Sweepstakes and text sweepstakes have become a popular way for businesses to build some excitement and connect with their audience. But a surprising number still don’t follow the rules when running a sweeps. And that can lead to serious legal headaches.
Take our advice use these tips to keep your text to win sweepstakes out of trouble and away from the attention of regulators.
1. Always use official rules… and don’t change them once the sweepstakes begins.
Always have official rules in place before you start your first campaign. While we have templates available for you to use, it’s best to have an attorney review your rules. This way you’re sure to cover all potential risks to your specific business.
Another important thing to keep in mind... never change the rules once your sweepstakes begins. Not only will it cause confusion for your entrants, it could also open you up to legal liabilities.
2. Follow rules for sweepstakes AND text messaging.
Launching quickly can be a good thing, but not if you skip a few requirements. Follow the rules so you don’t land in hot water with the FCC or the FTC.
The FCC regulates SMS programs under the Telephone Consumer Protection Act (TCPA) in the U.S. You’ll need to understand how these laws apply to your campaign and the disclosures you’re required to make. Take a look at our post, Are You Complying with the Rules of Text Message Marketing?
Keep in mind also that certain industries and states have their own rules for sweepstakes as well. Alcohol brands, for example, have to get their sweeps pre-approved in certain states.
3. Make sure to bond or register your sweep when required.
In some states, you must register your text sweepstakes if the prizes are over a certain dollar amount. This is why we encourage clients to keep prizes under $5,000 in value. Check to see if you have to bond your sweepstakes. Keep in mind that these states also have an advanced deadline for taking care of these issues, so make sure you don’t leave things until the last minute or it could derail your entire campaign.
4. Understand what “no purchase necessary” really means.
While the spirit of sweepstakes involves free entry, the phrase “no purchase necessary” doesn’t actually mean that entrants can’t buy something in order to enter. For new products or brands with loyalty programs, you can actually encourage a purchase with entry, as long as you also have a free entry method or Alternative Method of Entry (AMOE).
Take this advice to heart. By following a few rules, you can benefit from the advantages of running a text sweepstakes, while avoiding big legal issues.