Before proceeding with a prize draw marketers should seek legal advice to ensure that they are not running an illegal lottery. See Promotional marketing: Lotteries and Promotional marketing: Free-entry routes.
Types of prize draw
The term “prize draw” includes a variety of promotional mechanics:
In traditional prize draws, the winner is chosen at random from all valid entries returned by participants.
In “pre-selected winner” promotions, entry codes or numbers will be distributed to consumers in product packs or by other means, each bearing a unique code or other form of identification. The winning entry will have already been pre-selected before distribution, and the winner will be the customer who enters with this pre-selected winning entry. Prizes are only awarded to those who return the winning code or symbol to the promoter within the promotional period. Therefore, prizes may not necessarily be awarded as the winning entry may not be submitted. If the winning entry is not submitted, a promoter may choose to allocate the prizes using a traditional prize draw to those who have entered.
An “Instant win” promotion is one in which winning tickets are randomly and securely distributed in or on promoted products and consumers get their winnings at once or know immediately what they have won and how to claim it without delay or administrative barriers.
Terms and conditions
Advertising rule 8.17 lists significant conditions for all sales promotions, including prize draws and provides a handy checklist. The rule states those conditions should be available before purchase or, if no purchase is required, before or at the time of entry or application, and the Advertising Standards Authority (ASA) has generally interpreted this as meaning that significant T&Cs should be stated in the initial marketing material (Ashworth and Parker Ltd t/a END, 30 August 2017).
Less significant conditions should be available before or at the time of entry but do not need to be given as much prominence; they might, for example, be stated on an in-store leaflet, accompanying literature or, if entry is by a website, a webpage on the promotor’s website linked to from the ad. They include (but are not limited to): how and when winners and results will be announced; when prize winners will receive their prizes (if more than 30 days after the closing date); whether there is a cash alternative and any restriction on the number of entries.
All the terms and conditions of a sales promotion must be easily accessed throughout the promotion (for example, on a website) or in a form retainable by entrants. A complaint about a facebook ad for a promotion was upheld because the link to the full terms and conditions which was included in the ad did not work (Thomas Cook Retail Ltd, 18 October 2017). The ASA has ruled that having important information on the envelope only is unacceptable (Kingstown Associates Ltd t/a Healthy Living Direct, 10 August 2011; HHS Trading (UK) Ltd, 20 June 2007). See Promotional marketing: Terms and conditions.
Changing T&Cs during the promotion should be avoided at all costs and promoters would have to have a robust defence to show that they have dealt fairly with consumers and have not caused unnecessary disappointment. The ASA has upheld complaints where a promoter created and enforced T&Cs retrospectively with the aim to combat abuse (Headwater Holidays Ltd, 08 January 2014). See Promotional marketing: Abuse.
Promoters of prize draws should ensure that prizes are awarded in accordance with the laws of chance. If a verifiably random computer process is used, the ASA would expect to see evidence of this. If such a computer programme has not been used winners must be selected under the supervision of an independent observer. See Promotional marketing: Independent judges and observers.
Prizes must be awarded as described, or a reasonable equivalent. If the prize originally offered cannot be awarded then a reasonable equivalent must be awarded, for example if a concert is cancelled, it’s reasonable to arrange tickets for a different date or discuss with the winner an appropriate alternative. In order for an alternative prize to be considered a reasonable equivalent it must be of roughly equal value to the prize advertised. In 2018 the ASA received a complaint from the winner of a promotion who had won the opportunity to buy a pair of limited edition trainers because the promoter was unable to supply the shoes, and instead offered a 20% voucher to be used on a future purchase. The ASA considered that this was not a reasonable equivalent (Nike European Operations Netherlands B.V. 09 May 2018).
The terms and conditions should state how prize winners will be informed, and prize-winners should usually receive their prize within 30 days. See Promotional Marketing: Prize Winners. Both CAP and the ASA would expect promoters to make all reasonable efforts to contact the winner. Ringing a winner once will not be considered sufficient (Walkers Snacks Ltd 28 August 2013). If, despite their best endeavours, they are not able to contact the winner, promoters do not need to award the prize. Some promoters award the first prize to the runner up.
Exaggerating luck, Gifts v prizes
Promoters should neither imply consumers have won if they have not nor otherwise imply consumers are luckier than they are. One of the most common ways promoters do that is by confusing “prizes” with “gifts”. 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; and should be described as a “gift”, “award”, “reward” or similar as long as the context is not misleading.
Promoters should not overstate consumers’ chances of winning prizes, claim that consumers are luckier than they are by, for example, using words like “finalist” or similar, or falsely claim or imply that consumers have won, will win or will, on doing something, win a prize if that prize does not exist.
Cost to claim
The Committee of Advertising Practice (CAP) Code prohibits promotions where consumers incur a cost to claim a prize and therefore charging a consumer to ring and claim their prize is unacceptable (Churchcastle Ltd t/a Spencer & Mayfair 2011, 20 February 2013).
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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