Nothing gains quite as much attention as the word ‘free’, but make sure your business complies with the law or it could end up costing you.
Who doesn’t love a good freebie?
Running competitions, trade promotions and events can be a great way to increase market awareness and encourage good will in your brand.
However, you may need to comply with certain laws, depending on the type of promotion you are running, and where and how you are running the promotion.
Games of skill
Whilst there are exceptions, the general rule is that, competitions that are considered a ‘game of skill’ where entrants are judged on their ‘best’ written answer or required use their own skill or ability to win do not require a permit in Australia. Some examples of these include:
- “Tell us in 25 words or less why…”
- “The most unusual photograph will win…”
- “Test your skill at our arcade/bowling game/claw machine…”
For example, popular makeup retailer Mecca Maxima recently had lines of people waiting to try their ‘skill’ at their in-store claw machines filled with free miniature makeup products.
Games of chance
Things get a little trickier when it comes to games of chance. These are competitions where winning is completely left to luck, such as:
- “Share/follow us/tag a friend to enter…”
- “Sign up to our newsletter for a chance to win…”
- “Buy our product for an entry…”
These are often considered ‘trade promotions’ and a permit may be required depending on the state the promotion is offered in and the value of your prize offerings.
Even if a permit is not required, almost every state requires that you comply with a number of general terms and conditions specified in state-based legislation. Failure to comply with these requirements can result in thousands of dollars in penalties.
Terms and Conditions
Whether you are running a game of skill or game of chance, we recommend that you have clear, well-drafted terms and conditions for each competition. A robust set of terms and conditions can cover off what happens if things don’t turn out quite as planned and can assist in managing the risks associated with running competitions.
Some particularly important clauses are the eligibility and disqualification clauses. You should always have a way to filter out participants who break the rules – having clear terms will support your case if a complaint is made against you.
Social media platforms and advertising
It is always essential to consider the medium in which you are advertising your competitions. Different platforms, such as Facebook and Instagram, have their own competition rules and guidelines with which you must comply.
I’ve helped many of my clients draft their competition term and conditions in compliance with multiple state laws in Australia and on various platforms. I can also take the hassle out of your competition planning and apply for state permits on your behalf. If you need advice regarding any element of your competitions, giveaways or trade promotions, please don’t hesitate to contact me at or call me at 1300 033 934 for a no-obligation quote.