Your one-stop guide to running trade promotion competitions across Australia

As we edge closer to the festive season, there is an increased opportunity for businesses to promote their brand to hungry Christmas shoppers and ‘New Year’s Resolutioners’. Year after year, businesses large and small successfully utilise a variety of competitions linked with the sale of products and services to entice prospective customers.

In Australia, a competition aimed at promoting your business or brand is called a trade promotion competition. If you are planning on running a local or national trade promotion competition it is important that you do your homework, especially considering that each state and territory has its own special requirements for the operation of trade promotion competitions. For example, some states in Australia require permits to operate a competition where the winner is determined by an element of chance.

The most important question to ask yourself when running a trade promotion competition is how the winners are to be determined. This will impact upon the regulation and permit requirements that apply to the competition.

What type of competition will you be running?

There are two categories of trade promotion competition in Australia. Picking which type of competition you want to run will impact how much time you will need to invest into your pre-competition preparation.

A game of skill

A game of skill involves the winning entry being determined entirely on the merit. Games of skill are far less regulated than games of chance and across Australia, games of skill do not require a permit regardless of the scale of the prize offered. However, most states impose regulations on competition operation procedures, for example:

  • Clear guidelines as to judging criteria must be available for entrants;
  • All entries must be judged individually on their merit; and
  • One winner is chosen based on the skill and originality of their submission.

Whilst games of skill do not involve acquiring permits, they are often not as effective as games of chance at drawing large quantities of entrants.

A game of chance

Alternatively, games of chance are competitions where a degree of chance is involved in determining the winner/s. A trade promotion competition involving chance is called a Trade Promotion Lottery. These competitions are often advertised with slogans such as “instant win” and “spend over $50 to enter the draw”.

In South Australia, ‘instant win’ competitions have special regulations. If this applies to you, DSS Law can provide you with guidance.

If you intend to run a Trade Promotion Lottery, you will be required to comply not only with the state and territory laws regarding the operation of the competition, but in some states you will also be required to apply for Trade Lottery permits.

In some jurisdictions the permit application process is simple and involves a straight forward online form. In other jurisdictions, however, the process can be lengthy and complex. If not prepared, delays can result in a backwards and forwards between states.

Trade promotion competition regulations across Australia

The following image summaries the different state and territory regulations for trade promotion competitions across Australia; however, more detail on each jurisdiction’s laws is provided below.

Blue No permit required
Red Permits required regardless of value of total prize pool
Green Permit automatically granted when competition complies with regulations. Must apply for permit where competition does not comply
Yellow Permit required where total prize pool exceeds $5000
Orange Permit not required if a permit is acquired in another Australian State or Territory. If competition is only run in the Northern Territory, a permit is required where the total prize pool exceeds $5,000

 

 

Trade Promotions Lotteries in QUEENSLAND, VICTORIA and TASMANIA

Queensland, Tasmania and Victoria do not require businesses to acquire Trade Promotion Lottery permits. Despite this, each business is required to comply with a variety of state specific mandatory conditions. Some of the key conditions businesses must adhere to include:

  • entry into a trade lottery is free unless entry is gained by purchasing goods or services at their normal retail value;
  • if the Trade Promotion Lottery is to be drawn, the method of the draw allows each ticket in the draw a random and equal chance of being drawn;
  • all information relating to the competition is communicated and easily accessible to entrants including eligibility requirements, dates of the draw, publishing dates, etc.;
  • winners are notified and prize/s are awarded within the specified timeframe and by the specified means;
  • where prizes exceed $1,000 the names of winners are published in a newspaper, or online for a period of 28 days;
  • the winner of a prize does not incur a cost to accept a prize (other than a trivial cost);
  • where a prize is left unclaimed, it must be kept for 3 months from the day the winner is decided (unless the conditions allow for the re-drawing of winners for unclaimed prizes or the jackpotting of unclaimed prizes. If the prize is not claimed within 3 months, a redraw must occur);
  • prizes do not include weapons, cosmetic surgery, tobacco product, or alcohol where the competition is open to entrants under the age of 18;
  • records are maintained for up to 5 years including books, finances and prize details; and
  • the purpose for which the entrant’s personal information is to be used is made clear to the entrant (if used for a purpose other than the lottery).

Trade Promotion Lottery Permits in NEW SOUTH WALES and the AUSTRALIAN CAPITAL TERRITORY

New South Wales and the ACT both require businesses to apply for a Trade Promotion Lottery permit regardless of the value of the prize/s. Costs associated with permits differ dependent upon the value of the prize pool or individual prizes.

Trade Promotion Lottery Permits in SOUTH AUSTRALIA

Where the total value of the prize pool for a Trade Promotion Lottery in South Australia exceeds $5,000 the organiser is required to apply for a competition permit.

Trade Promotion Lottery Permits in NORTHERN TERRITORY

In the Northern Territory, a business will not be required to apply for a Trade Promotion Lottery permit where they have acquired a permit for the same competition in another state or territory. If the business does not intend to run the competition outside of the Northern Territory; they will only be required to acquire a permit where the total prize value exceeds $5,000.

Trade Promotions Lotteries in WESTERN AUSTRALIA

A business requires a permit to conduct a trade promotion lottery in Western Australia, however, a business will automatically be issued a permit if the Trade Promotion Lottery meets the prescribed terms and conditions.

A business will be required to submit an application where it intends to conduct a Trade Promotion Lottery that does not comply with the prescribed provisions.

How we can help

DSS Law’s commercial law team can assist companies, independents, advertising agencies and marketing firms who are running trade promotion competitions, whether it is chance or skill based, to draft complaint terms and conditions, provide guidance on competition procedure, and review online and print advertisements, artwork and entry forms. We can also help you determine whether you require a trade promotion permit and apply for one on your behalf.

Note the information provided is a guide only and is not intended to replace specific legal advice tailored to your circumstances.  Contact DSS Law if you would like to discuss how the various state and territory requirements apply to your promotion.

07/12/2016

Disclaimer

DSS Law insight articles are intended to provide commentary and general information. They should not be relied upon as formal legal advice. If you would like specific advice relating to this topic, please contact DSS Law on epost@dsslaw.com.au.