Commercial

Under the Gambling Act 2003, promotions of this nature (often referred to as ‘sales promotion schemes’) do not require a permit if entry is free and the winner will be selected randomly. However, depending on your target market, your giveaway may create a binding legal offer to the public. Once someone enters in accordance with your rules, you are legally required to honour the prize.
 

What your terms and conditions should cover

 

At a minimum, you should have terms and conditions that clearly cover:

Why clarity matters

 

From a risk perspective, clarity matters. Under the Fair Trading Act 1986 even technically correct promotions can breach the law if the overall impression is misleading.
 

What can go wrong if it is misleading

 

Misleading conduct can result in substantial fines under The Fair Trading Act 1986.  Individuals may be fined up to $200,000.  The limit is $600,000 for companies.  But that is just a financial penalty; consider the harm that adverse publicity could do to your brand.  It might not be so easy to put a figure on that.
 

Practical tips before running a promotion

 

If you are thinking of running a competition or giveaway promotion, think very carefully about what you are offering and how the public might interpret your offering.  Make sure that your terms and conditions are clear and line up with what you are actually planning to do – don’t just copy someone else’s Ts & Cs.  If in doubt, ask a qualified lawyer to look over or draft your terms.
 

Final thought

 

Everyone loves a freebie, and it seems counter-intuitive that even in this day and age it should be so hard to give something away.   However, being clear and fair should help to keep everyone happy and have your brand remembered for all the right reasons.