- May 19, 2016
- Posted by: Seth Heyman
- Categories: Business Law, Marketing & Advertising Law, Regulatory Compliance
Sweepstakes Disclaimers: The Small Print Matters
Sweepstakes, contests, and similar promotions can be an extraordinarily effective tool to create brand awareness and attracting new customers lured by the possibility of winning a prize.
Although the upside of sweepstakes are clear, many businesses ignore the potential downside. All sweepstakes and contests must comply with various statutes, laws, rules and regulations. These compliance obligations include registration at the state level and avoidance of deceptive marketing practices. In addition, to maintain compliance, sweepstakes operators must also take care to include the proper disclaimers and disclosures in the official rules and advertising copy.
Regardless of the medium in which it’s promoted, every advertisement for your sweepstakes must include a legally compliant disclaimer and disclosure statements that address certain key aspects of the sweepstakes promotion. These disclosures must be prominently featured in online ads, and if the sweeps is being promoted by a brick-and-mortar based business, the sponsor must make copies of the official rules containing the requisite disclosures to consumers upon request.
So what should these disclaimers and disclosures contain? At a minimum, your sweepstakes rules must include the following information:
(a) The commencement and conclusion dates for the sweepstakes;
(b) The odds of a winning a prize;
(c) Who qualifies as a participant (i.e., residents of the U.S. over a certain age);
(d) States and territories where the sweepstakes is void; and
(e) A prominent statement explaining that no purchase is necessary, and that making a purchase will not increase the odds of winning a prize.
In addition, it is always a good idea to offer an alternate means of entry (i.e., via mail), to help ensure that consumers are not required to purchase any item.
The FTC has stated that sweepstakes scams are high on its list of enforcement priorities. Thus, it is vital that sweepstakes sponsors take the time to ensure that the requisite disclosures are always included in their official rules.