Prizes don't have to cost a lot. People just appreciate winning, so you can give them something cheap to start with. If your forum is focused on a particular city or region, go to a gift shop and pick up some tourist trinkets for a few bucks. For example, in a forum about Chicago you could give away little Sears Towers that only cost $3 at any 7-Eleven.
It's not about the value. People just like getting free stuff.
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