Gift With Purchase
A trade promotion that awards a 'gift' to a customer for completing a requirement, such as purchasing a product is known as an offer.
Everything you need to know about gift with purchase
Consumers are most drawn to promotions that offer tangible value. Offering a gift with the purchase of your product or service is a great way to encourage the purchase of your product. E.g. purchase a bottle of XX liquor and receive a hat.
When offering a gift, consider:
1. Gift must be desirable to your base audience: the type of product that your customer base may desire. For example, for an alcohol based product, you may want to offer a free glass.
2. Cost of production: obtain ‘gifts’ which are low value to produce in bulk. E.g. beanie, hat, etc
Do you need permits to run the Gift With Purchase Offer?
The way a consumer claims their gift and whether or not there are a limited number of gifts available will affect whether or not trade promotion permits or an authority is required.
A) Guaranteed Gift = No Permit/Authority
If every customer who completes the claim requirement during your proposed offer period (e.g. 1st Oct to 31st December) are entitled to the gift, then NO permits or authority is required.
However, be careful of the chance of over redemption. If you only purchase a set number of gifts and receive more gift claims then anticipated during the offer period, you will need to purchase further gifts to be able to fulfil those claims.
TIP: It may be a safer option to include a cap on the number of gifts awarded and obtain permits (if required), as the costs for obtaining permit/s may end up being a lot less than the cost to purchase further gifts.
B) Limited Number of Gifts Available = May Required Permit/s/NSW Authority
(i) Gift provided at point of purchase (advertising removed once stock runs out) = No Permit or NSW Authority
If you simply award a gift at the point of purchase, and advertising in store is removed as soon as all gift stocks run out, then no permits or authority is required.
(ii) Other gift claim mechanic
For any other gift claim options, you may need permits to run the offer. The States that may require permits and when they require a permit are outlined below. Please note these only apply if the offer is available in these States.
- NSW (2 or more steps and gift pool over $10K= Authority Required): If a person does not know at the time of purchase whether or not they will receive a gift, and the gift pool is over $10K, then the promotion will need to be approved under an authority in NSW. A classic example is where a consumer purchases in store and then goes online to claim a gift. If there are only 50 gifts available, they won’t know when they complete the purchase whether or not they will receive the gift when they go online to claim; or if at that point all gifts have already been exhausted.
- ACT (online claim = NO permit; mail claim = permit required): If there is chance in ordering claims then a permit is required in ACT. If a person submits a claim online, you can time stamp claims and it will be possible to determine which are the first X claims to be received and no ACT permit would be required. If claim is via mail, you could receive 100s pieces of mail delivered at the one time and it will be impossible to pinpoint which was the first received.
- SA (if gift pool over $5,000 = Permit Required): If the total ‘gift’ pool is over $5,000, then a permit is required in SA.
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