What is a Sweepstake?
A Sweepstakes is a type of giveaway where one or multiple prizes may be awarded to a winner or winners. They are the most effective type of prize promotion you can use to build brand awareness. Sweepstakes are strictly no purchase necessary to enter or win, and a purchase will not increase your chances of winning. The difference between a sweepstake and a contest is that for sweepstakes, people who sign up are chosen at random, while for a contest you need some sort of skill or purchased ticket in order to win.
Sweepstakes vs. Contests vs. Lotteries
It is important to know the difference between the 3 as they can be helpful to promote a business. Sweepstakes and contests are used more for marketing campaigns than lotteries. A lottery differs from a contest and a sweepstake because you need to purchase a ticket in order to participate. Lotteries are also only legal if they are run by the government, so following the rules and being cautious about them will help avoid any legal issues. When entering a sweepstake or lottery you are entering for a chance to win and when entering a contest the winners are chosen by a skill or effort. Whichever strategy a business chooses has to acknowledge the rules and guidelines that come with them.
The Importance of Rules
There is always the risk of running into legal issues if there aren’t specific rules set. How brands advertise their sweepstakes or contest is extremely important when promoting their product. There are also certain rule requirements on each platform that businesses need to be aware of when running a sweepstake or contest. Since each platform may have different rules to follow by, it is important that businesses are aware of their guidelines and which platform they plan to promote their product on.
Kohl’s Early Black Friday Sweepstakes
Another example of a sweepstakes is the Kohl’s Early Black Friday Sweepstakes on Twitter. This sweepstake runs from November 4th until November 10th 2022 which is much shorter than the HGTV Dream Home sweepstake. They are offering a prize to 21 people rather than just one person, but only one person will earn the grand prize of a $5,000 Kohl’s gift card. 10 first prize winners will earn a $1,000 gift card and 10 second place winners will earn a $500 gift card. You can only enter once and you must follow the directions on their Twitter post.
Kohl’s Sweepstakes Rules
Kohl’s published their rules on their Twitter and they also added a document. A requirement of the Federal Trade Commission (FTC) is that businesses promoting a sweepstake or contest must include a hashtag of either #sweepstake or #contest. The FTC noticed that when a business does not clearly state that the post is a contest or sweepstake or related to one, any followers or people hoping to participate would not know it was a contest and think its just a brand promotion. Kohl’s made sure to do that and added #Kohl’sBlackFridaySweepstakes in their Twitter Post.
Lands End launched a holiday sweepstakes that will run from November 1, 2022 until December 13, 2022. They are rewarding one person who is a United States or Canada resident above the age of 18 a $5,000 check. Lands End has official rules published that address legal issues.
Legal Requirements to Understand
- Official Rules: “Layout the compliance of your entire promotion – this set of rules must align with local, state, and federal laws. While there are many templates available online to draft your own rules, they advise a proper legal consultation to ensure full compliance. Many brands, marketers, and agencies make the mistake of selecting easy-to-use sweepstakes software to manage their promotions, often forgetting to include a proper set of rules. Be sure to avoid this, and consider a full-service option from a sweepstakes management company.”
- Sweepstakes Eligibility Requirements: “Official rules will always need to include an eligibility section that outlines who can participate and enter. In relation to state-by-state rules, you must clarify if residents in particular states are not eligible to enter. Age and residency requirements are typically the most common eligibility requirements to define who may or may not enter.”
- No Purchase Necessary: “No Purchase Necessary is the first statement within official rules to protect the participants, by law in the United States. Asking participants to take actions that require time, money, or effort constitute as consideration, and doing so can often constitute a sweepstakes as an illegal lottery, putting the brand or sponsors at risk.”
- Abbreviated Rules: “Abbreviated Rules are essentially a short-sum of your Official Rules and Disclosures. They may vary by state and may need to be tailored based on each state’s laws regarding promotions. If you plan on advertising your sweepstakes or contest, you may need to tailor the content of each ad based on these regulations.”
- Affidavits and Releases: “Winner Releases are usually required for high-value items such as cars, trips, and cash pools. The winner(s) of your promotion should be required to sign an affidavit of eligibility and often a liability or publicity release. These documents declare a winner as eligible to win and should be completed before they receive their prize.”