Running a trade promotion is a great way to expand your brand’s audience while building on existing brand loyalty. However, each state and territory, like Victoria, has their own unique set of legal restrictions that must be followed - otherwise serious consequences may be faced.
Key Considerations for Running a Trade Promotion in Victoria
In this article we will break down the key considerations and requirements necessary to run a trade promotion in Victoria.
Design a trade promotion that works for your objectives
Consider how you will measure the success of your promotion, this will determine what type of promotion will work best for you.
Games of Skill are promotional activities whereby the winner(s) are determined by some sort of skill based mechanic (e.g. entrants submit an answer to a promotional question which can then be judged in order to determine a winner). This requires entrants to be heavily involved with your brand and your promotion and works best for engaging with existing, loyal customers.
Games of Chance are promotional activities whereby the winner(s) are determined by some sort of chance based mechanic, such as a random prize draw or an instant win type competition (e.g. scratch cards, online instant win promotions). This type of promotion has a lower barrier to enter and works well for both attracting new customers and engaging with existing customers.
Identify if terms and conditions are required
While it is only mandatory for games of chance based promotions to have terms and conditions, we strongly recommend that all trade promotions have a set of Terms and Conditions to govern the conduct of the promotion. Terms and conditions can be created quickly and easily with the use of a terms and conditions generator such as Promotion Wizard.
The advantage of including terms and conditions for your game of skill promotion include your ability to clearly outline:
- where you want the right to use any photos/comments submitted by an entrant in marketing,
- If you will be collecting personal data from entrant and to also protect the promoter from a liability perspective and,
- Any strict conditions/limits that apply to the promotion.
Do I Need A Permit To Run A Competition In Victoria?
A permit is NOT required to run a game of chance OR game of skill promotion in Victoria.
NB: A permit used to be required to run a game of chance promotion in VIC but the trade promotion permit system was abolished in Victoria on 21 June 2015
Legal Requirements for Running a Trade Promotion in Victoria
Luckily, you do not need to fulfil any legal requirements when running a Game of Skill trade promotions in Victoria.
However, there are several requirements that come with running a Game of Chance promotion in Victoria. These include:
An entry fee can’t be charged for a trade promotion lottery. This doesn’t prevent a person from being required to purchase a genuine product or service to be eligible to enter. However, if entry via mail for example, it cannot exceed the standard cost of a stamp.
Using a 1900 number or SMS
A 1900 number or SMS can be used in a trade promotion lottery, but the telephone call or SMS cannot cost more than $1 per entry (including GST). This also includes postage costs. This restriction must be considered for any trade promotion lottery that might require a participant to call more than once.
Written consent must be obtained from the person whose trade or business is to be promoted by the lottery.
The names of winners of all prizes over $1,000 must be published by one of the following methods:
- in a newspaper circulating generally in Victoria;
- on the internet, for a minimum period of 28 days; or
- if the lottery was advertised solely through a trade journal, promotional magazine or similar publication, in that publication.
Cost to Accept Prize
The winner of a prize must not incur a cost to accept a prize (other than a trivial cost). E.g. you cannot require an entrant to pay for travel insurance as a condition of accepting a prize.
Entrant Presence at Draw
You cannot require an entrant to be present at the drawing of the lottery to be eligible to win a prize (unless the entry and draw are to occur on the same day and in the same place).
The prize must be paid or transferred to the winner within 28 days after the draw.
A redraw is not mandatory in Victoria. The Promoter must take “reasonable efforts” to award the prize. Otherwise, prize may be disposed of in accordance with any provisions in the Terms & Conditions (e.g. to another randomly drawn entry).
A prize may only be substituted if the substituted prize is of the same or greater value than the original prize and the winner either agrees in writing, or the original prize is unavailable due to circumstances beyond the control of the person conducting the trade promotion lottery and reasonable attempts are made to reach agreement with the winner that are unsuccessful.
The promotion must not be offensive or against public interest, and therefore prizes that could be seen as such may be prohibited. Examples of prohibited prizes include: tobacco, weapons, surgery, etc.
Record Keeping Requirements:
Certain records must be kept for a period of three years after finalisation of the lottery that provide an:
- accurate financial accounting of the lottery
- accurate accounting for all entries
- accurate report of the distribution of prizes
Making promotion terms and conditions easier to manage
Keeping track of your promotion, and all the different requirements that go into terms and conditions in each state can be tricky. Using a technology platform such as Plexus Promotion Wizard can take the stress out of running a promotion.
With Plexus Promotion Wizard you can generate perfect T&Cs for your competition or trade promotion in as little as 15 minutes. The automated terms and conditions generator allows you to easily input your promotion details and have legally compliant terms and conditions in 24hours.