It's more than a prize.

16 April 2021 | Reading time: 2 minutes

Trade promotions, such as competitions and other promotional games, are winners for generating hype for your brand. However, trade promotions are heavily regulated and organisations must ensure they comply with relevant laws, including state and territory trade promotion laws.

Below we discuss key considerations for running a trade promotion.

1.   T&Cs apply – be alert to the fine print.

While the requirements for terms and conditions differ in each state and territory, trade promotion terms and conditions generally need to include at least the following information:

Topic Details
Eligibility criteria Who can enter the competition? Consider any residency and age requirements.
Entry requirements What do entrants need to do to enter the competition?
Promotion period When does the competition open and close?
Prizes Total prize pool value and details of prizes (including any conditions regarding the receipt, acceptance or use of a prize).
Draw How, when and where the draw (and any redraws) will take place.
Winner announcements When and how winners will be announced.
Promoter details Full name, address and contact details of the promoter.

2.   Chance, skill or both?.

In Australia, trade promotions are split into the following 2 categories:

  • Games of chance: winners are determined by any means that includes an element of chance (eg random selection) or a combination of skill and chance.
  • Games of skill: winners are determined based on the demonstration of some skill or talent (eg creativity). If, at any point, chance plays a part in determining the winners, your trade promotion will no longer be a game of skill.

3.   Are permits required?.

Games of skill do not require permits in Australia. Whether a game of chance requires a permit will depend on which states and territories the trade promotion is running in and the total prize pool value.

4.   Keep it clean.

Trade promotion laws prohibit, or restrict the award of, certain prizes (eg tobacco products, firearms or ammunition, weapons, cosmetic surgery and alcohol). Furthermore, trade promotion laws, amongst other advertising requirements, prohibit advertising that:

  • encourages a breach of the law;
  • depicts children participating in a competition activity;
  • suggests that entering or participating in a competition will improve a person’s financial prospects; and
  • is offensive or against public interest.

5.   Other legal considerations.

In addition to trade promotion laws, take care to ensure your terms and conditions and the conduct of your trade promotion comply with other laws, including:

  • the Australian Consumer Law (eg your trade promotion terms and conditions and advertising must not be misleading or deceptive or likely to mislead or deceive); and
  • privacy laws (eg your collection, storage and use of entrants’ personal information may be governed by the Privacy Act 1988 (Cth)).

6.   The fun stops here.

Failing to comply with trade promotion and other relevant laws, including failing to obtain a permit (if required) may attract fines of varying amounts in each state and territory. Ensure you are informed about, and allow enough lead time to ensure compliance with, your obligations.

Get in touch with the Bespoke team if you want to discuss further.