Scratch and Win Campaigns: How to Run Them Without Killing Your Margin

A scratch and win campaign is an instant-win promotion where a customer scratches a digital or printed card to reveal a prize, with the odds and the prize pool set in advance by the brand. It is one of the fastest ways to lift engagement, and one of the easiest ways to give away margin if nobody does the math first.

This guide covers the parts most scratch and win content skips: how to size the prize pool per play, how to calibrate the win rate, the legal and disclosure basics in the US, Saudi Arabia and the UAE, how to gate entries behind a purchase or a profile completion, and the three ways brands overspend on these campaigns.

What is a scratch and win campaign?

A scratch and win campaign is a game of chance with a fixed prize ladder. The customer earns a card, scratches it, and sees the result immediately, whether that is bonus points, free shipping, a discount or a bigger prize. The instant reveal is the whole point. Unlike a sweepstakes, nobody waits for a draw, so the reward lands while the customer is still in session and can still buy.

Every scratch card campaign, physical or digital, comes down to four decisions. Get these right before you pick a card design.

Scratch and win sits inside the wider gamification toolkit next to wheels, quizzes, streaks and challenges. Before you commit a budget, read our companion guide on calculating gamification ROI before you launch, which sets out the inputs you will need for the prize math below.

Why scratch and win promotions work

Scratch and win promotions work because the reveal is immediate, the effort is tiny, and the moment of uncertainty turns a small reward into an event. A 10 percent code in an email is a discount. The same code revealed under a panel feels like a win, which is why instant rewards are built around rewarding in the moment rather than weeks later.

The risk is that the mechanic works on everyone, including customers who were going to buy anyway. Promotions without discipline are expensive. McKinsey found that consumer goods companies spend around 20 percent of revenue on trade promotions and that 59 percent of promotions lost money, rising to 72 percent in the United States. A scratch card is a promotion with better packaging, so the same economics apply.

The upside is equally real when the campaign is targeted. McKinsey puts the typical revenue lift from personalization at 10 to 15 percent, and Bain's long-running retention research shows a 5 percent increase in retention can lift profits by up to 95 percent. A scratch card aimed at lapsing customers, or at a segment you want to move into a second category, is a retention tool. Pushed at everyone, it is a discount with a nicer animation.

How to do the prize-pool math

Size a scratch and win prize pool by calculating the expected cost of one play, then multiplying by the number of plays you expect. The expected cost per play is the sum, across every tier, of the win probability multiplied by the redemption rate multiplied by the real cost of the reward to you.

Here is a worked example for a store with an $80 average order and 40 percent gross margin, expecting 10,000 plays over a four-week campaign. The probabilities and redemption rates are illustrative, so replace them with your own history.

Two things fall out of this. First, the headline prize is rarely the budget problem. Doubling the gift card odds from 0.5 to 1 percent adds $0.225 per play, a 23 percent jump in cost, and it barely changes how generous the card feels. Second, the break-even bar is explicit. At $32 of contribution per order, a $9,750 pool needs about 305 incremental orders from 10,000 plays, roughly three extra orders per hundred plays against a holdout group. If you cannot credibly expect that, shrink the pool or tighten the gate. The same framework underpins our guide on how to calculate loyalty program ROI.

How to calibrate the win rate

Set the win rate by deciding what a losing scratch should feel like, then fund the winners from the cheapest rewards. The win rate is the share of scratches that reveal any prize at all, and it shapes the experience more than the size of the top prize does.

Practitioner guides often suggest a prize mix weighted heavily to small rewards, for example roughly 70 percent small, 25 percent medium and 5 percent grand among winning cards. Treat that as a starting point, not a rule. The right mix depends on what your cheapest reward is worth to the customer. Bonus points are a good base tier because they cost little and pull the customer back to redeem, which a one-off code does not do. If you have not yet mapped your points economics, start with our guide to setting up a points reward system.

Whatever the rate, make the loss useful. A "try again tomorrow" result paired with a progress nudge keeps the habit going, which is the same logic that makes streak campaigns effective. A blank card with no next step is the fastest way to lose a player.

Scratch and win legal and disclosure basics by market

A scratch and win promotion becomes legally risky when it combines a prize, chance and a required payment, because those three elements together are the classic definition of a lottery. How each market treats the "payment" element is what changes the rules. This is general information, not legal advice, so have counsel review official rules before launch.

On the US side, the three lottery elements and the role of an alternative method of entry are well established, and New York and Florida require registration and bonding above $5,000 in total prizes. In Saudi Arabia, the Ministry of Commerce has been explicit that businesses must not require a purchase as a condition of entering contests or raffles, and in September 2024 it referred 44 businesses to the Public Prosecution for unlicensed contests and discounts. In the UAE, Al Tamimi's overview of UAE sales promotions describes the permit regime and restrictions on cash prizes. If you run loyalty in the Kingdom, our guide to how top Saudi retail brands run their loyalty programs covers the wider context.

How to gate entries: purchase, profile completion or points

Gate a scratch and win campaign on the one action you most want more of, as long as it is legal in the market you run it in. The gate is the real objective. The scratch card is only the reward for completing it.

For GCC brands, profile completion is often the smartest gate. It is free to enter, which keeps it clear of the purchase rule, and the data it collects is worth more than the prize. Our guide to first-party data from loyalty programs explains how to use it once you have it. For purchase gates in the US, pair the card with a minimum order value and exclude already discounted items, and use targeted promotions rather than store-wide eligibility.

The three ways brands overspend on scratch and win

Brands overspend on scratch and win in three predictable ways, and all three are configuration decisions rather than bad luck.

The fix for the second trap is the same as for any retention spend: target a segment and hold back a control group. Behavioral analytics can identify customers drifting toward churn, which is where an instant win buys the most. If the goal is a longer relationship rather than one order, our guide on increasing lifetime value without more discounts is the right companion read.

How to measure a scratch card campaign

Measure a scratch card campaign against a holdout group, because play counts and prizes won only tell you the game was fun. Exclude a random 10 percent of the eligible segment before launch and compare the two groups on the same window.

How Gameball helps

Gameball ships Scratch and Win as a native game with two to eight reward tiers, a probability per tier, a total reward limit that stops claims once each prize is exhausted, and a default of one scratch per customer per day, as set out in the Scratch and Win documentation. Rewards come from the same loyalty engine that issues points and vouchers, eligibility is targeted by segment, and campaigns are triggered through marketing automation for retail and ecommerce and fintech brands. Book a demo to see a scratch card configured against your own prize budget, or check pricing first.

Related reads

• The ROI of Gamification in Enterprise Customer Retention Strategies
• What Makes a Reward Feel Worth It? The Science of Effective Incentives
• Mobile Loyalty Gamification Examples: The Best in The Game

Frequently asked questions

What is scratch and win?

Scratch and win is an instant-win promotion where a customer scratches a physical or digital card to reveal a prize immediately. The brand sets the prize tiers and the odds of each in advance. It is used to drive a specific action, such as an order, a sign up or a profile completion, with an immediate reward.

How do you calculate the cost of a scratch and win campaign?

Multiply each prize's cost to you by its win probability and its expected redemption rate, then add the tiers together. That gives the expected cost per play. Multiply by forecast plays for the budget, then set a hard cap on each tier so the campaign cannot overspend if plays exceed the forecast.

What is a good win rate for a scratch card campaign?

For most retention campaigns, a high win rate of roughly 60 to 85 percent is a sensible default, funded mostly by low-cost rewards such as bonus points, with one rare headline prize. Everyone-wins suits onboarding. Low win rates under 30 percent create excitement but lose players after a few empty scratches.

Is scratch and win legal if customers must buy something?

It depends on the market. In the US, a chance-based promotion that requires a purchase needs a free alternate method of entry. In Saudi Arabia, the Ministry of Commerce prohibits purchase as a condition of entering contests and requires a license. Always have local counsel review the official rules before launch.

Do I need a permit for scratch and win in the UAE?

Promotions in Dubai and Abu Dhabi generally require a permit from the relevant economic department, and cash prizes are usually restricted. Use vouchers, points or products as prizes, apply before launch, and check separately if you operate from a free zone, where different rules may apply.

What is the difference between scratch and win and a sweepstakes?

A sweepstakes collects entries and picks winners in a later draw. Scratch and win reveals the result instantly on each play, using predetermined odds. The instant reveal keeps the customer in session, which makes scratch and win better for driving an immediate purchase or action.