Common Errors in Competition Terms and Conditions

When planning a trade promotion or competition, you will need to quickly turn your mind to the competition terms and codnitiosn.

Competition terms and conditions set out the way that your competition will be run. In this article we look at some of the common errors in chance-based competition terms and conditions.

1. Set out the Terms and Conditions

Terms and conditions need to specify the entire entry process. As we have noted previously, to attract more entrants it is important to ensure that the entry process is as simple as possible.

When considering the entry process, break it down into small steps. For example, an entrant may need to go to your website to enter. Break that down into the URL, the entry period, the details that need to be provided, and whether the entrant needs to also agree to the terms and conditions.

Any limitations on who can enter need to be clearly stated. For example, if you are running a competition that is only open to those over the age of 18, you must clearly state this in the terms and conditions.

2. Adqeuately Describe the Prizes

Prizes must be described in detail. You are not able to exclude taxes from prizes, i.e. meaning you are not able state that the winner will be responsible for GST, airport taxes and so on.

When offering a travel prize, ensure that you note whether or not transfers and accommodation are included (including the star rating of the accommodation) and the room type.

3. Address all mandatory requirements

Various States have specific requirements for terms and conditions. For example, in NSW you are required to note that cash prizes will be paid via crossed cheque.

A number of states require that you have an unclaimed prize draw no sooner than 3 months after the original draw if the prize remains unclaimed by that date.

You will need to check each state and territory guideline to ensure that you terms and conditions comply, or you can simply get in touch with us.

When do you need a Trade Promotion Permit?

We are back in 2019, already working on some exciting promotions.

One of the questions we are often asked is when trade promotion permits are needed?

Have a bright idea for a competition? Do you need a trade promotion permit?

The first consideration is whether you are planning to run a competition based on skill or chance. A competition based on skill involves no element of chance in the determination of winners. For example, if you run a promotion where entrants submit an answer to a question in 25 words or less and you judge the winner (being qualified to do so), then you are running a competition based on skill.

A competition based on skill does not require a trade promotion permit. Click To Tweet

Now oftentimes chance based promotions are preferred as they are easier to enter and result in more entries. You can have whichever entry criteria you wish. For example, you might wish to have entrants buy your product or service to enter. A competition based on chance may required competition permits.

The next consideration is whether your competition will be open nationally or in specific states. The states that require competition permits are the Australian Capital Territory, South Australia, and New South Wales. New South Wales is planning to remove the need for competition permits any day now- we will keep you updated. Currently, a competition permit is required from New South Wales regardless of the following final two factors.

The final two factors are whether you are running an instant- win promotion, if you are you will always need a permit from South Australia, and what your total prize pool is. If your total prize pool is over $3,000 in the Australian Capital Territory or $5,000 in South Australia, then you will need a permit from each respective state (or territory and state!).

If you have any questions please feel free to get in touch- info@permitzgroup.com and we will respond immediately!

When do you need a competition permit?

Competition permits are usually required for chance-based competitions. As a result of the different regulations in each State, it can be difficult to work out when a permit is required and how a permit may be obtained. The below sets out when a permit is required in each state.

Game of Skill vs Game of Chance

A competition permit will never be required for a game of skill. To be classified as a game of skill, the competition cannot have any element of chance i.e. competition draw involved in the determination of winners. Examples of games of skill include those asking entrants a question with answers then judged on the basis of merit and photo or video submission competitions.

A mixed game of skill/ game of chance would be considered a game of chance.

The below summary relates solely to games of chance.

NSW

A competition permit will be required regardless of your prize pool. NSW are the cheapest and quickest State, so you can set up a competition in NSW with ease, provided that your terms and conditions comply with the various requirements.

NSW require an independent (or approved non-independent) scrutineer of draws over $10k in value.

SA

A competition permit will be required regardless of your prize pool if your competition is instant-win.

Otherwise, i.e. if you are simply drawing your winners, you will only need a competition permit from SA if your prize pool is over $5,000. Allow significant time for SA to issue a competition permit if required.

A particular requirement of note in SA is that you must use approved software if you are drawing your competition winners electronically.

SA require an independent scrutineer of draws over $20k in value.

ACT

ACT changed their laws in November last year. You will now only need an ACT permit if your prize pool is over $3,000. There are some exceptions to the need for permits but if you plan to promote your competition on social media, or in print or TV, these will not apply.

NT

If your prize pool is over $5,000, however a permit is never required if you have a permit from another state. i.e. if you run a national competition and obtain a permit from

WA

All competitions must comply with the permit conditions found on the regulator’s website, but there is no need to apply for a permit here.

TAS and VIC

No need for a competition permit in either VIC or TAS.

QLD

No need for a permit here. As in SA, you use approved software if you are drawing your competition winners electronically.

About us

Our work is covered by PI insurance and we guarantee that we will obtain the permits you required. Unlike other providers we apply for permits online, saving extra permit fees and reducing the time it takes to obtain permits.

Permitz Group has a very straight forward briefing process and can provide you with terms and conditions within 24 hours.

Obtain an obligation fee quote today.

 

Use Random Numbers to Your Advantage

An understanding of random numbers can give you unexpected advantages, including the ability to win more and more often.

Over the past month, we have been working on two random competition draw systems- used to determine competition winners. I had some vague idea that random numbers could be useful in other ways, and indeed, they can.

Did you know you can use Random Numbers to Win More and More Often?

Read more here: https://www.linkedin.com/pulse/use-random-numbers-your-advantage-connor-james 

Competition Permits Experts, Special Offer

During the months of Jan and Feb 2016, we will be offering Free Electronic Draws for new competitions which are sent to us (for which we apply for permits).

There is a great degree of variation in the cost of setting up an electronic draw. Some providers are asking for as much as $249 per draw!

Our Service comes with the following Benefits:

  • The work we do is Fully Insured, don’t trust an uninsured provider;
  • We offer a Fixed fee, that includes drafting terms and conducting a draw;
  • We will refund our fee in Full if we don’t obtain permits;
  • We offer credit terms to approved customers and accept purchase orders; and
  • You can Call Us as many times as we like for no- cost;
  • We have a second-to-none understanding of competitions and the need for a competition permit; and
  • We are Trusted by Australia’s Leading Brands and have Consistently positive Feedback

All of our draws are conducted using an approved electronic draw system and are overseen by a Solicitor! Any draw which has a prize pool of up to $20k is eligible, as we are authorised to oversee these.

Our computerised system has been reviewed by the lottery departments and is approved.

To take advantage of this offer, simply submit a quote request! There will be no fee for the electronic draw, simply email us the list of entries and get the winner sent back to you.

Our fee, to draft terms and conditions and apply for permits starts from $220 and will ensure that your competition is compliant with the relevant trade promotion permits. We work with a large range of clients from Kia, Hilton Hotels, National Geographic and more.

If you would like more info on the requirements relating to competitions please get in touch. Competitions are able to be conducted by a business seeking to promote their brand or service. Entry into such a competition must be free (although entry can be conditional on purchasing a product or service). Please note that we cannot help if you planning to charge a fee to enter your competition.

Permitz Group can be relied upon to draft compliant terms and conditions and apply for all required competition permits.

We also offer a FREE initial consultation and will confirm over the phone if permits are required for your competition.

For examples of promotions in which we have been responsible for terms/ permits, see the videos below.

A unique way to award prizes..

Wouldn’t mind this prize myself..

 

We look forward to working with you in 2016!

Competitions that Stand Out

Be unique

It’s peak time again for marketing in Australia, as brands seek to stand out in the Summer. Consumer competitions are one way to do this. I am involved in hundreds of competitions every year and see some great examples.

Competitions are effective for many types of businesses. Just last week, we worked on competitions conducted by charities, clothing brands and hotels. We also had the pleasure of working on a competition connected to Sir Richard Branson.

Here are four tips for running successful competitions:

1. Many and often- Competitions can give consumers a sense of excitement. Running competitions regularly associates your band with that feeling. For example, running regular competitions on Facebook will encourage consumers to keep checking back in, to see what they can win and to see if they have won. There is a specific type of licence which can be useful for this strategy, called a blanket permit, allowing a business to run as many competitions as they like.

2. Keep entry simple- I am often involved in competitions from start to finish, and as a result, see the number of entries received. There is a direct correlation between the ease of entry and the number of entries received. Whilst this may sound obvious, too many competitions ask you to enter online and then share your entry on Facebook and then purchase a product and then share again. Resist the temptation to overexploit the potential of a competition.

3. Keep it interesting- Prizes and the method of entry need to be designed for your intended audience. Whoever your audience, there will always be a positive response to simple gamification type tricks, like awarding bonus entries (so long as the bonus entries are not too hard to gain.

4. Keep it proportional- Larger cash prizes do not necessarily result in a greater number of entries. Essentially, a competition is a trade between the chance to win (given by you to the consumer) and the disclosure of personal information or the purchase of a product by the consumer. The trade should be a fair trade. Just as important as a prize pool is an entrant’s perception of their chance of winning. There won’t be much of a difference in terms of how many entries you receive if you give away $10k vs $20k. If you are planning to run a massive competition, consider Prize Insurance, which gives entrants you draw the chance to win an amount such as $100k or $1 Million- the cost of such promotions is much lower than you might think.

For competition ideas, info on the requirements or competition permits, send me an email to info @permitzgroup.com or call me on 0406 509 198

Permitz Group joins ADMA

Permitz are committed to the improved understanding of trade promotion laws across Australian businesses. The company has written a number of guidelines aimed at explaining the complex maze of trade promotion laws in simple english.

Permitz has recognised the important role that industry associations play in promoting the industry and assisting members. Permitz identified ADMA as being a key player in both representing the industry and improving general awareness of regulatory obligations in relation to marketing, privacy, spam act compliance, among others.

As Australia’s largest marketing and advertising association, ADMA protects, supports and champions excellence in data-driven marketing and advertising in Australia, and beyond.

By joining ADMA, Permitz has clearly signaled its intention to continue to focus efforts on supporting the industry and those who work in advertising or marketing roles.

ADMA LogoLearn more about ADMA here.

For information about the need for trade promotion lottery permits, competition terms and conditions, Facebook competition requirements, please send us a request here.

 

Four Steps to Successfully Integrate Competitions into Your Marketing Strategy

Successful competitions are conducted within a wider marketing strategy. Consistency is important to ensure that the objectives of a competition align to wider marketing strategy. To achieve consistency, the context and objectives of a competition need to be considered throughout, from planning to execution.

From experience with many promotions, Permitz has identified a number of key considerations in the design and execution of competitions that will assist in the success of a competition, within the wider context of a marketing strategy:

Step One: Consider the objective

There are a range of reasons to run a competition. For example, by requiring that entrants purchase a product or complete a transaction of a minimum value, a competition can assist in having a direct impact on revenue. If the objective of a company is to increase the average sale value, a competition may be successfully used to

Step Two: Consider timing

Competitions should be planned and aligned to other marketing events, important dates, and other factors such as weather. A chance to win a holiday to a hot tropical paradise is much more enticing when its not already hot and humid at home!

Step Three: Consider the audience

Any consumer competition needs to carefully consider the likes and behaviour of the target audience. It is much more valuable to have a database of 1000 individuals who are likely to buy products or services than a database of 100,000 individuals who are unlikely to ever complete a purchase.

Prizes and methods of entry need to be individually designed to be aligned to the wants and behaviour of the target audience.

Equally important is the need for the proposed audience to know about a promotion. Advertising (in the right medium) of a competition is critical to ensure its success.

Step Four: Consider the overall message

Companies that run a number of smaller competitions are typically much more successful in achieving their objectives than companies than run one (or less) competitions a year. The frequency of competitions ties back to a company’s overall marketing strategy. Consumers respond well to ongoing incentives and are more likely to participate. There is much less of a connection between the prize pool value and number of entries than many assume. For the average consumer the idea of winning $1,000 is just as enticing as the idea of winning $100,000. It is likely that the higher prize pools decrease entrants’ perception of their chance of winning.

A single solution for companies running multiple competitions

Running multiple chance-based promotions over the coming year and want to speed up the permit process, whilst saving costs? The answer may be a blanket competition permit.

Benefits

A blanket permit allows you to set up a competition with no notice whatsoever, and works out to be a cheaper alternative to obtaining a number of individual permits.

Once you have a blanket competition permit you are able to use that permit number in each competition you run (provided that the competition complies with the requirements of that permit).

Rules of a blanket

A blanket competition permit runs for 12 months. The general rules of a blanket are:

  • The value of each prize must be $1,000 or less;
  • You must give away less than $100,000 over the life of the blanket;
  • You must give away less than $5,000 in each draw; and
  • You must keep records of each prize given away, the winners details and the promotion details.

States

To run competitions under a blanket you will need a permit from New South Wales and the Australian Capital Territory.

In NSW you can obtain either a Class B or a Class C blanket (different rules apply to each).

Conculsion

If you are running a number of smaller competitions, want flexibility in the competitions you run and see value in a blanket permit give us a call and we can obtain a blanket permit on your behalf.

From 21 June you will no longer need a competition permit in Victoria

As foreshadowed in a previous post, Victoria are removing the need for competition permits. Previously, if your prize pool was over $5,000 you would need to obtain a permit from NSW, ACT, VIC and SA. From 21 June, you will no longer need a permit in Victoria to run a chance-based competition.

From 21 June 2015, businesses, charities and community organisations will no longer need to apply to the Victorian Commission for Gambling and Liquor Regulation (VCGLR) for a permit to conduct a trade promotion lottery.

Impact on the cost of running a competition

The cost of a Victorian trade promotion lottery permit is $344.20. As a result of the change the cost of obtaining permits for any competition with a prize pool of over $5,000 in all States will decrease by $344.20.

Victoria are not the most expensive nor the slowest State in issuing competition permits. The cost saving is a definite positive but there won’t be a benefit in terms of how long it takes to get all lottery permits back from the remaining States.

A ‘free for all?’

Despite the fact that you will no longer need a lottery permit in Victoria for your chance-based competition, you will still need to comply with the guidelines in place in Victoria for businesses running competitions.

The VCGLR website will be updated on 20 June with a list of those conditions.

The competition terms and conditions that we draft on your behalf will comply with those conditions. Obviously, these conditions will include requirements to: give each entry an equal chance of winning, award the prizes you say you will award

Implications in other States

Other States may, but at this stage have not, follow the lead from the VCGLR. The Victorian regulator were highly regarded by trade promotion agencies, reviewing competitions against the regulations in a reasonable manner and for a reasonable fee (as much as a tenth that charged in other States).

In our opinion the best option would be for there to be a national system in place, in recognition of the fact that there is too much complexity in the different State and Territory laws and this simply ties business up in further red tape.

Permitz Group will continue to be able to offer first rate assistance in all areas of competitions. We have assisted a large range of multinational companies run competitions in Australia, New Zealand, the United States, and Europe. Our primary aim is to offer a single solution to the problem of complex and contradictory State based rules surrounding competitions and trade promotions

Click here for a copy of the letter from the Victorian Regulator: Competition permits in Victoria