Businesses usually do online giveaways as a fun way of offering prizes or promoting a product and therefore get in exchange an increase in brand awareness, traffic, new customers or gain loyalty.
These are free from control under the Gambling Act 2005. However, we recommend that you seek legal advice before launching a giveaway as there is a blurry line to in fact be offering an illegal lottery.
For hosting a giveaway online, you have two options:
- Free prize draw: the entry is free and the winner is chosen at random (although must be free to enter, you may say that a promotional product must be bought to enter the draw).
- Prize competition: the winner must exercise a significant amount of skill, knowledge or judgment.
Key provisions to include:
Regardless of the platform, promotions must be run fairly and marketing communications for the promotion must not mislead. The best way to do this is have clear terms and conditions and rules of entry.
- State who the promoter or promoters are and add an address.
- What the prize is and the available amount. Communicate any specifications on the product/service that may be relevant for the giveaway.
- The launch and end date. You must stick to your deadline, even if you don’t get many entries. Include the date, year and time (include time zone if relevant).
- Entry method and entry restrictions. Mention any restrictions such as age or location and the explanation on how to enter. It is also important to state how many entries people can a person make and in the case of competitions, specify the property and rights over the entries.
- How the winner/s will be chosen:
I. Random – you must demonstrate that the winner was selected at random. This can be done with tools that produce verifiably random results, by an independent person, or under the supervision of an independent person.
II. Voting – you must state this from the start and specify the rules under which the votes are eligible.
III. Judging – the criteria for selecting winners must be specified from the start and at least one of the judges should be an independent person.
- Prize delivery. Communicate how and when the winner will be informed and if there is any deadline on the winner to respond and claim the prize. Also determine the time frame for sending the prize to the winner.
If you do ask for personal details, you must comply with the Data Protection Act and if you are going to use this information for marketing purposes, users must be notified up front.
Finally, you must inform about the participants rights to register a formal complaint with the Advertising Standards Authority if the Terms and Conditions are not compliant.
How can we help?
Linkilaw Solicitors are here to help. Our friendly and experienced legal team are well-equipped to support you on the creation of terms and conditions that are relevant for your business. Book a call with our legal teamfor a time that suits you.
Our legal commentary is not intended to be a comprehensive review of all developments in law and practice. Please seek legal advice before applying it to specific issues or transactions.
