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Running a trade promotion in South Australia: Its a little more difficult

To conduct a trade promotion in South Australia with a prize pool of over $5,000, or where prizes are awarded instantly i.e. via a game card, a business must apply for a permit from Consumer and Business Services. The requirement to obtain a permit and to conduct the trade promotion in accordance with the Regulations and the guidelines are important to ensure that consumers are protected and that legitimate competitions are conducted. Similar requirements exist in other Australian States and Territories including NSW, VIC, the ACT and WA.

There are some discrepancies apparent in the requirements for conducting a trade promotion in South Australia which make it more onerous to do so in South Australia than in any other Australian State or territory. These are:

  1. Requirement: The requirement to publish winners of prizes of over $250 in a newspaper, unless the lottery was advertised in a particular publication or entry was only accepted via a website. In VIC, amendments that came into effect on 16 August 2012 reduced the requirement  so that only winners of prizes over $1,000 needed to be published and that those winners could be published online for 28 days (regardless of how people were to enter or where the lottery was advertised.) South Australia is the only state which generally requires publication in a newspaper (unless one of the exceptions apply)
  2. Requirement: When submitting a permit application, an application fee must be paid. In South Australia, there is a schedule of fees to be paid which are dependent on the prize pool in the trade promotion. South Australia’s permit fees are one of the highest in Australia. To submit an application for the one promotion to Victoria would cost a business $333.80. To apply for the same permit in South Australia with exactly the same trade promotion would cost a business $3,525. i.e. more than 10 times the VIC application fee. If that same business wanted the permit to be assessed within 5 business days (something that a state like NSW would do for no extra cost) they would need to pay a ‘premium fee’ of over $7,000. The costs and timing involved in obtaining an SA permit has led to a number of companies simply excluding South Australian residents all together.

Whilst there are good reasons for having businesses comply with the regulations some regulations do make it difficult to do business. We are asking for minor changes to address the above and will keep you posted.

Competition Fundamentals Part 4

Extra care should be taken when conducting a competition draw to ensure that all valid entries are given a fair and equal chance of winning. The methodology used to  determine the winners must ensure that the outcome is random and that there is no risk of interference with the results of the draw.

If more than one prize is to be awarded in a draw, the Major Prize should be drawn first. It is very important that the competition draw be held on the date and time specified in the competition terms as a member of the public or a regulatory authority may come and inspect the draw to ensure that it is conducted correctly.dice

Electronic draw systems

If you are planning to conduct an electronic draw you must ensure that the system you use, and the methodology you follow, is approved. 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.

If you are using the services of a third party provider you should ensure that they are able to provide you with each of the above.

Permitz Group have an approved electronic draw system and can conduct an electronic draw on your behalf for a low flat fee provided that the total you are giving away is less than $10,000.

Prior to contacting a winner extra care should also be taken to ensure that the entry was compliant. If the winner still needs to verify their age or provide a proof or purchase you should refer to them as the ‘drawn entrant, subject to validation.’ In all cases ensure that you comply with the terms and conditions and permit conditions.

Independent Scrutineers

If the total you are giving away in a draw exceeds $10,000 you will need an independent scrutineer to oversee the draw.

According to the OLGR”

“The scrutiniser observes the draw process and decides to the best  of that person’s knowledge and  belief whether all entries to the lottery have been treated equally, and that no person has received an unfair advantage or unfair gain. The scrutiniser should take nothing for granted and should look directly at all relevant activities when a draw is undertaken.”

“An independent person is a person who, except for his or her involvement with the scrutiny of the draw:

• is not otherwise concerned with the management, conduct or promotion of the lottery for which the permit is issued

• is not a director, employee or otherwise employed by, or under contract to, the benefiting business or trade or an associated company, business or agency.”

The individual who oversees the draw must also complete a stat dec to the effect of the above.

If the value of prizes to be awarded in a draw is over $20,000 you must also ensure you comply with the requirements applicable from SA. Additionally they require that scrutineers be member of the classes specified including a Justice of the Peace or a Notary Public.

What about unclaimed prizes

If you have conducted a draw and attempted to contact the winners in accordance with the terms and conditions you may still have trouble getting a response. In such a situation you will need to take all reasonable steps to get into contact with the person drawn.

For a national promotion the general requirement is that you wait for three months prior to conducting an unclaimed prize draw. This gives the first person drawn a good opportunity to get into contact with you.

 

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