Competition Cash Alternatives Explained: Are They Fair?
Why cash alternatives are lower than the advertised prize value, how to judge whether one is fair, and what to check before you enter.
Quick answer
A cash alternative is the money you can take instead of the physical prize. It is almost always lower than the advertised prize value, because operators rarely pay full retail price and a winner selling the prize wouldn't get full retail either. A fair cash alternative is close to what you could realistically sell the prize for. Check the exact amount before you enter.
Why the cash alternative is lower
- Headline values are usually retail or list prices. Operators often buy prizes below list price, especially used cars.
- Resale is lower than retail. If you won a car and sold it, a dealer would offer trade value, not the forecourt price.
- Keeping a prize costs money. Insurance, road tax, servicing and depreciation all come out of the prize's value to you.
So comparing the cash alternative with the headline value can be misleading. Compare it with what the prize is worth to you, or what it would sell for.
How to judge whether a cash alternative is fair
- Find the realistic resale value. For cars, check a few valuation tools for both private sale and trade-in prices, using the exact model, age and mileage.
- Work out the cash alternative as a percentage of that resale value, not the headline value.
- Add up what keeping the prize would cost over the first year.
- Decide whether you would actually keep the prize. If not, the cash alternative is the real prize.
What the rules say
The government's Voluntary Code says signatories should provide the advertised prize or a reasonable cash alternative promptly. It doesn't define reasonable. It does say operators shouldn't reduce a prize's value because tickets have sold slowly.
Tax on cash alternatives
For most people, competition winnings are not taxed as income, so a cash alternative is paid in full. If you take a car and later sell it, HMRC treats private cars as exempt from Capital Gains Tax. Property and high-value collectables can be different, so get advice on large or unusual prizes. Read what happens if you win for more.
Red flags
- No cash alternative amount stated before you enter, just "cash alternative available".
- A cash alternative that changes after the competition opens.
- Pressure to decide on the phone straight after winning.
- Terms that let the operator swap the prize for cash at a lower value if tickets don't sell.
Use the cash alternative to compare value
When you compare competitions, the cash alternative can be a more honest measure of value than the headline prize. Enter it as the prize value in our odds calculator to see how much value you get back for every £1 spent if the draw sells out.
Frequently Asked Questions
Why is the cash alternative less than the prize value?
Headline prize values are usually retail prices. Operators often buy below retail, and a winner selling the prize would get less than retail too. The cash alternative reflects that.
Do I pay tax on a cash alternative?
For most people, no. Competition winnings are generally not treated as income. Get advice for very large prizes or if you win regularly as part of a business.
Can I choose the cash alternative after I win?
Usually, yes. The winner normally decides between the prize and the cash. Check the competition terms, as a few prizes have no cash alternative.
Is a cash alternative of 80% fair?
It depends on what the 80% is measured against. Against a car's list price it may be generous, because the car's resale value could be lower. Compare it with realistic resale value instead.
Sources
- Voluntary Code of Good Practice for Prize Draw Operators, GOV.UK
- Capital Gains Tax: what you pay it on, GOV.UK
Last updated November 2026. RaffleScout does not give tax advice.