Publishers Clearing House

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Publishers Clearing House

Type	Private
Founded	1953, Port Washington, New York
Headquarters	Port Washington, New York
Key people	Robin B. Smith, Chairman Andrew Goldberg, President and CEO Rick Busch, Chief Financial Officer
Industry	Publishing
Revenue	▲US $$530 Million(2006)
Net income	▲US $? Million (2006)
Employees	420 (2006)
Website	www.pch.com

Publishers Clearing House (or PCH) is a multi-channel direct marketing company, that offers discounted magazine subscriptions and household merchandise to consumers with the chance to enter to win one of many ongoing sweepstakes. As a direct marketing firm, it has no retail offices; its operations are concentrated in several physical offices, including its world headquarters in Port Washington, New York. It reaches consumers through direct mail offers and online communications supported by its web site.

Publishers Clearing House is a limited liability company staffed by 400 employees and is headquartered in Port Washington, Long Island, NY the same town where the company founder Harold Mertz started it all 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 charitable trusts. According to Crain's New York Business, nearly 50% of company profits benefit charitable causes ranging from the arts to social services to the environment. The New York Botanical Garden, Lincoln Center for the Performing Arts, the National Audubon Society and the Alzheimer's Disease and Related Disorders Association are just a few of the major beneficiaries.

1 History
2 Controversies
- 2.1 PCHBlingo
3 References
4 External links

[edit] History

Publishers Clearing House was founded in 1953 by Harold and LuEsther Mertz 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 use.

Starting in 1985, the company’s product offerings were broadened with a wide range of merchandise including household and personal items, home entertainment, collectibles and more. 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 offerings.

[edit] Controversies

In the 1990s, controversy arose against the sweepstakes industry with Publishers Clearing House, American Family Publishers, Reader's Digest and Time Inc. all coming under regulatory scrutiny for marketing techniques that were alleged to cause consumers to believe a purchase would increase their chances of winning. Settlements were reached with many of the states requiring that the sweepstakes promoters provide clearer disclosures regarding chances of winning and the fact that a purchase does not increase chances.

The first 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.” ^[1]

This was further confirmed, when as part of its June 2001 Settlement, Publishers stated, as quoted in the Settlement, "PCH acknowledges that its mailings were confusing to some consumers in the past. PCH regrets and apologizes for injury suffered by such consumers".

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.^[2] 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 he 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 deceived by PCH.^[3]^[4]

More recently, in 2003 The Attorney General of Oregon sued Publishers Clearing House, alleging that "conducting promotional sweepstakes, Publishers Clearing House makes willful misrepresentations to Oregon consumers in order to convince them to participate in sweepstakes, purchase products, or order subscriptions".

[edit] PCHBlingo

In July of 2006, Publishers Clearing House teamed up with internet search engine Blingo, a website that gives away prizes should users enter a search at the "correct time", which is a pre-defined time triggering the awarding of the prize.