This post was originally published in 2016, but due to the high number of visits it receives, it has been updated to include reference to the GDPR data law which came into effect in May 2018. Please note, this blog post can only contain general principles and must not be considered as legal advice. Your organisation should have its own GDPR policies, so speak to your Data Protection Officer or legal team for clarification.
Giving something away is often seen as a good marketing tactic, and indeed it can be if you’re using it as an opportunity to raise your profile or build your database, for example. After all, who hasn’t put their business card into a glass bowl at an exhibition in the hope of winning an iPad?!
However, many companies I speak to are unaware that there are certain rules they need to follow, and that there are differences between competitions and prize draws.
- A competition requires some element of skill to enter – for example, answer a question, or complete a puzzle to qualify to enter. This entry process must present a barrier to success, so that a significant number of people entering would not succeed. If there isn’t sufficient skill involved, it shouldn’t be classed as a competition.
- A free draw requires no skill, just luck, and is free to enter. (There can be a paid-entry option, but free entry must be offered too and there are tight conditions attached – check the Gambling Commission website for details).
- A lottery is a prize draw where entrants are required to pay.
Legally, a competition and a free draw don’t come under the scope of the Gambling Act 2005, but lotteries do. So if you plan to sell tickets for something where the outcome is a matter of chance, you are running a lottery. Lotteries are regulated and require a licence, which means if you are a commercial organisation running the lottery for the purposes of your own promotion you’ll probably be on the wrong side of the law.
But for most marketing purposes the idea is to glean data and give something away without requiring anyone to pay anything. In these instances it’s still important to be clear about whether it’s a competition or a draw, and use the correct terminology to avoid any confusion.
Terms and Conditions
Your promotion needs to have clear terms and conditions (Ts&Cs) which should include:
- who’s running the draw or competition – the Promoter
- how people can enter
- what they are required to do to participate
- how long the draw/competition is open
- if there are any limits on participation
- what the prizes are, and if alternative prizes are available
- how a winner will be chosen, and what happens if they don’t claim their prize
- how to find out who won, and whether winners will be used in publicity
- what happens to the data of those who participate (this needs to tie in with your GDPR Privacy Notice)
- the right to cancel the draw or competition
- the laws of which country will rule in the case of any disputes.
You need to think through all the possibilities thoroughly before you launch your draw or competition, and make sure everyone involved in running the competition is aware that Ts&Cs exist and what they say. Entrants to need to know that there are Ts&Cs, and where they can read them, and have a copy to take away if they want.
Another thing to consider is data. If consumers are giving their data to enter the competition (eg, email address), don’t assume that you can use that data for other marketing purposes. GDPR stipulates that consumers must give clear, informed consent about how you can use their data. For email addresses, considering both GDPR and The Privacy & Electronic Communications Regulation, consumers need to clearly opt in to marketing emails, if you want to email them in future; and you need an audit trail to prove consent. You also still need to give them the chance to opt out in future when you email them. Remember to keep the data of all entrants secure and separate, so one entrant can’t see the data of another. For business email addresses, the law surrounding email use is different and you may be relying on ‘legitimate interest’ as your legal basis for processing the data. The key point is, be clear about your legal requirements, transparent about how you will use whatever data you glean, and ensure all data is treated with respect and confidentiality.
If you’re running a competition on a social media channel, you need to be aware that these channels also have their own regulations for running competitions. For example, Facebook’s rules stipulate that competition entrants can be required to “Like” a post and “Follow” the organisation, but must not be asked to “Share” a post or tag a friend in order to enter. See the Facebook guidelines link below for more.
Twitter guidelines deter promoters from encouraging multiple tweets of the same thing or encouraging users to create multiple accounts. However, they do recommend you ensure contestants mention your account name in their tweet, so that no entries are missed. See the Twitter guidelines link below for more.
For further information on the topics covered in this blog post, I recommend exploring the following excellent sources:
- The Committee of Advertising Practice (CAP)
- The Gambling Commission
- OutLaw: Running a sweepstake at work
- Facebook page guidelines
- Twitter guidelines
How SharpEdge Marketing can help you: