I just want to add my .02 cents here. I do not have accumulative prize programs when I run a promotion, but not because we get a higher profit. I don't run them because our parents don't like them. Basically, you could purchase "Items ABC..." for about $25, but your child has to sell almost $1000 to get them free. The kids always want the last two or three prizes and it is a bit defeating to them when they realize they can't sell that much.
Here is what I do instead: The sponsor provides a participation prize for every student, always the same thing (usually the first item in an accumulative prize program structure). I ask my sponsor to provide X-amount of prizes (usually 10-15, sometimes more, sometimes less depending on whether or not they are paying for the pizza parties). These prizes are won via a raffle. In order to get a ticket for the raffle, you must sell at least 3 items. For every 3 items you sell, you get a ticket. I get the local Walmart and/or Kmart to pony up a couple $25 gift cards for the two students (one for grades 1-3 and one for grades 4-6) who sell the most items. I get a local bank to pony up a couple savings bonds. I get the sponsor to donate their items, the stores to donate their items, the bank to donate their items... The kids sell just as much with a whole lot less disappointment. The parents like it better when they don't have disappointed children.
My theory is this: Every child can sell 3 items (one to Mom, one to Grandma, and one to Mrs. Jones next door). I have almost 100% participation this way. When I ran accumulative prize programs, I never had such participation, I always had complaints about high pressure sales to earn prizes, complaints came in about how cheap the prizes are, etc. The children don't miss the cheap prizes because they never saw them to begin with.
Our profit went up, our students weren't under any huge pressure to sell, parents were happy, we made more money with less hassle. It is a win-win situation for us.
After speaking with at least 20 different FR companies, It appears that 75% of them will give you a higher % profit from your FR (although many declined to state a figure over the phone)when you tell them that you DO NOT want their prize program. The few companies that were candid (honest) enough to quote said that your profit would go up another 10-20% of the gross sale amount, in some cases to a total profit of 60-70% of the gross.
I don't know about everybody, but that extra 10-20% extra income ($1,000-$2,000 for us) is looking pretty appealing against another year of cheesy cheapo prizes. We could provide 5-10 student events for FREE if the kids can do without the frisbees and light-up pens.
We still have not received our "Limo Lunches" from our K. BEICH rep from SEPTEMBER!! Why put up with all the competition and hassle of the prizes (sorry, my opinion!). We could provide a Special lunch from McDonald's, Domino's or Chuck E Cheese (with an appearance of a Costumed Character) for the entire school and not spend $1,000.
So, to make a long story short, yes, the prizes are free, but in reality, you are paying an inflated price for them right off the top of your fundraiser's gross income. You can do better; Negotiate for a better deal - They need you and your School's $$$!
Almost every company we've ever used or looked at using offers their own incentives. Our school however chooses not to do incentive programs. We try to encourage people to participate, but don't make it mandatory and because we don't encourage kids to just "hit the streets" but to instead sell to family, friends, and parent's coworkers, we don't feel incentives fit well. The company we started using a couple of years ago understood completely and offered to give any child that just participated in the fundraiser a prize. Everyone got the same thing and they were all thrilled.
That said, if you look through the company's promotional material, it may say something about incentives, otherwise ask your sales rep.
