Promotional marketing: Gifts v. prizes

Apr 4th '16

The difference between a gift (available to all or many) and a prize (awarded to a few) must always be clear to consumers.


If all or a significant proportion of participants in a promotion are entitled to it, an award should not be described as a prize; it may be described as a “gift”, “award”, “reward” or similar as long as the context is not misleading. Several factors might help determine what constitutes a “significant proportion”. For example, the relative proportions of potential prize winners and potential gift recipients; the mechanisms by which promoters offer gifts and prizes; and the relative values of the prizes and gifts when compared with each other. But there can be no prescriptive definitions of “significant proportion” because the context in which claims appear and the degree to which promoters have made the distinction between “gifts” and “prizes” clear are the key criteria for making a sound judgment.


Promoters need to ensure they use the right terminology and the presentation of the promotion does not mislead. For example, promoters should not claim that respondents can “win” a “reward” because the terminology is inconsistent and confusing: respondents “win” a “prize” but are “allocated”, “awarded” or “given” a “gift” or “reward”.


Promoters who offer gifts to a significant proportion of participants and the opportunity to participate in a prize draw should avoid misleadingly listing prizes and gifts together under one heading. Instead, they should separate them so it is clear that participants will receive an award and have the chance to win a prize (Winners Club Ltd, 30 August 2006; Strike Lucky Games Ltd, 8 June 2005; Richmond Enterprises, 9 March 2005; The Winners’ Club Ltd, 19 January 2005, and Multiplex Media Ltd, 6 October 2004). In 2006, the Advertising Standards Authority (ASA) received a complaint about a mailing stating that Damart customers with “more than 750 Gift Points” had been “officially awarded a magnificent gift from our Audio-Visual Collection” of a DVD home cinema, an audio system or a widescreen TV. The complainant, who had been allocated 760 ‘gift points’, believed that the mailing misleadingly implied recipients had an equal chance of receiving any of the listed items. The ASA considered that information describing how the items were allocated was not prominent enough and that the audio system, which was a gift, should have been distinguished clearly from the home cinema and TV, which were prizes (Damartex UK Ltd, 17 January 2007).


Advertising rules require promoters to specify the number and nature of prizes and/or gifts. If the exact number of gifts or prizes cannot be pre-determined, a reasonable estimate of the number and a statement of their nature must be made; for example, it might be acceptable to state “5 Top Prizes and thousands of fun and exciting gifts given away everyday…”. Rather than specify up-front how many gifts are available, some promoters have chosen to indicate their availability using odds; for example, a 1:1 chance of receiving one. Even if the chance of winning is stated, the ASA has considered that the presentation of a promotion is capable of misleading. In 2004, the ASA upheld a complaint that a mailing misleadingly implied the recipient had already won a substantial cash prize despite stating in the Rules that “the odds of winning each of the prizes are as follows: Category One: the £10,000.00, 1:550,000; Category Two: £2.00, 1:1 …” (UK Winners’ Claim Service, 27 October 2004).


Promoters may make a gift conditional on the purchase from, for example, a catalogue as long as both the consumer’s financial obligation and what is on offer is clear. In 2011, the ASA ruled as misleading a promotion that stated “Congratulations… Your customer status means that YOU are GURANTEED 2 awards – Your GUARANTEED 1st award – a Watch Free Gift… Your GUARANTEED 2nd award – Cash award A SHARE OF £10,000… You have been chosen to receive a remarkable FREE GIFT…”. The ASA concluded that the need to place an order, which was stated on page two of the mailing, contradicted the impression that the awards were guaranteed and unconditional (Kingstown Associates Ltd, 10 August 2011).


Source: Committee of Advertising Practice (CAP)


Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA. CAP’s Advice Online entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.


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