Promotional Giveaways—Are You Legal? by Laura McClellan

Laura McClellan is an attorney and writer. Today, she's giving us a general heads up on using those popular giveaways to market ourselves and our books. -- Sandy

Laura: Many writers use giveaways as a form of marketing, to gain attention for their books or subscribers to their blogs. They can be effective, and readers love them, but many of us are not aware that there are legal requirements that must be met. The full scope of the requirements is too great to adequately address in a short blog post, but I’ve tried to hit the highlights. Please note: this article contains only a general, very superficial, discussion and does not constitute legal advice. You should consult an attorney for legal advice concerning your specific activities.

The main thing to know is that a giveaway in which the winners are drawn at random may be considered a sweepstakes. Each state has its own laws governing these, but the laws are similar in many ways from one state to the next. Following are some of the basics you should think about in planning your giveaway.

Registration Requirements: Some states—for instance, New York, Rhode Island, and Florida—require some sweepstakes sponsors to register with the state prior to commencement of the promotion. Usually this applies if the promotion is based on chance (i.e., a random drawing) and the total value of prizes awarded exceeds some minimum dollar amount (e.g., New York and Florida set a $5000 minimum, while Rhode Island’s minimum is only $500). Check the website of your state’s Secretary of State to see if there’s such a requirement, and what the process and costs would be.

Consideration: In some states, the act of entering the sweepstakes by getting online (or, for example, submitting a blog comment or posting a tweet about the contest) may constitute “consideration” (a legal word for compensation) to the sponsor. It’s advisable to offer an alternate entry method such as a mail-in entry or toll-free number.

Geographical Restrictions: The Internet offers worldwide exposure, which is a boon for marketing, but it could subject your giveaway “sweepstakes” to foreign laws that may actually prohibit this type of online activity. Consider restricting participation to U.S. residents only, unless you’re aware of and intentionally complying with a foreign country’s laws.

Age Eligibility Restrictions: Similarly, consider restricting participation to those over the age of 13, since an online promotion or sweepstakes that gathers information from children under 13 probably is subject to federal COPPA (Children’s Online Privacy Protection Act) requirements.

Timing of Entries: Specify both start and finish dates and times, including the time zone. For example, “All entries must be submitted between 12:01 am EST on August 1, 2014, and 11:30 pm EST on August 31, 2014.” If you offer a mail-in alternative (as discussed above), specify the postmark deadline.

Official Rules: A sweepstakes sponsor should publish official rules and make them available to potential participants. Those rules should provide specific information addressing the issues discussed above, including:

• an opening paragraph, in all capital letters, stating that NO PURCHASE IS NECESSARY and including the restrictions for entry;
• the sponsor’s address;
• the methods for participating;
• a description of each prize, including verifiable retail value, odds of winning, and any restrictions, limitations, or conditions associated with the prize;
• the method of redeeming the winning entry;
• eligibility for participants (e.g., age, residence, etc.);
• any general conditions (e.g., applicability of federal, state, and local laws and regulations, submission deadlines, etc.);
• a statement of limitation on the sponsor’s liability and a disclaimer of warranties (the latter including specific language in all capital letters);
• a choice of law provision; and
• information about how a list of winners may be obtained.

In many cases specific language is required to protect both the sponsor and the participants. An example of official rules used by one blogger group can be found on the well known Seekerville blog at http://seekerville.blogspot.com/p/legal.html. (NOTE that these rules state they were most recently updated in September 2013, so they might not be current; they also might not be sufficient in your state.)

Giveaways are a fun and easy way to increase your visibility and boost engagement at your website or Facebook page, but be sure to learn and comply with the laws governing them in your state. Feel free to contact me if you have questions.

Did you realize there is so much involved in those author giveaways that are so popular? Do you have questions for Laura?

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Laura McClellan (www.laura-mcclellan.com) has been married over 35 years to the same man (she says she was a child bride). She’s mom to five, grandmother to five, and a partner in a large Dallas law firm. During her “spare time” Laura is polishing her first novel, a winner in several fiction contests.