Trade promotions, also known as competitions, sweepstakes, contests or giveaways, are an increasingly popular way to promote goods and services to consumers. A trade promotion typically falls into one of two categories:

  • a game of skill, in which skill is used to determine the winner/s. For example, requiring each entrant to "describe your dream holiday in 25 words or less". The entrant that submits the most creative response wins; or
  • a game of chance, in which winners are determined by chance (for example, a draw).

Each promotion must be conducted in accordance with the law in each State and Territory in which it is being conducted, that is, those jurisdictions whose residents can enter the trade promotion.

Other areas of Australian law, for example, consumer protection law and advertising law (including applicable advertising codes), will also apply to the trade promotion, irrespective of whether the trade promotion is chance or skill based.

There are numerous issues which must be taken into account when planning a trade promotion.

Risks

Failure to address these issues can lead to, for example:

  • lengthy delays and correspondence with gambling regulators prior to the issue of a permit for the promotion;
  • enforcement action as a result of breach of prohibitions in applicable trade promotions legislation;
  • unwanted attention from consumer protection authorities;
  • where the Promoter is relying on a third party in respect of any aspect of the trade promotion, for example, a prize supplier or a social media platform, damage to the relationship between the Promoter and this third party; and
  • from a PR perspective, damage to the reputation and image of the Promoter, and more importantly, the Promoter's brand.

Checklist for Promoters

Whilst trade promotions may appear to be a simple and highly cost effective way of promoting goods/services, Promoters should be aware of all the legal issues which may arise and should apply the same high level of diligence as they would apply when undertaking any other material marketing/advertising activities to ensure compliance with the law.

To assist Promoters, we have prepared a checklist to assist in identifying and addressing these issues. For a copy, please contact one of Addisons' Media and Gaming Team.

The assistance of Jessica Azzi, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.