Who exactly was winning the prizes offered in competitions run across the US for six years by McDonald’s? When the FBI arrested 8 suspects all became clear. For the story and the lessons for prize promoters everywhere click here
When August 2001
A 25 year relationship between promotion marketing agency Simon Marketing and McDonald's came to an abrupt end when 100 FBI agents spread out across the States to arrest 8 suspects in a price promotion scam allegedly masterminded by one Simon Marketing employee. No McDonald's employees were involved, said the FBI. During an alleged six year, $13m fraud, a gang rigged two long-running McDonald's promotions in the US (McDonald's "Monopoly" and "Who Wants to be a Millionaire?") so that only members of the gang won the top prizes.
In a massive damage limitation exercise, McDonald's is offering customers a chance to "win every dollar that has been stolen". Over 5 days, US customers will be offered 5 prizes of $1m each and 50 of $1000,000 to be given away at randomly selected McDonald's restaurants.
Why this matters
For sheer audacity, scale and longevity, this promotion marketing fiasco goes straight into the top echelons of the all-time promotion marketing disaster chart. One aspect that is immediately striking is that the fraud took so long to detect, particularly for an organisation of this size and efficiency. If such a corporation can fall victim in this way, what hope is there for the rest of us? America's answer to our “Campaign” magazine, "Advertising Age" has three particular suggestions for minimising the risk of suffering a similar fate. The first, never allow one person to stay in charge for long periods of distributing winning tokens. Rotate the job or contract it out to a security or accounting firm. Second, before appointing any promotion marketing agency to handle promotions of this kind, be very selective and make comprehensive background checks into the agency's credentials and the individuals who will be involved in handling the account and running any promotions. Thirdly, once an agency has been appointed, continue to conduct independent background checks on a regular basis. Depending on your level of paranoia, these could extend to discreet regular investigations into the lifestyles of agency employees who are responsible for handling promotions. The sudden purchase of holiday homes in Bermuda may alert you to something being amiss! The final question to ask here is whether McDonald's face-saving promotion will be enough to ward off the threat of the dreaded "US class action." One imagines the claim might be couched in terms suggesting that by failing to detect the fraud, McDonald's negligently deprived participants of the chance to win the relevant prizes and should pay damages for breach of contract as a result. On an individual basis, the value of a lost chance to win a prize where the odds against winning were no doubt considerable, may of course be minimal. If multiple claims are brought, however, then the amounts involved could start to escalate.