07 May Five Legal Issues to Consider when Planning a Sweepstakes
A promotional sweepstakes is a great way to engage consumers and spread awareness. However, there are several issues that you need to be aware of to ensure that your brand is legally compliant. Here are five things to be aware of when planning a sweepstakes:
1. Deceptive Marketing is a No-No!
In 2001, Publishers Clearing House agreed to pay millions of dollars to 26 states to settle allegations of deceptive marketing. This brought about a significant change in the way sweepstakes are managed. In the case of Publishers Clearing House, they adjusted the way they marketed to the public. Phrases such as “guaranteed winner” or “you’re a winner” were done away with and new messaging was brought in like “you have not won yet” and “buying won’t help you win.” Publishers Clearing House listened and so did other companies. Language like “enter to win a trip” should no longer be used but instead replaced with “enter for a chance to win a trip.” When running a sweepstakes, make certain the actions a participant must take to receive a chance to win are clear.
2. You Might Need an AMOE
At first glance, it may seem like a new social term. Unfortunately, it’s not nearly as exciting, but it is necessary sometimes. AMOE stands for Alternate Means of Entry. This term is typically seen and/or heard with discussions of consideration (requiring a purchase in order to obtain an entry into a promotion). For example, “Get Rich with Trump” was a sweepstakes run in conjunction with NBC’s show, “The Apprentice,” where viewers texted whom they thought would get fired for a chance to win a prize. Since SMS rates would apply, the sweepstakes also offered a free online means of entry. Otherwise, it wouldn’t have legally been a sweepstakes. When you have to pay to enter, you enter lottery territory, and that creates a whole other set of issues you probably don’t want to deal with.
3. Including Canada
While it does require some additional time and budget, including Canada may benefit your reach and isn’t that difficult. One legal requirement, which may seem a little strange to some, is that in order to be declared a winner; a resident of Canada must correctly answer a skill-testing question without a mechanical aid. Courts have agreed that a four-part mathematical test such as “150 plus 30 divided by 2 minus 12” is enough to qualify as a skill-testing question. There are some additional requirements for running a promotion open to residents of Canada. Always be sure to consult legal counsel prior to planning.
4. Going Global?
Including additional countries can get a little tricky and definitely requires more time added into promotional timelines. Using language that simply states a promotion is open globally won’t cut it. Each country has its own set of rules and regulations. Spain, for instance, requires a promotion ONLY to be open to their residents. Australia requires the random drawing to be conducted within the country’s borders. Additionally, for each country included, additional time and budget will be required to route Official Rules through legal counsel to ensure a promotion is run legally.
5. Platform Roulette
Google+, Facebook, Twitter, LinkedIn, Pinterest, YouTube… the list continues to grow. As social networks emerge, companies are looking to extend the reach of their promotions to additional platforms and each has their own set of terms. Some are more detailed than others but to stay legally compliant, it is essential to know what can and cannot be done. For example, did you know it goes against Facebook’s terms of services to run a contest or sweepstakes directly on your Facebook wall? Also, Facebook features may not be used to notify winners. Instead companies should utilize an alternate way of communication (such as a promotion email account) to notify winners. I highly recommend referencing each social network’s terms before pitching a promotion to ensure it’s not against a platform’s terms of service.
Sweepstakes are an excellent way to reward loyal consumer and engage new ones. These were just a few items to be aware of when planning a sweepstakes for your brand, always consult legal counsel prior to launching a consumer facing promotion to make sure to be compliant.
