Digest Stakes Future on Loyal Readers, Not Cash Giveaways

After giving away millions in cash prizes for 41 years, the Reader’s Digest sweepstakes is being dropped as a circulation tool, the company said Tuesday.

At the same time, Reader’s Digest is trimming its guaranteed U.S. circulation by 1 million copies to 10 million copies and is promising to keep it at that level for five years.

The company is hoping such a loyal readership will be more attractive to advertisers, spokesman William Adler said. Among the subscribers who will be “de-emphasized” are those who are in arrears, are part of bulk mailings or third-party recipients, he said.

Reader’s Digest started using sweepstakes as a magazine promotion in 1962 and made extensive use of them through the end of the last century to sell the magazine and other products. The company was one of the four largest users of sweepstakes in the country.

In all, the Chappaqua-based Reader’s Digest gave away $200 million in cash in the United States and millions more overseas, Adler said.

In 2001, the Reader’s Digest Assn. reached a settlement with 32 states, agreeing to pay $8 million to remedy what prosecutors said were deceptive sweepstakes marketing practices.

The publisher made no admission of guilt.