The Legalities of Giveaways

I recently came across a comment on a blog about the legalities of bloggers running giveaways and was surprised to read that many of the giveaways that we, as bloggers, do are actually not functioning within the confines of the law.  Upon reading this I decided to do a little research and found out some very interesting information.  Before I share any of that with you, let me just state that I am NOT a lawyer nor do I play one on TV.  These nuggets of information are just an FYI and if you have any real concerns, it would be advisable for you to seek professional legal assistance.  Let me also add that these laws are going to depend on a lot of factors such as where you live and where the winner of your giveaway lives.  I found it very difficult to find much about giveaways other than what pertains to the United States and a bit of information on Canada.

Here’s what I learned:

While bloggers generally just use the term “giveaway” as an all inclusive one, there are actually different categories of giveaways.  Sweepstakes occur when a winner is chosen randomly from among the entrants with no other requirements being made of them.  Hence, sweepstakes are why you’ll see businesses saying things like “No purchase necessary”.  These are pretty much safe and legal. 

Contests involve some kind of achievement – for example, I’ve seen a blog that regularly runs contests where the winner is chosen by submitting the best photograph.  The difficulty with a contest is most likely with the details – ie setting out and adhering to the details of the contest and being able to prove that they awarded the prize based on merit; that there was nothing biased going on.  Recently, I took part in a contest where it became quite clear that the voting system was being manipulated (not by those running the contest and when they realized what was going on they no longer used that voting system); so, contests are legal but yet, they become a little more complicated to run and more open to the possibility of someone filing a dispute.

Finally, there are lotteries and from what I’ve read, these are governed by the most complex laws of all.  In general, a lottery may only be state-run or in the case of a charity, raffles are often allowed but require some sort of procedure to become authorized and can only done by the charity themselves.  A lottery means that in order to enter your giveaway, the person has provided some sort of “payment”.  This is where things can get dicey.  A payment is not simply money.  Depending on where you live (and it can vary not only country by country but also state by state), what counts as payment can be very widely interpreted.  In some places, for example, something as simple as asking the entrant to visit your sponsor’s site to find a piece of information and tell you this information in order to win can be seen as payment.  For example, recently I have seen people running Pinterest scavenger hunts.  They sound like fun and I had been planning to hold one myself until I realized that this could be considered a lottery and there could be serious ramifications to me doing so.  Even something as simple as asking an entrant to tweet about your giveaway in order to be given an entry (or extra entry) would likely, in some places, be seen as “payment”. 

Even doing a giveaway for charity is not without these issues!  Raising money or even collecting donated items for a charity as a requirement for entrance into a giveaway would be considered illegal in most places (unless you are a member of the charity’s governing body in which case you would have your own set of rules for charitable organizations to follow and as described previously, you would have to go through the state’s legal requirements to register your giveaway).  Again, I’d like to do a giveaway on behalf of a charity, but at this time, I can’t do so without most likely breaking the law and putting that charity’s status in jeopardy (if they have sanctioned my giveaway). 

One thing that became very clear to me in doing this research was that it’s vital to ensure that when you do run a giveaway of any sort, that you clearly explain all the details of it:  precisely what the person will win, beginning and ending dates of the giveaway, how to enter (remember that if you give the entrant any requirements to fulfill in order to enter other than one based on being the best at a certain achievement, you are likely running a lottery and this is almost always illegal), how the winner will be picked, and so on.  And then, of course, you must ensure that you adhere to these details!  One final item that you’ll want to include in your giveaway details is in what areas (countries/states) your giveaway is available. 

Living in Canada, I always love it when bloggers say that their giveaways are open to international winners but after completing this research, I realize that this does open up its own set of complications.  It then becomes an issue of not only the laws of your own state/province/country but also those of the potential winners.  I have learned that in Canada, you cannot award a prize based solely on random chance – the entrant must answer a skill-testing question before they can actually receive the prize!  If the winner is from Quebec, a whole new set of requirements come into play, partly because of the French language regulations.  It is understandable that bloggers might want to limit their potential liability by limiting the areas in which potential winners can live and one source said that it was advisable to add the words “void where prohibited” to any giveaway. 

I don’t know about you but I don’t have access to a legal team who can advise me on my giveaways (although this information did come from several lawyers who were offering it as general advice not as legal counsel) and I certainly don’t want to risk getting in trouble for running an illegal lottery, so to be on the safe side (unless I find out differently in the meantime), I’m going to be only doing either contests or most likely, sweepstakes (random draws) for my upcoming giveaways.