Risk management 101- consumer promotions

Other than ensuring that you obtain competition permits to authorise a chance-based competition, you then need to ensure you consider key risks. A failure to manage and mitigate risk in any promotion or consumer interaction can be disastrous.

The terms and conditions you develop for your competition must be adhered to at all times. Terms and conditions mitigate many of the risks associated with competitions by clearly setting out how someone can enter, the prizes on offer and how winners will be contacted. If you follow the terms and conditions to the letter you will avoid many of the common pitfalls. You should ensure that any onerous conditions are clear in your terms and conditions, including any limitations on taking the prize. The prize itself should be described carefully to avoid any future disagreement.

A failure to award the prize on offer may be a breach of the terms and conditions, the competition permit conditions and the Australian Consumer Law. It is very important to be transparent and act in accordance with your obligations.

Once you conduct the draw you should be careful to check that the winner complied with the terms and conditions (ensuring before the draw that only valid entries were included).

When communicating with the winner be careful to confirm their identity and to note limitations with the prize and any information that the winner must give you.

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Permitz work with chance-based competitions every day so are well placed to assist you in identifying and managing any risks.