A well-designed competition can create a buzz around your business—increasing brand awareness and giving way to a stream of free publicity, through word of mouth, social media, and in some cases, even mainstream media attention.
What can running a competition do for your business?
There are multiple ways a good competition can increase your business and exposure:
• Increase brand awareness
• Generate free or low-cost publicity
• Attract new visitors to your website and/or social media page
• Help build your mailing list and social media following
• Engage and build connections with customers
• Reward your customers and inspire more customer loyalty
Do I require a permit to run a competition?
Generally under Australian law, there are two main competition structures:
1. Game of Chance
This is when everyone has the same chance of winning (e.g. a lottery, or drawing a name from a hat). If you run a game of chance, you most likely require a state permit or license in the states you are running your competition.
2. Game of Skill
The winner is chosen against set criteria (e.g. a competition to create the best logo, or a 25 word or less question, with judges choosing the winner). You do not require a permit or license for this type of contest but need to ensure the winner is judged, has to answer a skill-testing question or must otherwise beat other entrants.
Make sure you check the specific state requirements, which vary from state to state.
What do I need to include in my competition?
(a) Competition Terms and Conditions:
It is important that the rules of your competition are clearly set out for your participants. Your terms of entry must comply with Australian consumer protection laws and should include information about:
• Duration of the competition, closing time, and dates when prizes will be drawn
• The prize itself
• Who is eligible to participate, and how participants may enter
• How winners will be chosen
• How winners can claim the prize
• What happens if a winner does not claim their prize within a certain period of time.
(c) Winning Entries:
There are also legal requirements for advising your winning entrants. You need to:
• Notify winners in writing
• Post the winner on your site and anywhere you advertised your competition e.g. social media
• Leave the winner notification up on your website and social media for 30 days.
Can I make people pay or buy a product or service to participate?
Generally, you can require people to buy a product (at normal retail price) in order to enter the competition. However, you will not be able to make people pay to participate in the competition itself.
What else do I need to comply with when running a competition?
All competitions must comply with Australia’s various consumer protection and privacy laws. Businesses must run competitions ethically and in a manner that is fair to consumers, or they will face stiff fines.
Some of the requirements include:
• The competition, and the surrounding promotional activity, must not be misleading or deceptive.
• The business must not make misrepresentations in relation to the competition. For example, the business should not suggest participants have a greater chance of winning than they do.
• The business must actually give away the prizes that it has offered and cannot substitute prizes.
• The prizes must match the description and value of the prizes that were advertised.
• The prize for winning the competition must not simply be the chance to enter another competition.
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