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Why Your Giveaway Needs to Be No Purchase Necessary

Last Updated on November 17, 2020 by Stacey Corrin

Are you interested in running a giveaway for your business?

Giveaways are excellent ways to drive traffic to your business website, grow your online audience, and boost leads and sales. Yet, with any online promotion, it’s crucial you follow relevant laws in your country to avoid any legal issues.

Today we’ll cover one of the most important regulations you should be aware of and explain why your giveaway needs to be No Purchase Necessary.

Different Types of Prize Promotions

First, let’s look at the different types of prize promotions available online. To understand the differences, you should first familiarize yourself with the word “consideration.”

Consideration alludes to the ways users can “buy” giveaway or contest entries by making a purchase. It can also mean giving up a significant amount of time, like filling out a long and in-depth survey or making repeated store visits.

When it comes down to it, what does and doesn’t count as consideration depends on which country or state you’re in. If you’re in the U.S., buying a product is seen as a consideration, but in countries like the U.K. and New Zealand, it’s not.

Now that you know what consideration means, here are the different types of prize promotions commonly used.

Raffles and Lotteries

raffles and lotteries no purchase necessary laws

Raffles and Lotteries are 2 similar prize promotions that require entrants to purchase something to enter. They also draw the winners at random.

Businesses are not usually allowed to run lotteries, and in the U.S., they are only government-run. In comparison, Raffles are typically meant for non-profit organizations.

Lotteries include these 3 key features:

  • It gives participants the chance to win money or a prize of significant value.
  • Winners are chosen at random (by chance).
  • Participants need to buy tickets to enter or win.

Here are how raffles differ from lotteries:

  • Raffles should have a winner every time, so you cannot carry over entrants to the next raffle.
  • You can run a raffle privately.

Remember that raffles are limited to non-profit organizations in many countries. So check with your local state’s laws for the official rules before going ahead with this type of prize promotion. Raffles also often have an entry fee.

Sweepstakes and Giveaways

Sweepstakes and giveaways no purchase necessary

Sweepstakes and Giveaways are often referred to as games of chance. This is a type of promotion you can legally run as a business without breaking No Purchase Necessary laws.

For your promotion to be seen as a giveaway or sweepstakes, it should include these features:

  • It gives participants the chance to win money or a prize of significant value.
  • Winners are chosen by randomly drawing a winner.
  • Anyone can take part without buying anything or providing consideration.

The main difference between sweepstakes and lotteries is that no purchase is required to enter.

Contests

contests no purchase necessary laws

Contests are prize promotions that are also called games of skill. This means entries need skill, and winners are picked based on merit instead of at random (by chance).

Here are a few examples of skill-based contests:

In this type of promotion, winners are not chosen by chance, so it isn’t seen as a lottery or raffle, and No Purchase Necessary laws won’t apply.

That said, you can run incredible contests that ask users to create and share photos of your product in action. You can make this type of promotion with RafflePress’s contest app. Contests such as these are an excellent way of increasing brand awareness and are free for users to take part.

Now that you’re aware of the different prize promotions let’s explore what No Purchase Necessary means.

What Does No Purchase Necessary Mean?

No Purchase Necessary laws mean that you cannot ask participants to buy something or make a payment to enter your giveaway.

The details of these laws may differ depending on the country. Yet, in general, they say that if you’re running any type of prize promotion, where the winner is chosen at random, you can’t:

  • Require users to buy something to enter.
  • Let users increase their chances of winning by buying something.

Providing Alternative Methods of Entry

Despite No Purchase Necessary laws, you can still ask people to enter your giveaway by purchasing something. Yet, you should always offer a free alternative method of entry (AMOE).

Alternative methods of entry are free ways people can enter your promotion without making a purchase.

For example, let’s say you’re running a giveaway that allows users to buy a product to enter. In this scenario, you should also offer a free way to enter that doesn’t require a purchase, which awards the same number of entries.

If you provide free alternative ways to enter, making a purchase is no longer compulsory. It also doesn’t give users increased odds of winning. This means your promotion is no longer violating any purchase laws.

Important: Make sure users can’t get entries for making a purchase AND completing your alternative entry method. This would give them an unfair advantage.

Some easy ways to add free alternative methods of entry to your promotion include:

With RafflePress’s easy-to-use giveaway app, we offer all of the above AMOE so you can create a compliant giveaway contest with just a few clicks.

Here’s an example you can play with to see for yourself:

You can also use the Giveaway Rules Generator to add terms and conditions to your giveaway widget automatically.

Easily generate contest rules in seconds

It will ask some simple questions such as your sponsor’s name, address, email, and more. Then it will use the answers to create a set of guidelines your participants can reference.

Global No Purchase Necessary Laws by Country

No Purchase Necessary Laws prevent promotions like giveaways and sweepstakes from asking people to pay to enter. That is unless a free alternative entry method is available.

Yet, it’s essential to know that these laws don’t always apply to every country. Plus, what is considered as payment varies from country to country.

To help you find the laws that apply to you, here are some No Purchase Necessary laws from various countries worldwide. The table below also shows you which countries require you to offer a free Alternative Method of Entry (AMOE).

CountryNo Purchase Necessary LawsAMOE
ArgentinaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
AustraliaPurchases allowed.No
AustriaPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
BelgiumPurchases are allowed.No
BoliviaPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
BrazilPurchases allowed.No
BulgariaPurchases allowed.No
CanadaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
ChinaPurchases allowed.No
ColombiaPurchases allowed.No
Costa RicaPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
CroatiaPurchases allowed.No
Czech RepublicPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
DenmarkPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
Dominican RepublicPurchases allowed.No
EcuadorPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
FinlandPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
FrancePurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
GermanyPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
GreecePurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
Hong KongPurchases allowed.No
HungaryPurchases allowed.No
IndiaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
IrelandPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
IsraelPurchases allowed.No
ItalyPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
JapanPurchases allowed, but limits are placed on prize values.No
LithuaniaPurchases allowed.No
LuxembourgPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
MalaysiaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
MexicoPurchases allowed.No
New ZealandPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.No
NicaraguaPurchases allowed.No
NetherlandsPurchases allowed.No
PanamaPurchases allowed.No
ParaguayPurchases allowed.No
PeruPurchases allowed.No
PolandPurchases allowed.No
PortugalPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
Puerto RicoPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
RomaniaPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
RussiaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
Saudi ArabiaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
SingaporePurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
SlovakiaPurchases allowed.No
South KoreaPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
SpainPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
SwedenPurchases allowed.No
SwitzerlandPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
ThailandPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
TurkeyPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
UkrainePurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
UruguayPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
United KingdomPurchases allowed providing users purchase products at the regular price (e.g., no extra cost to enter).No
United StatesPurchases not allowed. Campaigns requiring a purchase must offer free alternative entries.Yes
VenezuelaPurchases allowed.No

If your country isn’t listed in this table, you should seek legal advice. Or you can avoid requiring people to purchase to enter and offer a free alternative entry method.

Important: At RafflePress, we can only offer general advice about giveaway laws. For specific and up-to-date legal advice, you should seek professional legal counsel.

That’s it!

We hope this article has helped you learn why your giveaway needs to comply with purchase laws.

If you’re not sure which tool to use with your promotion, check out this comparison of RafflePress vs KingSumo to see which contest app is the best choice for you.

If you found this article helpful, be sure to join us on YouTube, Twitter, and Facebook for more giveaway guides and tutorials.

Comments

  1. Mark Will says:

    Rafflepress is the best wordpress plugin for giveaway, but so far, it not receive big updates with nice features for a long time, any news upcomming? Please guys, keep working on this plugin!

    1. Stacey Corrin says:

      Hey Mark,

      Keep an eye on the blog. We’ll be announcing a new update very soon!

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