LAPD manhunt reward money: Could it pay off?

Marketplace Contributor Feb 11, 2013
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LAPD manhunt reward money: Could it pay off?

Marketplace Contributor Feb 11, 2013
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The manhunt in southern California for ex-police officer Christopher Dorner has prompted a $1 million reward for information leading to his capture and conviction. It’s one of the biggest rewards ever offered by a local government, and has already generated more than 600 tips. 

The reward money was assembled from a unusual variety of sources, including the L.A. Dodgers baseball team, the F.B.I., six anonymous donors and lots of local governments. Los Angeles County is considering adding another $100,000 to the pot, according to spokesman Tony Bell.

“It’s a good investment,” Bell says. “It’s an investment in public safety and a cost savings from having to have a killer on the loose, more lives lost, more resources expended.”

Rewards can also bring publicity to a case, reaching people who might have valuable information, and giving them an incentive to come forward.

“It’s — how do I say this? — free money,” says Gene Ferrara, a retired police man on the board of Crime Stoppers in Cincinnati. That group is part of a nationwide nonprofit that offers cash rewards raised by donations, to useful tipsters. “They’re not out working hard digging a ditch for eight hours. They just provide information, and they get money for it.”

Ferrara says cash rewards lead to hundreds of arrests each year, many of which turn in to convictions.

Still, millions of dollars in reward money goes unclaimed around the country. Why would people turn down “free money”? For one, people fear risking their own safety if they get involved, and the bigger the reward, the harder it is to remain anonymous, says Ferrara.

“If it’s a million dollar reward, the IRS is going to want their cut. That’s income,” he says. “So the police department’s got to report who you are to the IRS.  You can’t be anonymous.”

There’s another risk with a high price tag, says Adam Alter, a professor of marketing and psychology at New York University. If you’re a friend or family member of a suspect, and you’re on the fence about turning in someone you love, a big reward might actually backfire because “you’re turning it in to an economic transaction for someone’s freedom, which I think is for a lot of people quite offensive,” Alter said.

Alter suggests that sometimes it’s better to keep money out of it, and let doing the right thing be its own reward.

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