Trying to figure out how to run a legal giveaway? It’s easier than you think – or not, depending on where you are running your giveaway, who can enter, how you collect and use data, and what you are giving away.
First, there are some basic things to know about the legalities of a giveaway. In the United States, a giveaway, or sweepstakes in legal terminology, is when you collect entries and then randomly select a winner. There are many other federal and state laws to be aware of as well, which may include bonding, state registration, and other legal requirements. Here are a few of the bigger things to consider:
Rules: You must allow people a way to enter without requiring a purchase (you can see why here), and you must have official rules posted that govern the sweepstakes.
Prizes: Some states require that you file winners lists at the conclusion of the giveaway. In addition, if you are giving away prizes that have a retail value over $5000 total for all prizes, or over $600 for any one prize, you have IRS filing requirements for winners.
Social: If you are using social media, each platform like Facebook or Twitter or Instagram has promotional guidelines that you must consider if you run your giveaway using their social channel to collect entries. A social platform may shut your giveaway down if you are not complying with their guidelines and terms. Also, the FTC requires special disclosures be included in any sweepstakes entries on social channels.
Data: You need to consider how you collect and use your entry data. If you are using a sweepstakes widget that you are placing on your site or blog, look into the fine print as many sweepstakes widgets or apps resell your data or may not collect information securely. With any data like emails or phone numbers you should be keeping that data secured and only use the information you collect for the purpose stated in the rules.
Compliance: There are government and consumer organizations like the FTC and the FCC that could fine you or take legal action if they feel like you are violating TCPA, COPPA, CAN-SPAM or social advertising guidelines.
If you find yourself saying “but I only want to give away a few t-shirts” or “but why is everyone else doing it without all this” you are not alone in your sentiments, but legally you are responsible for ensuring that the law is followed. Not complying could result in legal fees, fines or worse.
The best way to ensure that all of your legal bases are covered is to use a reputable promotion agency to help you write official rules and ensure that you are not breaking any laws. Some agencies will even help you draft a rules template so you can reuse them if you are giving away the same types of things on an ongoing basis.
Marden-Kane has been writing official rules and consulting with small and large businesses on how to run a compliant, legal sweepstakes and contests for over 60 years. Contact us and we can help.
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