Giving up random giveaways – keeping things legal

Giveaways are commonplace in the blogosphere. From time to time, I have hosted giveaways for wonderful small goodies myself.  Somewhere on the periphery of my former lawyer brain, I was aware that competitions, contests and lotteries are regulated but I blithely thought that my modest giveaways were exempt and the rules only applied to big value prizes such overseas trips and luxury cars.  Thanks to a tip off from Ruth de Vos this week, I now know better.

To offer a giveaway to readers throughout Australia whilst promoting goods or services provided by a business (be it your own or someone else’s), you must comply with the relevant trade promotion laws and regulations in each jurisdiction. Broadly speaking, the authorities appear to distinguish between “games of chance” and “games of skill” (eg “In 25 words or less tell us why…”).

Most Australian states are relaxed about game of chance promotions, such as  “leave a comment to go into a random draw” giveaways, where the prize value is less than A$5000.  However, if you want residents of New South Wales or the ACT to be eligible for your giveaway, you must obtain a permit regardless of prize value and a new permit is required for each promotion.  Also, if you are using any form of electronic drawing system, that system must be approved in South Australia.  No permit is required in Western Australia but a copy of the terms or conditions of entry must be lodged with the Gaming and Wagering Commission prior to the commencement of the promotion.

If a trade promotion is conducted solely as a “game of skill”, and there is no element of chance involved, typically no permits are required in Australia but the giveaway will still be subject to trade practices and fair trading legislation. This means that the value of prizes must be described accurately and the draw must take place at the time and location and manner clearly shown in the terms and conditions.  This requires clear official rules that are easy to locate.

As a result of my research, I have revised my blog policy on giveaways.  I am giving up random comment/game of chance giveaways and will save game of skill giveaways for when I have something extra special to share.  Here are some resources so that you can seek your own advice and form your own view for your particular blog, website or business activities:

Australia:

Overseas:

PS:  While Facebook recently changed their Facebook Pages Terms  to “make it easier for businesses of all sizes to create and administer promotions on Facebook”, there remain many issues to consider as highlighted in New Facebook Contest & Promotion Rules: What You Need to Know.

Disclaimer: This article is general in nature and must not be relied upon as professional legal advice. If you need to know how the law applies in a particular situation, please get advice from a lawyer.

Comments

  1. Thank you, Brenda.

  2. I’ll be saving this post, Brenda. Thanks for processing it and putting it all into an easily digested format! I like your revised giveaway policy. I’ll be following the same general idea.

  3. Thank you Brenda for bringing this to our attention.

  4. Thanks Brenda for researching and sharing. Many Thanks Mel

  5. Wow Brenda,
    Thanks so much for this. I haven’t done a give away yet but was thinking about it at some stage down the track. The revised giveaway based on game of skill sounds the way to go.
    Thanks again!

  6. Wow Brenda, thank you for sharing your research on this topic. It had not occurred to me that a “simple” random giveaway of product valued at less than $100 would be subject to legislation. As you say, the rules are different in every state, so it is time to re-think if & how I manage competitions in the future.
    Jenny

    • Hi Jenny – I found the research rather eye-opening (and sobering). Simple is not so simple sometimes! I hope this information helps you find an approach that works for you and your wonderful thread business.