Legal Considerations When Running a Consumer Promotion

We’re at the part everyone can agree is just a pain, the law… yeah unfortunately it also has an important place here. 

We’ll try to keep this part short, but absolutely no promises. To start, where is the consumer promotion happening? There are various complications with certain cities, states, provinces, and countries. Considering running a sweepstakes to generate leads? Let’s break down some of the questions you need to ask yourself when planning the campaign. Who is this target audience? Laws and restrictions vary depending on age, in most cases, 18+ is a safe route. Under 18 becomes tricky, as you then need to receive parental permission for those under 18. In the case your target is under 13, there are even more strict regulations to follow including Children’s Online Privacy Protection Act (COPPA) in the US. Part of these requirements involves obtaining ‘verifiable parental consent’ which can be costly and time-consuming. , There are other considerations if a sweepstakes or contest program involves alcohol or tobacco that you’ll need to keep that in mind as well. Trying to collect donations or sell tickets to a raffle? Oof. 

Are you giving away a gift card to your store or valid for your services? Giving away an actual prize or simply cash? Either way, you need to know the ARV (approximate retail value) of whatever you’re giving away! Giving away multiple prizes? You legally must list the ARV of each prize individually, as well as the total prize value. ! Did you know that in some states you’ll need to file documents and pony up a percentage of the total prizing in advance of starting your promotion? Did you know that in some countries winners have to pay taxes and will even go as far as declining season tickets to watch the Houston Rockets play? Yep, it’s happened. 

Looking to run an international consumer promotion? Just because you know the laws in the US (or Canada) doesn’t mean you’re equipped to open up your promotion to other countries. Each country has its own laws on promotions, consumer protection, and data privacy. Make sure you do your research (or save your time and hire a professional) before you make the decision on where your campaign will run.

Not the last thing to think about, but it is the last thing we will mention, How long will you be running the promotion? You need to have a clear start and end date! This must be outlined in advance, although depending on the specifics of the promotion you may have some flexibility in extending the end date.

Was this helpful? We sure hope so! It’s a lot of information, we know. That’s why we suggest you hire a professional. Feel free to let us know if you did not find this helpful and a certain intern will learn. 

To find all of our consumer promotions blogs, you can take a look here!

Vanessa Niragira, Oakville ON, March 2021

---

View All