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Rules for Sweepstakes

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If you run sweepstakes, there are some important FTC rules you need to be aware of. Learn about the requirements for sweepstakes in this presentation.

Published in: Law
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Rules for Sweepstakes

  1. 1. Rules for Sweepstakes
  2. 2. Rules for Sweepstakes Fall under FTC scrutiny Need to draft a specialized Terms and Conditions agreement If your promotions fall under the sweepstakes category, you will:
  3. 3. Here is how to know whether your promotion is a sweepstake and whether it is subject to FTC scrutiny. Rules for Sweepstakes
  4. 4. What are sweepstakes
  5. 5. What are Sweepstakes Sweepstakes are a promotion effort where a winner (or winners) receives a prize. Participants in sweepstakes enter the contest by performing a small task such as sharing social media posts or filling out forms on websites. Rules for weepstakes
  6. 6. What are Sweepstakes Publishers Clearing House
  7. 7. Chance; A prize; and Payment by the participant. What are Sweepstakes According to the FTC, a lottery has three elements: The payment element is the main factor that turns a fun contest into a lottery. While sweepstakes are legal, lotteries by private entities are not. In the U.S., lotteries must be regulated and managed by state lottery commissions. Rules for weepstakes
  8. 8. What are Sweepstakes Sweepstakes take a different approach by not requiring a payment or purchase to enter. Rules for weepstakes
  9. 9. Corsair (1) runs frequent sweepstakes on its Facebook (2) and Twitter (3) pages. Corsair (1) Link to http://www.corsair.com/en-us (2) Link to https://www.facebook.com/Corsair/ (3) Link to https://twitter.com/Corsair What are Sweepstakes
  10. 10. Corsair A Facebook post from Corsair only requires liking the post and their page: What are Sweepstakes
  11. 11. Sweepstakes rules from the FTC
  12. 12. No required payments
  13. 13. The lack of payment is an obvious element that separates sweepstakes from a lottery or worse, a fake prize scheme. Generally, if you plan on running sweepstakes as a promotion effort, do not require a payment. No required payments Sweepstakes rules from the FTC
  14. 14. Advertise with caution
  15. 15. While the FTC does not have any specific requirements (4) on how to spread the word about your sweepstakes on social media, there are recommendations regarding social media. (4) Link to http://www.ecfr.gov/cgi-bin/text-idx?SID=175a5a6b52c4e424ba2f36c7c2ddbeb3&mc=true&node=pt16.1.255&rgn=div5 Advertise with caution Sweepstakes rules from the FTC
  16. 16. Instragram First, make it obvious that it is an advertisement. Learn how to disclose this (5). (5) Link to https://termsfeed.com/blog/ways-you-can-disclose-endorsements/ Sweepstakes rules from the FTC
  17. 17. Second, be careful of how you allow consumers to promote your sweepstakes. Advertise with caution Sweepstakes rules from the FTC
  18. 18. If there’s any compensation or additional sweepstakes entries that result from sharing, liking or getting other people to sign up, that needs to be in your announcement. Advertise with caution Sweepstakes rules from the FTC
  19. 19. Examples Sweepstakes rules from the FTC
  20. 20. Terms and Conditions for sweepstakes
  21. 21. You need a separate Terms and Conditions agreement for your sweepstakes. The content of this legal agreement is different enough from your general Terms and Conditions that you use for your website or mobile app. Terms and Conditions for sweepstakes Rules for weepstakes
  22. 22. “No Purchase Necessary to Win”
  23. 23. The rules of sweepstakes must make this statement clearly. Most Terms and Conditions agreements for sweepstakes place this at the top and often in all-capital letters. There’s a good reason why companies make that choice: any inference of a payment or purchase requirement to enter the contest can lead to problems with the FTC. “No Purchase Necessary to Win” Terms and Conditions for sweepstakes
  24. 24. Examples - Amazon Terms and Conditions for sweepstakes Sweepstakes Terms and Conditions • NO PURCHASE OR PAYMENT REQUIRED TO ENTER OR WIN.
  25. 25. Examples - Priceline Terms and Conditions for sweepstakes priceline.com Summer Road Trip Sweepstakes OFFICIAL RULES NO PURCHASE OR TEXT MESSAGING IS NECESSARY TO ENTER OR TO WIN. A PURCHASE OR TEXT MESSAGE DOES NOT IMPROVE ONES CHANCES OF WINNING. STANDARD MESSAGING/DATA RATES, TERMS AND CONDITIONS WILL APPLY FOR ENTRIES OBTAINED VIA MOBILE PHONE/DEVICE. MAY NOT BE AVAILABLE FROM ALL SERVICE PROVIDERS OR FOR ALL HANDSETS. CHECK WITH YOUR SERVICE PROVIDER FOR DETAILS. VOID IN ALASKA, HAWAII, AND WHERE PROHIBITED BY LAW.
  26. 26. Examples - Corsair Terms and Conditions for sweepstakes NO PURCHASE IS NECESSARY TO ENTER OR WIN. VOID WHERE PROHIBITED. Terms in these Sweepstakes Terms and Conditions shall serve as the Official Rules for the Sweepstakes.
  27. 27. Entry procedures
  28. 28. Entry procedures Terms and Conditions for sweepstakes Make the entry procedures to users clear in the Terms and Conditions.
  29. 29. Examples - Amazon Terms and Conditions for sweepstakes
  30. 30. Examples - Corsair Terms and Conditions for sweepstakes ENTRIES No use of any use of robotic, automatic, programmed or the like entry methods will be allowed as well as incomplete entries. Entries from persons who are not eligible to win per these official rules will be disqualified.
  31. 31. Entry participation limits
  32. 32. Entry participation limits Terms and Conditions for sweepstakes Many companies want to limit sweepstakes participation as it can reduce liability issues and also helps companies avoid the complexities that may be involved offering prizes in some jurisdictions.
  33. 33. Examples - Amazon Entry participation limits • You must be an individual legal resident of the 50 United States or the District of Columbia and the older of 18 years of age or the legal age of majority in your state of residence. Limit one entry per person per social media or customer account.
  34. 34. Close dates
  35. 35. Close dates Terms and Conditions for sweepstakes Deadlines should also be clear in the Terms and Conditions of the sweepstakes.
  36. 36. Examples - Priceline Close dates 2. Sweepstakes Period: For all purposes of this Sweepstakes, the Sponsor’s computer is the official clock and all times refer to Eastern Time ("ET"). The Sweepstakes period begins at 12:00:00 p.m. ET on June 30, 2014 and ends at 11:59:59 p.m. ET on July 31, 2014 ("Sweepstakes Period").
  37. 37. Terms and Conditions for sweepstakes Examples - Amazon Close dates • The promotion begins and ends on the dates and times specified in the linked announcement for the promotion (e.g., the post on our Facebook Page.)
  38. 38. Winner notification
  39. 39. Winner notification Terms and Conditions for sweepstakes Detail how winners of your sweepstakes will be notified.
  40. 40. Examples - Amazon Winner notification • Winners will be notified as specified in the linked announcement for the promotion within 5 days of the end of the promotion, and once notified, you will have 24 hours to claim the prize.
  41. 41. Examples - Corsair Winners will be notified by e-mail within five (5) business days of the prize drawing. If a selected winner cannot be contacted, is ineligible, or fails to claim a prize, the prize will be forfeited and an alternate winner may be selected from remaining eligible entries. Winner notification
  42. 42. Others Terms and Conditions for sweepstakes What more you should add to the Terms and Conditions for your sweepstakes is: Prize list Sponsor identification Odds of winning Process for selecting winners Tax responsibility
  43. 43. Terms and Conditions for sweepstakes Rules for Sweepstakes The essence of your sweepstakes Terms and Conditions is communication. Make it a separate document from your general Terms and Conditions agreement and keep it simple. Learn more about the rules on sweepstakes at: https://termsfeed.com/blog/sweepstakes/
  44. 44. Credits Icon from slide 14 created by PJ Souders from Noun Project. Icon from slide 34 created by Chameleon Design from Noun Project.

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