Publishers Clearing House (PCH)
is a multi-channel
direct marketing company
offers discounted magazine
and household merchandise to consumers with the chance to enter to
win one of many ongoing sweepstakes
direct marketing firm, it has no retail
offices; its operations are concentrated in several physical
offices, including its world headquarters in Port
It reaches consumers through direct mail
offers and online communications supported by its web site.
Publishers Clearing House is a limited liability company
by 400 employees and is headquartered in Port Washington, Long
Island, NY, the same town where the company founder, Harold Mertz,
started the company from his garage. The street adjoining the local
post office in Port Washington, LuEsther Mertz Plaza, is named
after Mr. Mertz's wife. Upon passing of Mertz and his immediate
family, the company was passed to ownership by a number of
Publishers Clearing House was founded in 1953 by Harold and
and their daughter,
Joyce Mertz-Gilmore. Mertz had worked for Look
magazine and believed that
magazine subscriptions could be sold in a more efficient manner by
bundling them together in a single mass mailing offering the lowest
introductory prices. With mailings offering consumers an array of
discounted subscription offers, the company soon became the largest
magazine circulation agency in the industry.
Following on the success of the famous Reader's Digest
sweepstakes introduced in
1963, Publishers Clearing House launched its own sweepstakes
in 1967 as a way to draw attention
to the magazine deals in company mailings. In the late 1980s the
company began awarding sweepstakes prizes in live recorded moments
featuring the Prize Patrol, a team of PCH employees that travels to
locations awarding prizes with balloons, champagne, flowers and a
big check with cameras recording the event for commercial
While the company’s product offerings were broadened with a wide
range of merchandise including household and personal items, home
entertainment, collectibles and more in the mid 1980s, magazines
sales accounted for the majority of the company's sales until the
early 2000s. Merchandise now accounts for the majority of
Publishers Clearing House sales. The company launched its website
in 1999, providing online means to enter the Publishers Clearing
House sweepstakes and shop for magazine and product
By February 2000, however, amidst bad publicity from lawsuits that
would eventually be settled for more than $52 million and an
acknowledgement that it had deceived consumers, the company’s
magazine and merchandise sales plummeted by more than 30 percent.
The plummeting sales, bad publicity, and high legal costs caused
the company to lay off a quarter of its 800-person work
As reported by the New York Times, late in 2008 PCH expanded its
traditional direct mail and online offers to more youthful channels
such as Twitter and iPhone application. According to the New York
Times article of December 22, the objective of these new offers was
to bring young customers into PCH’s world as part of an overall
effort to collect information on Web users, show them
advertisements and use the registration information for PCH’s
In 2009, the odds for the top prize in Publisher's Clearing House
Giveaway #1400 (a prize of ten million dollars) were 1 in 1.75
billion, the worst the odds have ever been for a PCH
The Prize Patrol is the team from Publishers Clearing House that
knocks on the door of a recent entrant of the company's sweepstakes
and surprises them with the news that they have won a large cash
prize. The Prize Patrol winner notifications have been a staple of
the company's advertising, and has been parodied on late night
television shows such as Saturday Night Live and The Tonight Show
and referenced in numerous network sitcoms.
In the 1990s, controversy arose against the sweepstakes industry
with Publishers Clearing House, American Family Publishers and
Reader's Digest all coming under regulatory scrutiny for marketing
techniques that caused consumers to believe a purchase would
increase their chances of winning. An example of this was the
statement "No Purchase necessary to Enter
", instead of the
required "No Purchase necessary to Win
". Settlements were
reached between Publishers Clearing House and 48 states requiring
that the sweepstakes provide clearer disclosures regarding chances
of winning and the fact that a purchase does not increase chances
In 1994, PCH agreed to pay $490,000 to 14 states to settle
allegations that it used deceptive advertising in its annual
sweepstakes. The company agreed to stop using the word "finalist"
on most solicitations and to employ the phrase "final round" only
in the last weeks of the promotions. Some states had reported that
all persons receiving sweepstakes entries were identified as
finalists. PCH also agreed to explain to consumers that if they
were dropped from the mailing list they could write the company to
be reincluded in the sweeps and then entitled to all entry mailings
produced for the next 12 months.
One of these actions was an investigation sparked by a lawsuit
against Publishers Clearing House in Iowa determined that “… more
than 1,900 Iowans had purchases of $1000 or more from PCH in 1996
or 1997, or possibly both, according to PCH's own records. [Also]
289 Iowans made purchases of $2500 or more in one or both of those
years. [Another survey by the same office] of almost half of those
Iowans revealed that 83% were age 65 or older.”
In August 2000, Publishers Clearinghouse signed an Agreement with
23 State Attorneys General to pay $18 million in restitution to the
23 states, some to be given back to 15,000 consumers who spent more
than $2,500 each trying to win the sweepstakes. It also agreed to:
* include in all mailings a Sweepstakes Facts sheet that includes odds of winning, deadlines, prize
values, and quantity of prizes offered.
* not call a consumer a winner unless the consumer has actually won.
* when saying someone could be a winner, state in equal-sized type the conditions necessary to win.
* send "no purchase necessary" notes to consumers spending $1,000 or more a year.
* survey those spending $2,500 or more to make sure they understand they need not buy to enter.
* discontinue sweepstakes mailings to any surveyed recipients who continue to believe that their odds of
winning are enhanced by purchases.
* not use a document designed to simulate a check unless the face of the document clearly states it is
not a check.
One and a half years later, in June 2001, in connection with a
comprehensive settlement brought on by a wave of consumer
protection lawsuits by Attorneys General from Texas and 25 other
states, PCH agreed to pay $34 million in fines, penalties and
restitution, including $19 million to be paid as restitution to
consumers who were high activity spenders and deceived by
Texas Attorney General John Cornyn commenting on this Settlement,
stated it contained "An acknowledgment, for the first time,
from PCH of the harm done in the past by its deceptive practices,
and an apology for that harm.
More recently, in 2003 The Attorney General of Oregon sued
Publishers Clearing House, alleging that: "conducting promotional
sweepstakes, Publishers Clearing House makes wilful
misrepresentations to Oregon consumers in order to convince them to
participate in sweepstakes, purchase products, or order
subscriptions." The matter was resolved by agreement.
However as recently as July 2008, Iowa Attorney General Tom Miller
issued a warning to seniors in his state, concerning Publishers
Clearing House and their marketing tactics:
"Iowa Attorney General Tom Miller has issued a warning to seniors
in his state to be wary of sweepstakes mailings that make it appear
they are close to winning a major sweepstakes prize." Iowa AG Warns
Residents About Publishers' Clearing House goes on to say that "He
singled out Publishers Clearing House, saying the company's
mailings suggest the chances of winning may go up if they order
more merchandise or magazines."
Publishers Clearing House was a competitor to American Family Publishers
that ran similar sweepstakes. The two companies were often mistaken
for each other, with Ed McMahon and Dick Clark, the spokespeople
for AFP, mistaken for representatives of the more well known
- ^ "Miller Asks Court to Order Publishers Clearing House to
Cooperate with Investigation or Stop Operation in Iowa." Iowa
Attorney General (news release (2000-01-28). Retrieved on
- "Spitzer announces landmark settlement with Publishers Clearing
House." NY Attorney General (news release)
Retrieved on 2008-02-02.
- ^ "Wisconsin’s case against Publishers Clearing House."
Wisconsin Dept. of Justice (2001-06-26). Retrieved on
- ^ "Texas, 25 States reach settlement with sweepstakes giant."
Texas Attorney General (2001-06-26).
Retrieved on 2008-02-02
- ^ Publisher's Clearing House - a Clear Scam July 21, 2008 by
Sara Ross publishers_clearing_house_a_clear_scam.html Retrieved on