Category Archives: Overview of competition requirements

Competition Fundamentals Part 5

In this article we discuss the process of competition design, ensuring the competition is conducted in accordance with the terms and any required permits.

Step One- Consider your objective

The first step is to consider what you want to achieve by conducting a competition. Common reasons for conducting a competition include:

  1. To encourage loyalty;Modern business concept
  2. To increase sales of goods or services;
  3. To incentivise sales staff;
  4. To launch a new product or service; or
  5. To gain insights into customers.

When planning, executing the competition and subsequently analysing the results it is important to come back to the work you have done at this step. The measure of success will be framed in this context.

Step Two- Plan the promotion

The second step is to plan the promotion mechanic, prizes, and timings. Here are some questions to consider:

  1. How will entrants consider their chance of wining a prize?. i.e. if you offer more prizes your entrants may feel more comfortable with their chance of winning. It is important to be clear with entrants and not to overstate the chances of winning. It is less commonly known that the chance of winning a prize in a competition is typically much greater than of winning a cash prize in a typical national lottery.
  2. Is the value of the prize commensurate to the difficulty of entry or the purchase required? i.e. if you are only asking for someone to provide their contact details, is it worthwhile giving away a million dollars? Equally if you expect someone to purchase a product, enter their details, answer questions will a low value prize attract many entries?
  3. Are you able to meet the timings and dates specified. Be careful to ensure that you are able to open, close, draw promotions in accordance with the dates specified in your competition. Also ensure you allow about a month between applying for competition permits and your first print deadline- as you need to include permit numbers in all advertising.
  4. Are people going to hear about your promotion? There is no point in building a website and expecting people to come. A competition must be integrated into a campaign which includes advertising that will reach your intended audience.

Step Three- Document and get approvals

Any promotion should be supported by clear terms and conditions which document the competition rules. Click here for considerations when drafting terms and conditions. The lottery departments have a number of requirements which you must comply with in respect to timings and inclusions in the terms.

Overview

 

Permitz Group can assist you with each of the above aspects. Whilst we specialise in competition permits we also have experience in sourcing prizes, assisting with competition design, developing a competition website, conducting an electronic competition draw, and managing winners. Once you have terms ready you will then need to apply for competition permits- refer to our earlier posts for more on this.

Competition Fundamentals Part 3

Competition terms and conditions are the rules which govern how you conduct the competition, who can enter and how someone can enter. Competition terms and conditions are important to make the conditions of entry clear, to avoid confusion, complaints and disputes. 

When drafting competition terms and conditions it is important to ensure that key terms are easily understood, are reasonable and clear to entrants. It is very important to ensure that each entrant has an equal chance of winning a prize.

Dates and timing

In competition terms and conditions you will need to state the various dates applicable to the competition including:

  1. The open date: when you will begin accepting entries;
  2. The close date: when the competition closes and entries can no longer be accepted (Note: the close date must be no more than 12 months after the open date)
  3. The draw date: when you will conduct the draw (Note: The draw date must be within 1 month of the close date);
  4. The publish date: when you will publish winners (Note: winners must be notified by email or mail within 2 business days of the draw and, if applicable, published within 1 month online or in a newspaper);
  5. Prize delivery: must occur within 28 days of the draw date;
  6. The unclaimed prize draw date: when, if prizes are unclaimed, you will conduct a further draw to distribute those winners (Note: the unclaimed prize draw must occur 3 months after the initial draw unless the prize must be taken by a particular date- in which case a reasonable amount of time should be provided); and
  7. The unclaimed prize draw publication date: when, if an unclaimed prize draw was required, you will publish those winners (Note: as with the original draw, winners must be notified by email or mail within 2 business days of the draw and, if applicable, published within 1 month online or in a newspaper).

It is important to ensure that you check that your dates take into account public holidays. i.e. you would not want to schedule a draw on a Saturday morning or on Christmas eve!
When noting times ensure you consider if Day Light Savings applies i.e. in NSW.

Prize descriptions

The prizes must be adequately described in terms and conditions for permits to be issued. For example saying that an entrant can win a holiday to NZ would be insufficient. The level of detail supplied for a holiday prize should include the class and number of flights, the departure city, the departure dates (if restricted), they type of tickets, the value of tickets, the type of accommodation (including Room type, number of nights, and name or rating of hotel), confirmation on what activities are included, confirmation on whether transfers are included and the RRP value of each component. All flight associated taxes and surcharges i.e. energy surcharges must be included in the prize, i.e. it is not okay to award a prize that a winner needs to put money towards to take.

Condensed terms

The state gaming authorities specify mandatory information that must be included in all advertising of a competition. This includes the permit numbers, key dates, any restriction on who can enter, how to enter, the Promoter’s details and the permit numbers.

Common pitfalls

Some of the common pitfalls with competition rules include:

  1. Not checking that the dates are achievable i.e. that enough time is allowed between submitting terms for permits and the open date (or the date that the competition is advertised);
  2. Failing to ensure that the dates comply with the requirements i.e. that an unclaimed prize draw is conducted more than 3 months after the initial draw; and
  3. Failing to adequately describe a prize.

Terms and conditions should be reviewed by a qualified lawyer. The above is a summary of the general requirements and is not intended on being a comprehensive outline of the requirements.

Competition Fundamentals Part 2

bigstock--D-Illustration-Of-The-Words-E-55697162 (1)Less Common Competition Examples

If you are looking at running a simple chance-based competition it is pretty easy to confirm if competition permits are required. If you are looking at running a promotion that is a little less straight forward you may need permits from some states but not others. In this article we look at some less-common competitions and the need for permits.

Mixed games of skill and chance

Some promotions do not fit neatly into either category. The general rule is that you will require competition permits if there is any element of chance involved. An example of a mixed game of skill and chance might be where entrants need to submit answers in 25-words-or-less which are judged by a qualified judge but then given a chance to win a major prize by just participating in the promotion. To determine the major prize winner a draw might take place. In such a situation the whole competition would need to be reviewed by the state gaming authorities. In such a situation it may be possible to split the promotion if the Promoter were looking to reduce the cost of permits.

Online gaming tournaments and fantasy sports team

Online gaming, as a promotion, is becoming more and more popular. We recently set up these types of promotions for an airline and car manufacturer. Online promotional games are typically linked to the brand and may include a prize associated with the brand. These types of promotions may require an entrant to register online, for free, and then play games for a chance to win.

The first question to answer is whether the competition involves an element of chance in determining the winners or in breaking a tie between finalists. In the case of an online game where winners are drawn this is a relatively easy question to answer. In other cases the answer is not so clear, for example an online game where there is some element of chance which may influence an entrant’s likelihood of winning.

A fantasy sports promotion is a good example of this. Some elements of the game may be outside of the control of the entrant i.e. weather or number of injured players. We recently assisted in the setup of a fantasy sports promotion. We asked each state whether permits were required and ACT was the only state with a firm policy that permits will always be required for such a promotion. In such instances it is better to exercise caution and either apply for permits or get an answer in writing from each state gaming regulator.

First ‘x’ to enter

Another less common type of promotion involves awarding prizes to the first ‘x’ to enter either in-store or online. The Promoter will have a set number of prizes to give away. These types of promotions encourage a quick response from entrants who don’t want to miss out on a prize.
These types of promotions are considered differently in each state.

NSW will typically require a permit for these types of promotions if the Promoter expects to receive more entries than prizes.In SA permits will be required if the prize pool to be given away is more than $5,000. In ACT permits will be required if there is an element of chance in the determination or sorting of entries i.e. if entries are posted in and the entrant has no control over the order in which their entry is received.

 

Knowledge Base

The various considerations when setting up a competition can seem daunting. Whether you are looking to set up a straight forward online competition or an instant win SMS or IVR based competition, Permitz Group can help.

To get updates on competition requirements and trade promotions, follow us on LinkedIn:


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As part of our commitment to share knowledge we have written a number of articles that will help you with your next competition. With an understanding of the requirements you will be able to confidently plan and execute your next competition.

To review articles on the following topics, please click on the links. If you have any questions please let us know.

How to set up a competition

Overview of competition requirements

Changes in the world of competitions

General discussion

To review articles on the following topics, please click on the links. If you have any questions please let us know.

Do I need a competition permit?

If you are considering running a chance-based competition there are a number of regulatory requirements that you need to be aware of. In this set of articles we provide a summary of some of the general requirements, assuming you are conducting a national chance-based competition.

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Do you need competition permits?

The first question to consider is whether competition permits are required to conduct a competition. If your proposed competition involves an element of chance when determining winners you then you will need competition permits. Competition permits are required from New South Wales and the ACT for any competition where winners are determined by an element of chance.

Competition permits are also required from Victoria and South Australia for chance-based competitions with a prize pool of over $5000. If you are conducting an instant win promotion you will need a competition permit from South Australia, no matter how much you are giving away.

In Western Australia a trade promotion lottery is a lottery conducted to promote the sale of goods or the use of services for which a cost (i.e. entry fee) cannot be charged to enter, other than the cost of the purchase of goods or services, at their retail- ordinary value. So long as you meet the prescribed conditions associated with a trade promotion lottery then you are not required to apply for a permit to conduct a competition in Western Australia. The Gaming and Wagering commission authorises companies to conduct a trade promotion lottery so long as each of the conditions are met. In a practical sense, Promoters must ensure that a copy of the competition terms and conditions are emailed to the Gaming and Wagering Commission of Western Australia.

The other States and Territories each have their own set of requirements which must be met when conducting a competition but do not require you to obtain a competition permit.

Common examples

The most common example of a chance-based competitions is one where winners are drawn randomly. Winners may be drawn manually, i.e. out of a barrel, or using an approved electronic system. Approval is required from the office of the Liquor and Gambling Commission in South Australia.

Approval is not required from New South Wales but the Promoter must ensure that they obtain two reports, an appraisal report and a draw procedure report. The Appraisal Report must detail whether the computerised system is random in its selection of winners. The Draw Procedure Report must detail the safeguards and controls in place to overcome any possibility of any person manipulating any stage of the draw or the announcement of the prize winners.

The other most common example of a chance- based competition is an instant win or scratch game card promotion. Such competitions will always require a permit from South Australia, New South Wales and the ACT. It is a requirement from New South Wales that terms and conditions for an instant win promotion include a statement that all prizes from the advertise prize pool will be distributed and that all claims prizes will be met notwithstanding the advertised prize pool being exceeded.

In the next article we will review less common promotion types (i.e. First x to register, combined games of skill and chance, and fantasy sports promotions) and the requirements for permits in relation to these promotions.

Facebook update! The good bits and some potential issues

By Connor James

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Facebook updated its Facebook Page Terms on 26 August 2013 and the changes have far reaching implications in the world of competitions and trade promotions. There is already a reasonable amount of commentary but in this article we want to just let you know what the changes are and how they will impact you.

Easier to set up and more options

The big news is that Facebook promotions no longer have to be administered via an application in Facebook. Previously entry into a Facebook competition could not be on the basis of purely ‘liking a page’ but now, it potentially could be. There are still some restriction on the ways that people can be allowed to enter, specifically on the use of Personal Timelines to administer promotions:

“Promotions may be administered on Pages or within apps on Facebook. Personal Timelines must not be used to administer promotions (ex: “share on your Timeline to enter” or “share on your friend’s Timeline to get additional entries” is not permitted).”

Examples from Facebook of what is now okay, include for a business to:

“a. Collect entries by having users post on the Page or comment/like a Page post;

b. Collect entries by having users message the Page; and

c. Utilize likes as a voting mechanism.”

These changes introduce greater choice in terms of the entry mechanics which can be used for a Facebook competition.

The challenge introduced by the greater range of options is for marketers to ensure that they continue to review and manage the risks. Under trade promotion laws there is a requirement to keep records of entries and winners, and to ensure that only valid entries are included in a draw.

An example of where this could be a problem is where a business runs a competition open only to Australian residents over the age of 18 with entry via ‘liking’ a Facebook page. Without the entrant providing their details there would need to be another way of confirming that entries are valid.

Publication of winners on Facebook

Another significant change is the removal of the restriction on publishing winners of a competition on a Facebook page. In the past we were constantly asked to justify why this restriction was in place and we are glad we won’t have to in future.

Where responsibility lies

Responsibility for a promotion conducted on Facebook still lies with the business who has set it up. Facebook promotions must still contain:

“a. a complete release by each entrant or participant of Facebook; and

b. Acknowledgement that the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.”

This in effect means that you (the Promoter) are responsible for ensuring that the promotion you run complies with Facebook’s terms and all other applicable laws. In Australia, significantly, this means that if you are running a chance-based competition you will still need compliant terms and conditions and competition permits.

For more information contact us or go to: https://www.facebook.com/facebookforbusiness/news/page-promotions-terms

Competitions to get Facebook ‘likes’

Facebook competitions are a good way of encouraging customers to ‘like’ your page and interact with your business. If you are going to set up a Facebook competition, make sure you do it properly.

Facebook has Pages Terms (last updated April 3, 2013) that govern any competition/promotion that you run on Facebook. It is imperative that you comply with Facebook’s Terms and the other regulations that apply to competitions. If you fail to do so, Facebook may pull your page down without warning. This in turn can lead to issues with the State Lottery, Fair Trading and/or Consumer Protection agencies.

Will it be worthwhile?

Before you decide to run a competition on Facebook consider whether doing so will be worthwhile. Is your brand or product targeted to those who use Facebook? Facebook is certainly popular, but it may not be an appropriate marketing platform for you. Having said this, with such a large number of dedicated users from all walks of life, you should not discount Facebook as a possible way of attracting new customers. Facebook ‘likes’ do not equate to customers so once you have the likes you will need to continue to work and impress to convert likes to customers.

It is surprising to see how many businesses, that do run Facebook competitions, are unaware of the requirements. Although many will get away with not complying, those that don’t will sure know about it.

Below we set out some of that the requirements you should consider.

So what do the Terms say?

Firstly, it’s important to note that there are many laws that apply to competitions and that Facebook’s Guideline does not give you a complete understanding of those laws. You must also consider consumer protection, privacy and trade promotion laws when designing and running a competition.

Here is a summary of some of the key points in the Guideline:

  • You must use a third-party developed application to administer your competition (either on a Canvas Page or a Page App). There are few applications around that you can use, such as Wildfire.
  • You can’t enter people into your competition simply by them ‘liking’ your page or uploading content onto Facebook or tagging photos. You can have people ‘like’ your page, but then must have them take other steps, i.e. register to enter the competition using the third-party application. If you are running a voting competition you cannot use the ‘like’ function to collect votes.
  • You must acknowledge that your competition is run by you and not by Facebook and include:

“a.    A complete release of Facebook by each entrant or participant.

b.    Acknowledgment that the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.

c. Disclosure that the participant is providing information to [disclose recipient(s) of information] and not to Facebook.

d. You mustn’t notify competition winners on Facebook. i.e. when you determine your winners, you can’t notify or announce them over Facebook.”

It is possible that you have seen a competition on Facebook that does not comply with some or all of the requirements listed above. Its important that you do ensure you do comply with Facebook’s Terms and any other regulatory requirements surrounding competitions- i.e. including the requirement to obtain competition permits from some Australian states.

Conclusion

A Facebook competition may be a very worthwhile method of getting people to like your page and interact with your brand. However, remember that there are a number of requirements to consider when running a Facebook competition. If you are going to go ahead with a Facebook competition, make sure that you check the current version of Facebook’s Terms and comply with all other requirements.

Win! Grateful customers

Most of Australia’s largest and best-known brands give away cash and prizes every year via competitions, but there’s nothing to stop soloists getting a piece of the action, too.

Competitions can work very well to promote what it is that businesses large and small sell. Entrants can be required to purchase a product or service. Some applicants lodge multiple entries by purchasing multiple products, which can give your bottom line a boost.

When it receives an entry in a competition, a business is provided with useful information about a consumer. However, it is essential to comply with the Privacy Act, National Privacy Principles and Spam Act in the collection, storage, use and updating of, this information.

Competitions also create a general feeling of excitement and interest in a business brand. As an alternative to discounting, competitions can be a more cost effective option in that predetermined prizes are being won as opposed to losing a percentage off an undetermined number of sales, which cannot be accounted or budgeted for in advance.

How to successfully run a competition and avoid the pitfalls

Compliance with all state based regulations on trade promotions is absolutely essential if you are running a chance-based competition. Compliance with Australian Consumer Law is also essential for all competitions, whether they are chance or skill-based.

For national competitions, where the winners are determined by an element of chance, there are a number of essential requirements. These include:

  • You need terms and conditions clearly setting out how and when people enter, the prizes including their value, the number of winners, and how you will notify the winners;
  • Trade promotion permits will be required from NSW and ACT (unless an exception applies) if your prize total is $5,000 or less;
  • Trade promotion permits will be required from NSW, ACT (unless an exception applies), SA and VIC if your prize total is over $5,000.
  • You cannot begin advertising your competition unless you have received all of the relevant permits.
  • You will need to display minimum (condensed) terms along with permit numbers in all advertising of your competition; and
  • You must collect entries, draw the winners and award the prizes you say you will in your terms and advertising. Records, including entries and winners, must be kept.

If you are going to run a competition, it’s essential to ensure that you comply with the relevant laws.

When conducted properly, the running of competitions can be an exciting and cost effective way to generate increased sales and further promote your company’s goods and services.

Have you run a competition? Was it a success?

How to set up a competition

By Connor James

The very first step in setting up a competition is to consider your objectives and the competition design. We discuss objectives and design further here.

Common reasons for conducting a competition include:

  1. To encourage loyalty;
  2. To increase sales of goods or services;
  3. To incentivise sales staff;
  4. To launch a new product or service; or
  5. To gain insights into customers.

Once you have decided to run a competition you will need to work out if you are going to run a skill or a chance-based competition. A skill-based competition is one in which the winners are determined on the basis of the skill shown in their submission and the winners are judged by qualified people.

A chance-based competition is one in which there is an element of chance in determining the winners. Competition permits are typically required for a chance-based competition. Click here for more information on when you will need competition permits.

There are a number of requirements which you will need to consider, all of which Permitz Group can manage on your behalf.

Thebelow diagram shows the basic steps involved in setting up a competition.

Overview

 

 

 

Privacy considerations for competitions

With Privacy Awareness Week commencing on Monday, 28 April 2013 it’s timely to have a look at the issue of privacy when conducting a competition.

Many companies are aware of and comply with their obligations under the Privacy Act and National Privacy Principles. These obligations are particularly important to consider when setting up a competition.

Competition entrants may not be aware of what a company will do with their personal information when conducting a competition and we certainly advocate for prior disclosure and openness.

Key questions to consider include:

How will we be collecting personal information?

Entrants are usually asked to supply personal information when submitting an entry into a competition. It is important to only collect personal information that is required to conduct the competition. If you are intending on using personal information for the purposes of marketing we would suggest you make sure entrants are fully aware of this and consent.

Do you intend on using an opt-in or require entrants to opt-out? The use of a tick box for opt-in to receive future marketing messages from your organisation is one way to make sure entrants are fully aware of your intention to market to them. If you are going to use electronic means to market to them, also ensure you comply with the Spam Act.

Will you disclose personal information?

Some disclosure of personal information may be required under a competition for it to be conducted effectively. For example you may disclose personal information to: i) prize suppliers, ii) the entity who will conduct the draw on your behalf, and iii) regulatory authorities.  Ensure that an entrant understands how you will disclose personal information.

Before setting up a competition you should check to ensure that these third parties have adequate measures in place to protect the personal information of entrants to your competition.

Will personal information be held securely?

Personal information can be very valuable and must be protected. When setting up your competition we suggest you give careful consideration to the security of the information you collect. A competition entry website should be protected as should any servers you use to hold personal information. After you have held the personal information for the period required under any trade promotion obligations it should be de-identified or destroyed.

Document it

A privacy policy is a must for any company looking to run a competition as is a Competition permit for any chance based competition. Your privacy policy is a document which clearly explains your position on the management of personal information.

Further information

For further information you may wish to contact:

Privacy Commissioner GPO Box 5218 Sydney NSW 2001

Privacy Hotline: 1300 363 992 Telephone: (02) 9284 9800 Fax: (02) 9284 9666