I love a good (legal) giveaway! How ‘bout you? I want to be like Oprah and yell "you get a car", and "you get a car". Or better yet, "you get free college tuition", "you get free college tuition". I'd love to be able to give away full four-year scholarships to deserving teens. #OneDay #DreamBig
Over the past few months, I've noticed many of the entrepreneurs I follow giving away prizes and gifts without following the ahem, rules. I know, I know. It wasn't you. But, I'm hoping this advice will help you or someone in your circle.
There’s nothing like a good giveaway! Who doesn’t like to win a prize from their favorite brand or influencer? I recently won a prize from a leadership consultant that I follow on social media. And guess what? It’s been more than a month, and I’ve yet to receive my $50 Amazon gift card. Now, at this point, I could easily report the contest to the FTC (Federal Trade Commission), the state attorney general, or the Delaware Department of Justice. It’s not that serious for me. However, I’ll probably unfollow her account on social media. I even sent a nice note and still didn’t get my gift card. Did I mention I broke the cardinal rule? I spent the money before it hit my account!
Entrepreneurs are usually busy perfecting their craft and may not spend a ton of time on social media marketing and promotion. That's where these six tips come in handy. They are designed to get you thinking about what you need to know before hosting your next social media or digital promotion.
Failure to follow the rules can have severe repercussions including bad publicity, poor brand reputation, lost sales, monetary fines, and deletion of social media accounts. Oh yeah, I’m not an attorney, so please don’t take this as legal advice. This post is based on my experience as a marketer.
Sweepstakes are regulated at the national and state level by several entities. So, again please consult an attorney or promotions agency for additional assistance.
Federal Trade Commission (FTC)
Federal Communications Commission (FCC)
United States Postal Service (USPS)
United States Department of Justice (DOJ)
There are so many benefits to hosting promotions within your business. Promotions are used to drive traffic to websites, blogs, and social media accounts; grow followers; boost engagement; and increase brand awareness. Promotions can also provide leads and generate sales.
1) What are you running? Is it a contest or sweepstakes?
In simplest terms, a sweepstake is a random drawing. Sweepstakes cannot require someone to pay a fee for entry or else it becomes a lottery. You also have to provide someone an alternate method of entry, such as a mail-in postcard. A contest is a game that has an element of skill to it. For instance, the best travel picture, most endearing essay or guess how many jelly beans are in the jar.
A giveaway or promotion is a blanket term used to describe contests and sweepstakes.
2) Do you need to register for your prize?
If your sweepstakes prize is over $5,000, your contest needs to be registered in Florida and New York if advertising to residents in those states. Rhode Island registration is only required if you are running retail sweepstakes.
If you have a prize valued over $600, you are required to provide the winner with a 1099 tax form.
3) Did you create official rules?
Yes, you’re supposed to have official rules. It should include the name of the contest, how winners will be notified, dates of the contest, and more. They usually appear on your website. And, you are required to link to them in social media posts.
Curious as to what official rules look like?