Who doesn’t love a competition? Especially when you get to win free stuff! Competitions are a great way for your business to extend its reach and grow its following, but they have to be run the right way, or you risk burning some really great opportunities! In this piece, we'll delve into the exciting realm of these competitions, exploring the differences between games of skill and chance, the legal obligations they entail, and a handy table comparing examples of each. Read on, friends.
What are Trade Promotion Competitions?
Trade promotion competitions are a popular marketing tool utilised by businesses to promote their products or services. They are designed to engage consumers, create excitement, and ultimately increase brand awareness and customer participation. These competitions often involve giveaways, prizes, or other incentives to entice participants.
Game of Chance vs Game of Skill
When it comes to trade promotion competitions, two primary categories come into play: games of skill and games of chance. Understanding the distinction between the two is crucial, as it directly impacts the way these competitions are conducted and the legal requirements involved. This is something that a lot of competitions may actually be getting quite wrong :(
Games of Skill:
In games of skill, the winners are determined by their level of skill, knowledge, or expertise in a particular area. These competitions rely on the participants' abilities to perform a task or answer a question correctly. For instance, a photography contest where entrants submit their best shots and are judged based on composition, creativity, and technical proficiency falls under the category of a game of skill.
Games of Chance:
On the other hand, games of chance rely on luck or random selection to determine the winners. Participants have little or no control over the outcome, making it a matter of chance. Examples of games of chance include sweepstakes, lucky draws, or raffles, where winners are chosen at random from a pool of entries.
Below is a table showcasing a few examples of games of skill and games of chance commonly seen in trade promotion competitions:
Remember that this table provides a general overview, and there may be variations or exceptions within each category. Additionally, legal definitions and regulations surrounding games of skill and chance may vary depending on the jurisdiction within Australia.
Legal Compliance
In Australia, trade promotion competitions are subject to various laws and regulations to ensure fairness, transparency, and consumer protection. The specific legislation that governs these competitions may vary slightly across different states and territories. However, there are some common legal obligations that businesses must comply with:
Permits and Approvals: Depending on the prize value and jurisdiction, businesses may be required to obtain permits or approvals before running a trade promotion competition.
Terms and Conditions: Clear and comprehensive terms and conditions must be provided to participants, outlining the rules, eligibility criteria, prize details, and any other relevant information.
Prize Limits: Certain states impose restrictions on the value of prizes that can be offered, ensuring fairness and preventing excessive inducement.
Privacy and Data Protection: Businesses must adhere to strict privacy laws and handle participants' personal information responsibly.
Anti-gambling Laws: To prevent trade promotions from turning into gambling activities, businesses need to ensure they comply with specific anti-gambling regulations.
Compliance with Consumer laws
As a business organising a competition, it is essential to comply with consumer law and ensure that your advertising content is not misleading or deceptive.
This includes providing accurate and truthful information about the competition and its associated prize. To adhere to these requirements, you must:
- transparently communicate all relevant details regarding the competition and prize;
- the prize description
- Prize value
- eligibility criteria; and
- any conditions or restrictions will be clearly stated in our promotional materials and competition terms and conditions.
You must ensure that the prize awarded aligns with the description provided, and any changes or updates will be promptly communicated to participants. It is important to maintain integrity and trust throughout the competition process, adhering to consumer protection regulations and providing an exceptional experience for all participants.
What about Social media?
Just because you’re doing the competition online, doesn’t mean that you’re exempt from the usual rules around competitions that apply to you otherwise, nor does it mean that competition licenses aren’t needed in some circumstances.
Instagram and Facebook
Just as you have terms and conditions on your website, Instagram and Facebook have terms and conditions that you agree to when you sign up and use their platform. The terms and conditions set out the rules about how you’re allowed to use the platform - and running competitions on them is no exception.
At a very high level, these rules ensure Facebook and Instagram are not responsible for the competition or any disputes that may arise out of the competition - they pass this responsibility on to the person running the competition. They also say that the person running the competition is responsible for setting the rules of the competition.
Facebook/Instagram aka META require you to have competition terms and conditions! So don’t get caught short.
Facebook pages can:
- Collect entries where users have liked/commented a post
- Collect entries via users messaging the page
- Collect votes via likes e.g. new fans, new likes
In regards to your Facebook page, you cannot use personal timelines for friend connections to administer promotions e.g. “share on your timeline” to enter or “tag your friends in this post” to enter. You can however ask users to enter a promotion by either messaging your page, posting on your timeline or checking in at a location. Do check Instagram, Facebook and any other platform prior to running a competition in case of any changes to their rules.
So what do your terms and conditions need?
When putting together your terms and conditions, they must at a minimum include the following:
- Who is the promoter(s) - if more than one e.g. a collaboration name them
- What are the entry requirements e.g. what do they need to provide you when entering the competition?
- Eligibility criteria e.g. you may impose an age restriction 18 and above
- How long is the competition period e.g. the start and end date
- Timeframe for awarding the prize
- What is the prize and can it be transferred to someone else or exchanged for cash
- How to contact winners – email/phone/DM?
- How you will publish results – will it be on socials? Your website? etc
- What happens if the winner doesnt claim the prize
- Marketing consent – make sure they don’t unsubscribe during the promotional period and ensure you have consent for future marketing with ability for them to unsubscribe
- Privacy policy – important they know what you are doing with their information
- Any post you market on socials should include a link to your competition terms and conditions
- Release for social media platforms from any liability
- Include a disclaimer on your social media platforms e.g. that they (the platforms) are not affiliated with or endorse your competition
Feeling a bit overwhelmed and not sure where to start and wanna ensure you stay legally legit? Guess what! We have an already prepared Competitions Terms and Conditions Template available and what’s even more epic, it includes the disclaimer that Facebook and Instagram require! Our Competitions Terms & Conditions Template also comes with a handy checklist and User Guide!
Authorities (and permits)
We have set out a handy table below however it is important to understand, the specific regulations and compliance considerations may vary based on the nature of the trade promotion competition and other factors. The compliance considerations mentioned are general guidelines, it's crucial to consult the relevant regulatory bodies or seek professional advice to ensure compliance with the most up-to-date regulations and requirements in each jurisdiction.
New South Wales Regulations here
South Australia Regulations here
Western Australia Regulations here
Australian Capital Territory Regulations here
Northern Territory Regulations here
Make sure you do your homework and get your ducks in a row before launching your kickarse comp and bringing in the throngs of new, loyal followers!
And if you are ready to ensure compliance and create a successful competition? Click the link below to get your hands on our template and take the first step towards running a stellar competition that captivates participants and boosts your brand. With our customisable template, you'll have all the essential elements covered, including intellectual property rights, entry requirements, judging criteria, prize details, and more. Don't miss out on this opportunity to ensure you have the right terms and conditions and minimise legal risks. Purchase our Competition Terms and Conditions Template now!
FAQs:
Do I need a disclaimer for Facebook and Instagram?
Yes you need to expressly state that these platforms do not endorse and nor are they affiliated in anyway with your competition.
Do I need terms and conditions for my social media competition
Yes irrespective of which platform you use, you still have to comply with applicable regulatory requirements and have the right terms and conditions in place.
Do I need a permit for social media?
Again regardless of platform you use the same rules apply as to whether a permit is necessary will on each state and territory as they have their own set of rules and regulations for competitions.
Any questions? You know where to find us. Now go make yourself a stellar competition everyone will want to get in on!
***Disclaimer. Please read!!***
This article is for general information purposes only and should be used solely as general guidance. It does not and is not intended to represent legal advice or other professional advice.
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