In my pre-work at home life, I worked at a sweepstakes administration company for almost 11 years. In my final years there, I often thought “this is a lot of information and experience that I will never have use for again.” But, life often surprises us. Last week when a giveaway proposal came in, a little something in there triggered a flashback to those days as I knew straightaway that if that giveaway was run as proposed it would have been against the law. It was certainly no fault of the advertiser, if would be one heck of a marketing plan if legal.
Image via Wikipedia
This advertiser is just like the majority of people running a home business. We are one-man-bands running and marketing our online businesses as we see fit. We don’t have the time or budgets for attorneys overseeing our business practices. As I thought about this situation the next few hours, I wondered what other giveaway laws may apply to our blogs and businesses. And how many people just don’t know any of these laws apply? We are a pretty unregulated bunch around here, until the FTC or other government agency steps in.
I spent the good portion of the weekend scouring blogs and government and attorney websites to see where people could potentially get in trouble with the way many bloggers currently conduct blog giveaways. Tons of surprises! Here are a few “must reads” and where to find more information.
Giveaways, Sweepstakes, Contests and Lotteries
What bloggers typically call “giveaways” are usually considered sweepstakes under the law. These are drawings by chance for a prize. No more. No less.
Contests go a little further. These are no longer a matter of luck; usually some type of skill is involved to win.
Lotteries are when some type of consideration is added to a sweepstakes. There is a prize, a drawing and now some exchange of something valuable. Lotteries are extremely regulated. If you are running one without legal counsel, it is illegal.
Requiring a purchase would make your sweepstakes an illegal lottery. BUT, it doesn’t always have to be a monetary exchange. Requiring someone to Follow or Like you may be consideration. Time can also be consideration. From Saving for Someday, “asking an entrant to go to a third-party site, navigate to find a product or services and then report back to your site is even more likely to be deemed consideration and thus placing your giveaway into the classification of illegal lottery.” I see this requirement often. What is categorized as “consideration” varies greatly from state-to-state and even from judge-to-judge. If your sweepstakes is open to residents of every state, you need to abide by every state’s laws.
Rules
I rarely see sweepstakes rules explicitly stated. They need to be for your own protection. Things your rules need to include:
The Prize in Detail – What it is, the price, etc.
Who Can Enter – If you allow minors to enter your drawings, a whole ‘nother bunch of laws may apply. You also need to consider adding a location. If you open your sweepstakes to readers worldwide, you must comply with every country’s laws. Canada, for example, requires some skill be involved for a person to win. If you are running a sweepstakes/giveaway, you need to prohibit your Canadian readers from entering. Sorry, Canadian readers.
Duration of the Giveaway – When it starts, and when it ends.
How to Enter – This needs to be very simple. You may even want to get a professional second opinion on “extra entries.” As is stated on Saving for Someday, “even by providing an easy and simple means of entering but providing additional entries conditioned upon doing certain things may result in your giveaway not complying with necessary laws.”
How the Winner is Chosen and Contacted – I found a lot of speculation of giveaway rigging. Use a third-party like random.org. Get yourself out of the picture.
What if are Technical Issues? – What if your website goes down overnight on the last day to enter? What if all of the entrants’ information gets magically lost in cyberspace?
Release of Liability – You need to protect yourself against frivolous lawsuits. For some prizes this may seem silly. However, I recently had to sign and notarize a Release of Liability for a $100 gift card I won. I’m not sure what injuries may be the result of a gift card, but apparently the company wanted to make sure I wouldn’t sue them if I poked my eye out with the card they were sending.
Tax Responsibility – You sure don’t want any confusion about who is responsible for the taxes on the prize.
I know what you are thinking. “I never see this. If no one else is doing it, why should I?” So not true. Once I started digging, I actually found numerous blogs with Official Rules listed. Here’s a great example, Official Giveaway Rules. Anything that isn’t spelled out can leave room for speculation. In all of my research I could only find one person stating that you shouldn’t have a clearly stated set of rules – “Don’t write a legal document, nobody cares.” If you read through the comments, it appears even he may have changed his mind after a sweepstakes-savvy reader stepped in to tell him “The legal document is actually the most important part. If you are giving anything of value away via sweepstakes, you have to abide by federal sweepstakes law.”
You can find out more information about rules at Saving for Someday.
Facebook still seems iffy – even within Facebook itself:
Running a Successful Facebook Giveaway
One thing is clear from the above, if nothing else, if you do choose to add Likes to your entry process you can’t automatically enter your Facebook fans into your giveaway without their express consent. (Ex. When we reach 500 fans, 5 of you will get a prize. You need do nothing to enter other than Like this Page.)
Good stuff, right? If you are feeling a little more hesitant about incorporating giveaways into your online marketing plan, you are not alone. I know I am. Several of the comments I read in the posts linked above stated the same feeling.
You are legally responsible for giveaways held on your blog. This can spell even bigger trouble if you are not incorporated as a business entity. You are then opening yourself up personally for any liability or legal issues. Even if you have a sponsor for your giveaway, it’s your tail on the line. Some people out there take their “sweeping” seriously. There is a certain sector that count on sweepstakes winnings for their full-time income. If they think someone had an “edge” over them in winning, it can spell trouble.
The internet has evolved far quicker than these laws. Until they catch up, it’s best to go by the information we have available until someone tells us differently. Read up on the giveaway laws, and get legal advice if necessary. After all, I’m not an attorney. This isn’t advice, it’s food for thought.
The good news is, many of us are content-based blogs. We don’t run giveaway after giveaway to generate traffic. The leads generated from givewaways are also usually less-than-stellar. They want the free stuff. Many could care less about what you have to say. If you do want to keep running them however, make sure you are covered.
How are you feeling about administering blog giveaways after reading the above?
About Angie Nelson
I honestly don’t know if I’m going to do them anymore. I’m glad you posted this, Angie. A few years ago, I was one of those people who entered sweepstakes like mad and did win something pretty much once or twice every week. Doing this as a hobby made me realize when I started my blog that it could help me get readers, and it honestly did.
But, as someone who was really into sweeping, it did cross my mind a few times as to whether or not my giveaways were “legal.” But I decided not to worry about it because it appeared every other blogger was doing it so why couldn’t I? I think this is the mindset most bloggers have — it’s a much more attractive option to just not worry about whether or not your giveaway is legal and go ahead and get those likes, comments, traffic.
I certainly don’t want any legal trouble and to me it’s not worth the risk, so I’m not sure I’m going to be doing any more giveaways.
I have only done a couple of giveaways in the past. And, like you said, I just slapped it up there without giving it another thought. Honestly, if this little proposal wouldn’t have come through that made me say “Whoa!,” I don’t know that I would have started looking into the legalities of things.
Whether we should do them or shouldn’t do them isn’t something I can give advice on. I do know that ignorance of the law is never a defense when you get into a legal bind. My main concern for myself is what if something is questioned? Even if I am correct in how I handled the giveaway, what would be the cost to my own household to prove it? I don’t know for me personally that 15 new, interested readers is worth thousands of dollars in retaining an attorney. There are other ways to gain a following without getting into this sticking situation.
And if things are clearly spelled out down the road as to what we can and cannot do, I may look into the feasibility of it again.
I’d never have thought about this at all if I hadn’t come up against your post. What a bind to go through all this just to give away a few bits of makeup or beauty products on my blog but I suppose it’s better to be safe than sorry and the laws are there for a reason. Anyway I’m thinking there are easier ways to make blog readers happy that don’t involve getting into a legal mess!
thanks for posting this
Jan
Welcome, Jan! I just visited your site for the first time the other day. It’s nice to “meet” ya.
We’re a creative bunch! I think we can come up with exciting little things to get people talking without having to potentially put ourselves at risk. Sometimes a little “thinking outside the box” is all we need to do.
Wow! I’ve never done a giveaway, and after reading this, I’ll be thinking long and hard before having one. I do not want the FTC breathing down my neck.
If they were super important to me, or that is what my blog was focused around, I would certainly make the investment to ensure things were on the up-and-up. I can take ‘em or leave ‘em, I think.
I’ve read up some rules about posting on Facebook. The rules I remember is that you can’t have people like a post or something like that in order for that to count as their entries, plus in your giveaway/sweepstakes, you have to express that Facebook is in no way endorsing it. I think they are fun, but I’m kinda over them. The last one I did was purely for more likes on my FB page through a Rafflecopter giveaway… which I don’t see anything wrong with that LOL – I don’t know! I’m done HAHAHA
I’m glad to see this being covered. I read something about giveaway laws years ago, and that’s a big part of why I don’t do them. I’m not convinced they’re worth the potential trouble. It would be nice if the sponsors who seek blogs out for these things would be more careful about helping bloggers set up to follow the rules.
If blogs only came with an instruction manual and a few warnings…
I’m glad to hear you had seen this before. I had to do a lot of searching around. I wonder if it has been overlooked, or if we want to pretend that it will go away or doesn’t apply to us if we don’t acknowledge it. It can certainly be a great promotional tool, but I just want people to make sure they are covered. If you talk to an attorney and they say “go for it, no worries,” then by all means do it. If we are *assuming* it is okay because the blogger next door is doing it, that isn’t safe.
Wow! Excellent information Angie. Thanks so much for researching this. This is a bookmark post for sure. Shortly after I began working full-time online, I incorporated to cover all my bases for that “just in case” situation.
I’ve only hosted one giveaway before, about a year ago, from a company who mailed out the prize to my winner. Everything went smoothly, but I must admit I was a bit anxious until my winner received her item which took about a week.
Such a good point:
“The leads generated from giveaways are also usually less-than-stellar. They want the free stuff. Many could care less about what you have to say.”
I too was recently approached to do another giveaway but the suggestions for it had to many steps. This post gives so much food for thought!
Peggy Baron recently had a giveaway, and to throw your name into the hat, all you had to do was add a valuable comment on the topic at hand. I liked that it was super simple and you didn’t have to jump through hoops. If I ever do a giveaway again, I’d like to approach it the way she did.
P.S. – followed you over here from Tiffany Dow’s Branding Day 3 Challenge
Thanks for this information. I was aware that there are numerous considerations when holding a giveaway. I try to make mine as simple for the reader as possible. Jumping through hoops makes me question the legitimacy and legality of contests.
I’ve been researching this all morning. I’m trying to find, though, more information on extra entries.
I’m going to be running a contest to name one of my recipes, and the winner will get an Amazon gift card as well as a free copy & a mention in our future cookbook. Since the winner will be chosen by merit, it’s definitely a contest but I’d also like to (obviously) take advantage of the contest to get more subscribers.
So – do you think it would be legal if I did the contest as well as a separate sweepstakes for another giftcard (maybe $10 or so) which would allow the winner to be chosen at random? And one of the options for extra entries would be to tweet/promote the first contest?
Or am I thinking this the wrong way. I guess I’m trying to figure out if there is a way to do the “extra entries” thing, but I can’t have it a part of the actual contest since the winner of the contest itself will be chosen by merit (or, who has the best recipe name).
Unfortunately, I can’t give you a definitive answer Bethany. I’m not a lawyer, so it would be wrong for me to give you legal advice.
Angie,
I just came across your post. Thank you for referencing my article. Glad you found it helpful.
~ Sara
Thank you, Sara.
Thanks for the article – VERY helpful! I know you can’t give legal advice and I HOPE that is not what I’m asking here… but maybe you can give your thoughts or steer me to some info… It’s about the Canandian entries.
If Canada requires some skill…does that mean EVERY giveaway open to Canada (per the sponsor) I have to have some “skill-based” entry? (I am assuming yes but please just confirm if you can).
THEN my next question is…. does having that skill-based entry then make my giveaway now a contest in the US and subject to different rules/laws than a giveaway??
I just want to be sure I am reading this correctly.
And… do you have examples of what kinds of entries qualify as skill-based to Canada? I am totally unsure what to ask them to DO!
I’m sorry, Julie. I sure can’t help. If you visit a few of the links within this post, I believe there are some examples available though.