SUV’s alone they purchase to evaluate, plus the laboratories, testing equipment, the expert personnel required to design and operate the testing equipment, conduct the tests – and write up the results in a manner somewhat comprehensible to the rest of us. That said, I’m sick of the 4 or more time a year raffles. I believe there is one for winter, spring, summer and fall, as well as an annual giveaway. I give when I can, not because I’ve received yet another wad of paper touting yet another raffle, but perhaps they’re useful in reminding me to do so once in a while.

    As to the legitimacy of the raffles, I have faith that CR delivers. You can write for a list of winners, or find them online at: https://www.consumerreports.org/cro/2012/09/consumer-reports-sweepstakes-winners/index.htm Best wishes,

  7. They say winners will be notified by mail yet they don’t ask for an address. just a name. Let’s say you are not a subscriber and your name is John Smith. If John is the winner how do they know where to send the notice that he won??????????

    1. @ Bob, because they know who they mailed which ticket numbers to. Once they select a ticket, they look up who the winner is by the ticket number. So if your neighbor got your letter and put their name on the ticket, you would still be the winner if that ticket was selected.

  8. The numbers on my ticket stubs do not match the numbers on my “bonus” form as required in the instructions.
    I also have not received a “free gift”.
    In a misguided attempt to raise a little money you have apparently alienated many donors by choosing an incompetent gimmick.
    I will no longer subscribe or donate to Consumer Reports.

  9. I too question if they actually give away a car or $35,000.
    Read the recent contest and it stated you have to transport
    the vehicle from their facility. The date of drawing was not specific,
    in or around.such & such date- a year from now. I’ve sent in several entries.
    The non- disclosed prize for entering early
    is additional numbers. This month, I received a small
    magnetic 2020 calendar. One third into the year and they
    sent out a calendar. What a frigging joke ! I have asked that my
    name/address be removed from their mailing list.

  10. What a scam. Grand prize a top rated vehicle. I will never make a donation again. No drawing date of the contest. No gift and no way to see if you won anything. Attempt from consumers report to get money. Their scam I’m sure only turned people off.

    1. Item 7. on the back of the reply form clearly states: “WINNERS LIST: Visit cr.org/winnerslist for a list of prize winners (available after 5/3/21). Of course it’s an attempt from Consumer Reports to get money. Where do you think the money needed to anonymously purchase millions of dollars of products at retail prices comes from? It comes from subscriptions, donations and grants. Also stated in several places within the materials included with the mailing is, “No contribution, donation or payment is necessary to enter or win this sweepstakes.” The entire program is described in detail on the backside of the reply form which had to be sent in to make a donation and enter the sweepstakes. So, what’s up with all the vitriolic comments?

  11. I received a sweepstakes entry today. However, on the back of the return envelope there was this list of items to do, but those items weren’t included:
    Complete and enclose your Car Prize Entry Registration
    Affix green Bonus Prize label to qualify for $5,000 Cash bonus if named Grand Prize Winner
    Keep all your tickets as your receipt

    Please mail before the deadline so we can check your 9 prize numbers

  12. Briana: I received my tickets today (since I had sent the $9) and it said that my free prize was enclosed. I guess my free prize was the enclosed paper on information of healthy ways to eat.

  13. For crying out loud, folks. It is a FUNDRAISER for a nonprofit entity which has done a lot for the consumer over the years. If you don’t wanna play, throw the paper away. Jeez.

  14. Received several of these mailings during this year. Yesterday I received another.
    My concern is that they say they have provided 9 tickets and 9 chances to win.
    But, every raffle ticket has the exact same number. How then can this offer nine chances to win?

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