How to safely run a trade promotion

If you run game of chance promotions, you’re likely familiar with the ‘joy’ of obtaining permits. David Kelly, founder of KHQApproved.com.au, a division of Kelly Hazell Quill Lawyers, talks you through what you need to know.

David Kelly Photo 180You may have heard that gaming legislation in Victoria has changed to (among other tweaks) remove the need for trade promotion permits. This is awesome news for those who suffer the tedium of applying for permits. But don’t be lulled into a false sense of security – permits may have gone the way of the dodo, but the overall compliance requirements are still very much in force. And nasty fines apply to breaches.

So… what do you need to know?

In most respects, nothing has changed – you still need to ensure that your T&Cs (terms and conditions) cover the things they did previously. If you want to ensure your T&Cs will pass muster in Victoria, they must include:

  1. Full details regarding who can enter,
  2. full details regarding how to enter,
  3. start/end dates and times,
  4. full description and value of all prizes,
  5. how winners will be chosen (barrel draw/random electronic selection),
  6. draw date, time and location,
  7. how and when winners will be notified and where results will be published, and
  8. details of any additional purpose that personal information collected from entrants will be used.

That last point is a new one for the Victorian legislation – this is (as you likely already know) covered under privacy and spam laws, but Victoria has also decided to make this a specific requirement of its compliance regime.

Additional information must be included in the T&Cs, if entry is via scratch & win cards (I won’t go into that here). If your promotion is running nationally, your T&Cs must also comply with the requirements of the other states/territories.

Top tips for drafting T&Cs

You’d think that by ensuring your T&Cs include all of the above, they’re pretty easy to draft.  Sadly, that’s not our experience! We review a lot of T&Cs for a variety of clients, and regularly encounter the same drafting whoopsies. Here are our top drafting tips:

  • Entry restrictions: if you’re running a promotion via social media, entrants must be at least 13 years old to enter. This is the age limit that applies to use of social media accounts. Also, think about the age limit in terms of the prize being offered – is it something that the winner could legally buy? Permit authorities can refuse to grant a permit if they consider that the prize is unsuitable for minors.
  • Opening/closing dates: don’t forget time zones! If you’re running a national promotion and don’t state your time zone, then people in WA (for example) will assume they can enter up to the time stated in the T&Cs. If your T&Cs don’t specify a time zone, then those entries must be included in the prize draw.
  • How to enter: if your entry mechanism involves a series of steps, set it out in bullet points – don’t shove everything into one, long running sentence. It’s confusing, and may lead to a large number of invalid entries, or complaints from grumpy entrants.
  • Prizes: this is main area where we usually need clarification from clients. You MUST fully describe the prize and provide a value for each element. This is why:
    • If there’s ambiguity about the prize, then there’s potential for a winner to claim a prize which is not what the promoter intended to give away. So there’s a risk the promoter will have to fork out more than they planned.
    • Ambiguity leads to disagreements, often acted out on social media – never underestimate this.
    • There’s a specific section under the Competition and Consumer Act 2010 regarding prizes – in a nutshell, it is an offence under the act to not provide a prize as described. Do you really want to get pinged by the ACCC?  Didn’t think so.
    • All of this can lead to bad PR for the promoter, which will live on long after the promotion has ended.
  • Unclaimed prize draws:  if you’re running a national game of chance promotion, you must include an unclaimed prize draw in your T&Cs (there are few exceptions to this).
  • Use of personal information: your T&Cs must include a clause about how personal information will be used, and a link to the full privacy policy. You must also include an information collection statement on the entry form.
  • Compliance with social media rules: if your promotion is running via a social media platform, make sure your T&Cs include any wording required by that platform. Facebook and Instagram have quite prescriptive wording that must be included. If it isn’t, your promotion may be taken down.

The wrap

Properly run, trade promotions are an incredibly powerful marketing tool, giving promoters the opportunity to creatively engage with their customers (and attract new ones). Get it wrong, and the reverse may happen.

It’s great news that permits are no longer required in Victoria, but don’t be tempted to ignore compliance requirements. In Victoria, failure to comply can attract fines of $8,800 or more, and the gaming authorities in other states have similar (or worse) penalties. Yikes.