When you enter a contest or sweepstakes, and read the rules, you will usually see the statement approximate retail value (“ARV”) of or estimated Retail Value (“ERV”) of.  So, what is ARV and ERV?  The sponsors may not know the exact price of the prize when they will be awarding it, when they write the rules weeks or months in advance.  To protect themselves, legally, they use the ARV or ERV statement within The Official Rules.  This allows for example; fluctuations in airline tickets or sales on electronics, etc.

Let’s look at the ARV from the the Olympic contest we won.  The rules stated: The approximate retail value of each Grand Prize Package is $40,000 (plus all applicable taxes) based on departure from St. John’s, Newfoundland.  The approximate retail value will vary depending on the departure location.

What was our trip really worth $40,000?  Well, let’s begin with the fact we were going to the Olympics.  You can bet the airfare, hotel stay and event tickets were not going be discounted in any way, and probably even inflated.  We estimated; the airfare was $1,000 per person as we departed from Toronto, the rooms were $250 per night, including a breakfast buffet along with a $75 VISA gift card per person to cover the balance of the meals, 4 tickets to 5 events worth $2580, plus 4 bags full of Wonder branded swag worth about $500.  Adding all our ERVs up we get $10,880.  That is a far cry from the sponsor’s ARV of $40,000.

Am I disappointed?  A wee bit, 1) because the rules stated that all meals would be covered; meals for four (4) people provided throughout duration of Grand Prize, (may include buffet; catered; event location meals; sit down; and/or meal vouchers) including location of each meal, will be selected at the sole discretion of Sponsor. I am not sure how the sponsor calculated we could eat out for 5 meals for $75, when each meal out averaged $25 per person.  Heck, 2 hot dogs and 1 soda pop at a hockey game was $14!

Plus, 2) the rules stated it was a 4-day trip for four.  We flew out mid-morning on Day 1, so we “lost” half-a-day, and we flew out very early on Day 4, “losing” another day.  Therefore , we only had 2½ days in sunny Vancouver.

So, is it important to track the ARV or ERV?  Not for Canadians, as we do not pay income tax on our winnings of any kind.  It is especially important for American sweepers to track the true values and costs of their prizes (aka Fair Market Value “FMV”) because income tax is due on all sweepstakes wins.  (NOTE: Tax is only payable on FMV, not ARV or ERV.)  Had I been an American, you bet I would be showing the FMV was closer to $10,000 than $40,000!