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April 2006

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Sweepstakes, Contests or instant winner games

Archive for April 21st, 2006

VT Omit Postage
Posted by Kathy on April 21, 2006

We recently had an interesting discussion with an attorney about VT residence needing to add postage when requesting a winners list. The statement sent to our company from the clients attnorney is as follows: Our regulatory counsel has confirmed with the VT Attorney General that VT Administrative Code Section 109.01(b), relating to Consumer Fraud, Contests and Prizes, addresses the return postage issue: �It shall constitute an unfair and deceptive trade act and practice in commerce under 9 V.S.A. section 2453(a) for any person to solicit any person to engage in any kind of game of skill, contest sweepstakes, give-away or other promotion which: (a) is deceptive or misleading as to chances of winning, the number of winners, the value of the prizes, or the availability of the prize; (b) requires any kind of entry fee, service charge, purchase or similar consideration in order to enter or to continue to remain eligible; or, (c) uses publications, literature, written or verbal promotion that is false, deceptive or misleading.� Although it�s not clear from the Code, the AG has interpreted (b) to cover postage relating to requests for winners lists, and has issued several opinion letters explicitly stating as much.

What have you advised clients regarding this subject? We had been advised by council that omitting postage was only regarding game piece request to participate.

I checked with our legal on this one to see what our interpretation is.
We take the position that Sponsor only has to pay for return postage in connection with game piece requests. Once the winners' list is available the game is over and we do not see any need to pay for the return postage in connection with winners' list requests.

Contest to Customers Only
Posted by karen on April 21, 2006

It is my understanding that under contest rules, you may specify only customers are eligible due to the skill based approach. Is this correct or do you need to open to non-customers?

I’m the CMO at Mainstreet Bank and working on implementing a backyard remodel contest that will require a short essay and photos of their current backyard. I’m opening to all customers that currently have a relationship with us. However, if a non-customer opens a checking account, they could also submit the contest entry. Any help would be appreciated. Thanks.

Generally speaking, as opposed to a random draw sweepstakes where an alternate, non-purchase method of entry is required, a skill contest may require some form of consideration (opening a checking account, for example). However, there are a handful of states that do not allow consideration even in the context of a skill contest. Therefore, we would have to know which states the promotion will be conducted in before any definitive advice can be given. It's also important to note that in order to truly be considered a skill contest, the rules must clearly spell out the judging criteria, and each entry must be judged on that criteria by a qualified individual. So be sure to use measurable , judgeable criteria and communicate it clearly in the rules. Also be sure the judging is done in a professinal manner.
Contests can be tricky, so we would suggest you contact a promotion agency that has in-house counsel, such as ours, to help walk you through the issues.