Promotions are fantastic way to build customer loyalty. Some businesses prefer social media promotions; other companies stick to traditional mailers. Whatever the case, all marketers should familiarize themselves with promotions law.
Lottery Promotions Law
One of the most common marketing promotion tools is a lottery. Federal rules on the topic are straightforward.
By definition, a lottery must consist of a consideration (payment), a chance and a reward. All three must be present in order for a lottery to be legal.
- Consideration (Payment) — The player must make a material contribution to participate.
- Chance — The player must understand that he or she may not win and lose their material contribution (e.g., money).
- Reward — The winner of the lottery must be awarded a material reward (e.g., money, car, vacation, etc.).
6 More Facts About Marketing Promotions Law
- Rhode Island, Florida, and New York have notoriously strict promotion laws.
- If you plan to run a promotion targeting kids, you must adhere to the Children’s Online Privacy and Protection Act.
- If you plan to market or conduct any part of the promotion through e-mail or snail mail, you must adhere to the Deceptive Mail Prevention and Enforcement Act, in addition to the CAN-SPAM and FTC Telemarketing Rule.
- Alcohol, tobacco and appliances products are beholden to strict federal disclosure laws.
- Any promotion or contest conduct on social media must include proper disclosures.
- All Twitter promotions should include a clear indicator that the Tweet is either sponsored or part of a promotion (e.g., #sponsored, #contest, #promotion).
For more information about promotions law, contact an experienced marketing attorney.