SCA Answers Common Questions

To help you make the most of SCA’s services, we’ve asked founder Bob Hamman and Vice President of Sales Sheila Murphy Brian to answer some of the more common questions our representatives receive. And as always, if you have additional questions or need help with any aspect of your promotion, feel free to give us a call at (888) 860-3700 or e-mail us at info@scapromo.com.

Sheila Murphy Brian
Vice President of Sales

Q What is contingent prize coverage/prize indemnity?
A Think of it as coverage for you to purchase in case of a winner in your chance or skill based promotion. It is a way to protect yourself against an unexpected financial burden. With prize indemnity, you can plan your promotion costs in advance.

Q Why do I need prize indemnity with my promotion — why not just cover the promotion myself?
A Offering a contest with a large prize is an effective way to attract consumers and build interest in your company and product. Most companies budget a small amount for prizes if they are putting up the prize money themselves. With contingent prize coverage/prize indemnity, you can offer a large prize for a fraction of the actual prize cost. For example, depending on the type of contest and the odds, coverage for a $1 million prize could cost anywhere from $10,000 to $200,000.

Prize indemnity helps you cut through the clutter of advertising by offering your customers a unique, eye-catching prize for considerably less money than the prize itself. Prize indemnity is also a way to make a third party responsible for writing the prize check. When you go with SCA, you know the prize payment is prearranged and guaranteed.

Q What is over-redemption, and why do I need coverage?
A Over-redemption coverage protects against unexpected costs. An over-redemption expense occurs when a consumer takes action on an offer you’ve made — whether to mail in a coupon for a free watch, to use a ticket for a movie, or to redeem the cost of a candy bar. The problem arises when more consumers than you’d planned on decide to redeem the offer.

Here’s an example of how over-redemption coverage works: Sony opted for over-redemption coverage for a Sony Movie Cash offer. To increase sales of Sony videotapes and audiotapes, they offered Movie Cash inside its Sony products - worth $3.50 off the price of a movie ticket. To stay on budget and have a fixed fee, it secured over-redemption coverage from SCA. Movie Cash expanded Sony’s retail presence and resulted in triple-digit sales increases during the promotional period. With SCA’s over-redemption coverage, Sony could rest assured that all of their redemptions were covered, regardless of the consumer response.

Q I have an unusual promotion, and I’m concerned SCA won’t be able to cover it.
A For the past 17 years in the business of prize coverage, SCA has been a recognized industry leader and innovator. With our experience and expertise, we’re able to provide coverage that will allow you to maximize your promotions. We’ve assisted with many unique programs — from the Taco Bell® “Think Outside the Park” promotion, which offered every American a free taco if a batter hit the ball out of the ball park during the World Series, to promotions based on how much snow falls over the holidays, to an upcoming 7 UP ® contest that involves a half-court shot that the contestant must make while hanging upside down.

“SCA is always willing to ‘think outside the box’ and provide prize coverage and assistance for unusual, exciting promotion ideas,” says Bob Hamman.

Q How does SCA set fees?
A We base our fees on three components:
  • The value of the prize being offered
  • The number of contestant attempts
  • The probability of a winner

Q My promotion isn’t based in the United States. How can SCA provide coverage?
A SCA’s full line of products and services are available worldwide through our European subsidiaries and global independent distributors. Our distributors are familiar with SCA’s services as well as local laws and regulations.

Q I want to do a promotion with a really big payout. How do I know SCA can provide the coverage?
A With SCA, large contests are secure and affordable. We provided prize coverage for the first and only billion dollar online promotion in history. We’ll underwrite programs of any size, and arrange the coverage for your prize or over-redemption program through our high-limit risk partners or commercial insurers and re-insurers, such as AIG (American International Group), North American Specialty (a Swiss Re company), Chubb, and Lloyd’s of London.

We pride ourselves on offering a quick payout no matter what the prize. With over $92,000,000 in claims paid, we bring integrity, innovation, and experience to every case we service.

Q I’ve never done a promotion before, and I’m not sure where to start.
A Start by giving us a call or e-mailing us your promotional ideas. Our clients often tell us that one of the best things about working with SCA is our full range of services and consultation. We can help you to analyze your objectives and offer suggestions or brainstorm ideas. Whether you’re a Fortune 100 company, an agency, or a sole proprietorship, SCA can help with everything from promotion ideas, to planning, rules, bonding, and execution. It really helps level the playing field for smaller companies — it’s like having your own promotion planning staff.