Dean Witter, Discover & Co. has launched a $5 million seasonal sweepstakes promotion, with $1 million to go to the grand-prize winner.

In addition, 4,000 people will each win $1,000 when the program ends Dec. 31.

One of Discover's 1.8 million merchant outlets can win up to $10,000 - if it serves the $1 million prizewinner.

The prize includes $5,000 donated to charity and $5,000 for a staff party or a vacation for four in the continental United States.

Designed to Encourage Usage

Eight stores will be randomly selected from those with $1,000 winners to receive up to $5,000.

The contest, designed to encourage usage by the 39 million Discover customers, is open to those who use their cards or mail in an entry without purchase.

People approved for a card during the six-week sweepstakes period are automatically eligible.

Discover said the sweepstakes is in celebration of its most successful year. Net income for the first nine months was $465.1 million, 44% better than in the 1992 period.

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