Bancography | Branch Planning, Marketing Research, Brand Strategy, Products & Profitabilty

Marketing Clinic: Handling Lengthy Sweepstakes Disclosures

Reader Question: We want to run a sweepstakes and need help on the compliance part. Our attorney advises a 3-page disclosure, which won’t work on a postcard. Can we put the basic contest rules and regulations on postcard and add “For a complete list of contest rules and regulations go to website.com” and be in compliance?


Answer: Ahh, the joys of lawyers, laws and legal advice. This is a tricky area.

Most legal experts tend to agree that the official rules for any sweepstakes should contain at least the following disclosures:

  • No purchase necessary.
  • The alternative method of free participation.
  • Complete name and address of the sponsor and promoter of the contest.
  • Number of prizes, the accurate description of each prize, the retail value of each prize, and the odds of winning each type of prize. (In many cases the odds will depend on the number of eligible entries received, however, if a particular number of entry forms, direct mail pieces, or similar items will be distributed, the odds should be stated according to that number.)
  • Geographic area of the sweepstakes and/or who is eligible to participate in the sweepstakes.
  • Opening date and scheduled termination date of the sweepstakes.
  • Whether all prizes offered will be awarded, and how the prizes will be awarded.
  • Manner of selection of winners, and when a determination of winners will be made.
  • Where and when a list of winners can be obtained.
Kiosk & Display | Migrate Your Digital Signage to Windows 7

Julia C. Archer, an attorney with Enns & Archer, says television and radio ads can have a shortened version of the official rules:

  • No purchase necessary.
  • Void where prohibited.
  • Any special eligibility restrictions.
  • The scheduled termination date of the promotion.
  • If the advertising will occur before the start date of promotion, the short form advertising must also include the opening date.
  • Instructions for how consumers can obtain a copy of the official rules.

Archer says these can either be printed on the screen in the case of TV, or read aloud.

For mailed pieces, the Direct Marketing Association has its own set of guidelines for sweepstakes disclosures you may want to review.

Rules governing sweepstakes vary from state to state

First, while there are a few laws governing sweepstakes at a federal level, each state has its own set of rules and regulations.

Back in 2009, Florida revised its game promotion statute to lessen the burden on marketers running sweeps. The statute had originally required any operator of a game of chance with an aggregate prize value exceeding $5,000 to “publish the rules and regulations in all advertising copy.” Most marketers understood this to mean that the full official rules for a sweepstakes must be printed in anything related to the campaign. Here’s how Robert J. Driscoll, an attorney with Davis Wright Tremaine, described the updated Florida statute:

“The statute as amended now provides that so long as the print advertisement includes a website address, toll-free telephone number or mailing address from which the full rules can be obtained, only the ‘material terms’ of the rules need be disclosed. This change brings Florida’s sweepstakes law in line with those of most other states, where typically the use in an advertisement of abbreviated rules that disclose only a few key terms (such as the end date of the promotion, the eligibility requirements, a description of how to obtain full rules, and a statement that no purchase is required) is permitted.”

Kiosk & Display | Migrate Your Digital Signage to Windows 7

Things can get really confusing when you compare one state’s rules to another. For instance, the California Department of Consumer Affairs says that “all contest and promotional puzzles and games must clearly and conspicuously disclose each of the following”:

  • All the rules, regulations, terms and conditions of the contest.
  • The maximum number of puzzles or games which may be necessary to complete the contest and determine winners.
  • The maximum amount of money, including postage and handling fees, which a participant may be asked to pay to win each of the prizes offered.
  • The date(s) upon which the contest will terminate, and upon which all prizes will be awarded.
  • Whether future contests or tie-breakers, if any, will be significantly more difficult than the initial contest, and the method of determining prize-winners if a tie remains after completion of the last tie-breaker.

Interpretations of rules vary

There are thousands of marketers who don’t slap disclosures on every single piece tied to sweepstakes. It may or may not be legal (or “in compliance”), but nearly every sweepstakes says “You can find a complete list of rules and regulations for this contest [here].” You can find marketers who only put their full sweepstakes disclosures in one place, whether that be online at a single web page or a single branch. Again, it may or may not be legal, but it’s a popular path to take among marketers.

One thing to keep in mind is that lawyers and marketers do not think alike at all. Indeed, many times their interests are in direct conflict. The marketer’s top priority is to get as many entrants into a sweepstakes as possible, which is why they prefer shorter disclosures that make the contest look less complicated. The lawyer’s job, however, is to do everything in their power to keep everyone out of court (especially themselves). Their job isn’t to give you (the marketer) advice you want or like. They will always play it safe, and cover their butts. They know if you run the full disclosure everywhere, then you can’t turn around and sue them for faulty legal advice.

Bottom Line: Every marketer should be intimately familiar with the requirements for sweepstakes in their state and at the federal level. Don’t just take one lawyer’s word as gospel. Become an expert yourself. You could be dealing with an attorney who doesn’t have any/much experience with sweepstakes rules, and/or is cautious to the point of overkill. If you have a 3-page disclosure (which sounds excessive), you may need to revise your promotion or find a different attorney.

Oops! We could not locate your form.

Search For More: Contests & Sweepstakes, Tips & How-To,

All content © 2014 by The Financial Brand and may not be reproduced by any means without permission.

CUNA Mutual | TruStage Auto & Home Insurance

Speak Your Mind

*

Next article recommended for you
google_adwords