Ensure Your Giveaways and Contests Are Legal

By Wendy Piersall from Mom Blogging For Dummies

When running promotions on the Internet comply with your own local laws and with the laws of where every single one of your participants lives. Mom bloggers most commonly call a giveaway promotion a contest. Technically, this is inaccurate because

A Contest is a promotion in which entrants win a prize based on merit. The prizes are not awarded randomly and are subjectively awarded based on a judging panel or a voting process.
A Sweepstake is a promotion in which entrants win a prize by random drawing. It is important if you are running a sweepstake and not a contest, that you do not call it a contest.
A Giveaway is technically not a legal term at all, but can be used interchangeably with the term Sweepstake in blog posts or conversationally. But when you are using legal terms (such as in your rules and regulations), you should use contest or sweepstake.

Following are the big no-no’s, the things that are legal requirements pretty much no matter where you live:

You absolutely cannot charge a fee to enter your promotion. Charging a fee causes your promotion to become a lottery, which is a very different (and much more highly regulated) legal entity. You also can’t require your winners to pay for shipment of their prizes, though they are responsible for their own taxes.
If you are running a sweepstake, you absolutely must choose your winner randomly. Additionally, these people are ineligible to enter: your family, anyone who lives at your address, any of your employees or contractors, your sponsor, and your sponsor’s employees or contractors.
For U.S.-based bloggers, you cannot run a promotion involving any of the following industries: tobacco, alcohol, gasoline, dairy, insurance, and financial institutes. Special requirements apply to these industries, and usually the cost of running a promotion won’t justify the time you would spend on it.
You cannot extend an entry deadline. You must stick to your first stated entry deadline, even if you don’t get many entries or you feel the promotion wasn’t successful enough. By running your promotion and stating an entry deadline, you have entered into a binding contract with your initial entrants.

If you get no entries at all, then you should end the first promotion and start a second one, not continue the first one.
You must accept all valid entries. This is stricter than you may think, with the benefit of the doubt going to your participants. For example, your sweepstakes entrants are asked to go to a sponsor’s website and name a favorite product in order to be entered into your promotion. They leave a comment that simply says, “I don’t know, enter me anyway.” That is a valid entry.

Conversely, if you state that there is only one entry per person and you find that a person violated that rule, that is not a valid entry.
You must award a prize even if your prize sponsor flakes out on you. A promotion on your blog is a contract between you and your participants, not your sponsor. If the sponsor doesn’t award a prize to your winner, it is your responsibility to purchase and award the same prize (or equivalent product if the original prize is unavailable) and send it to the winner.

You may be thinking that these rules are fairly obvious and easy to adhere to, and you’d be right. But honestly, most bloggers who run sweepstakes do only the above things, because they are the most commonly known laws about promotions.

These are generally accepted laws in the United States, and your local laws may be different from these. So take these as a starting point, and please consult a local legal expert to ensure you are in 100-percent compliance with all laws applicable to you.