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.
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.
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:
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?