The loser volunteers for a children's story-time reading hour at the local library, in a wholesome league-approved costume, with full commitment to character voices. The kids are a brutal audience with no idea why this adult is here. Librarian approval required; librarian amusement guaranteed.
Budget note: this one costs nothing but dignity, which makes it a strong pick for leagues that would rather spend the pot on the champion than on the loser's downfall.
Seen in the wild: fantasypunishments.com