In 20 years of parties, we have never really had any problem getting people to come in costume. At first we used to put "costumes strongly encouraged" on invites, but we don't anymore.
We have a costume contest that the guests vote on by ballot (they can't vote for themselves) and we give away $50 gift certs (like Bed Bath and Beyond and Home Depot for best female and male costume) and then a "hosts award" to our own personal favorite that my wife and I choose. Usually a bottle of good wine or something.
Personally, the costumes we see at our parties are one of the biggest reasons I keep doing these parties. Our guests REALLY get into it and for that I am grateful.
I guess I'd say if you guest don't come in costume and you want them to, then "adjust" your guest list...
I just put "Come in costume and high spirits" on my invites this year. Also the guy that came last year without a costume and refused to play any games didn't get an invite this year. Seriously, why go if you don't want to dress up and participate? I would rather have people not come if they don't like Halloween or having fun.
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