McDonald’s Monopoly: A Timely Move in a Bad Economy

It’s time, once again, for McDonald’s annual Monopoly contest.
For a background, please check out this site.

I found an interesting tidbit at Earth Times, from what I think is a press release. It’s a quote from one of last year’s $1 million winners:

“I couldn’t believe I had just peeled off the most sought after game piece in the MONOPOLY Game at McDonald’s,” said Berry, one of three $1 million winners from the MONOPOLY 2007 Game at McDonald’s. “I have two young children, and I knew that this money would make it possible to not only pay off my student loans, send my parents to Hawaii and buy my dream home, but it would allow me to remain a stay-at-home mom and spend more time with my family. To me, that means the world.”

I have to digress a moment. This woman must be thinking in 1980s terms. Consider her expenses:

-Sending parents to Hawaii: $800 flight, + hotel/resort stay = $3,000 for a two-week vacation

-Dream home: Assuming she lives somewhere where housing is cheap, let’s say she’ll spend $500,000.

-Paying off student loans: A reasonable assumption would be $10,000.

35% taxes on contest winnings, if awarded in lump sum, which are treated as $1 million worth of extra income: $350,000

Total amount of money left:
$137,000. That’s about enough to finance two kids’ public university educations.

UPDATE: The winning amount is disbursed in interest-free $50,000 increments each year for 20 years. The poor winner really isn’t going to get her dream home.

That’s shocking, but not the point of this post. My point is that coupons, contests, and the like are smart ways for businesses to get ahead during tough economic times. The reasons:

McDonald’s Example
-McDonald’s increases its sales, probably significantly.
-Monopoly enjoys co-branding and increased sales.
-McDonald’s offsets most of its costs through higher sales.

In General
-If advertising redeemable coupons (for example, collect 50 coupons and exchange them for a blender), a company can charge retailers to buy the coupons, thus making instant money to reinvest in the short-term. Meanwhile, the company usually doesn’t have to redeem the coupons for at least a year.
-Contests like McDonalds’ lead to spikes in sales, by enticing loyalty and new customers.
-Contests offering points for repeat purchases have a similar effect, with the added benefit that winners often receive goods or services, which can run cheaper for the offering company than money.
-Meanwhile, customers benefit, too: They get to hold on to their precious cash while gleaning benefits from the shopping they do anyway.

I wonder if we’re going to see more games, coupons, and points systems during the coming year.


I hope that McDonald’s monopoly players know that they have higher odds of winning at Powerball*, which of course means they have even higher odds of being struck by lightning.

*The quantities of certain pieces are controlled, making the odds of winning low.

Written by Drea Knufken

Drea Knufken
