No Purchase Necessary & Giveaways: Everything You Need to Know

No Purchase Necessary Law & Meaning

We get this all the time. Someone emails us a message asking:

“Hi Rafflecopter! I’m writing on behalf of The Incredible Widget Company. I’d like to run a giveaway through your app, but we want to require entrants to make a purchase on our site. Can we ask people to provide a receipt of purchase for a product a specific giveaway is promoting as an option for them to gain entry?”

If you’re familiar with sweepstakes and gambling regulations in the US, you know the answer is “no way!”. You’ve probably read the verbiage ‘NO PURCHASE NECESSARY’ before, which means entrants cannot be required to make a purchase or plunk down money in some form or fashion to enter to win a contest or sweepstakes.

Below, we’ll discuss the definition and meaning behind this language, help describe what’s allowed, and when you might be crossing the line. Before continuing, be aware that while many countries have laws surrounding gambling, lotteries, and sweepstakes, we’ll be focusing on the US for the sake of this article.

Additionally, we’ve seen many giveaways run through our platform and while we feel confident in talking about the subject and promise to offer the best knowledge we possibly can, we’re not lawyers. Just a disclaimer ;)

Sweepstakes, Contests, Lotteries, & Raffles

Raffle ticket admit one

First, let’s discuss the differences between a sweepstakes promotion, contest, and a lottery. To understand the differences, it’s important to become familiar with the word “consideration”.

When you hear the word consideration, it’s referring to the entrant’s time, effort, or money. It can come in several forms, such as sending a text message, a 900 number phone charge, subscription fees, making a purchase, or engaging in activities that require a considerable amount of time (like filling out an in-depth survey for example or making multiple in-store visits).

Sweepstakes. Typically when we refer to a giveaway on our blog, we’re referring to what is technically known as a sweepstakes promotion. Rafflecopter specifically helps administer sweepstakes promotions, which is defined as ‘a promotional drawing in which prizes are given away at no charge to the participants’. Winners will be selected at random — it’s the luck of the draw if you’re chosen.

To keep a sweepstakes from becoming an illegal lottery, there must be no consideration.

Contests. A contest is similar to a sweepstakes, except to win there’s an element of skill involved. A contest is defined as ‘an event in which people try to win by doing something better than others’. Winners will be chosen or judged based on their submission or performance. Like a photo or essay contest where the best photo taken or essay written wins.

A contest awards prizes, but replaces the element of luck / chance like you’d see in a sweepstakes with selection of the winner on the basis of skill or intellect.

Lotteries. A lottery is defined as ‘a means of raising money by selling tickets and giving prizes to the holders of numbers drawn at random’. Lotteries in this country are exclusively government run, and prohibited outright in a large handful of states. A lottery is a game of luck that requires an entry fee.

A lottery has three key determinative elements: prize, chance, and consideration. Additionally, you might have a lottery that has no winners, and thus the prize is turned over (perhaps you’ve seen Powerball display “There were no jackpot winners for Saturday’s drawing… The next drawing will be Wednesday, April 29th, 2015”).

Raffles. A raffle is very similar to a lottery, where a number of persons buy chances to win a prize (think of a church raffle or charities raising money for a cause). Unlike lotteries however, a raffle will always have a winner chosen.

Every state’s laws pertaining to raffles are a little different, but the one rule that’s consistent for all raffles is that they’re specifically meant for non-profit organizations. The organizations that host these events often find that they are a great way to raise funds and to promote awareness for their causes. If your company or organization doesn’t have non-profit status, you’ll be hard pressed to get a raffle approved by your state.

*Psst* Here’s an example of a raffle being run by the Boys & Girls Clubs of Metro Denver, Inc., a Colorado nonprofit corporation. If you read their FAQs you’ll see they’ve registered with the State of Colorado.

As an entrant, you cannot participate in a raffle or a lottery without purchasing some kind of ticket, a form of consideration. Sweepstakes and contests are the exact opposite however, and asking entrants to purchase a product or spend money to increase your chances of winning is illegal. This is why if you read the terms and conditions of the giveaway you’re entering, you’ll see the phrase ‘NO PURCHASE NECESSARY’ so often (it’s the very first disclaimer you’ll read in our terms and conditions boilerplate).

No Purchase Necessary Meaning & The Law

No Purchase Necessary

If your company is running a contest or sweepstakes, you can’t ask entrants to purchase something as a means of entry. And if your company isn’t a non-profit, you cannot run a raffle. And unless if you’re the government, it’s illegal to run a lottery.

There are a few government entities that help make sure these promotions don’t break the law: the FTC, the FCC, the USPS, and your state’s regulations.

The FTC’s Involvement

The Federal Trade Commission is an independent agency of the government who helps protect the consumer. In the FTC’s small business advertising FAQs, they specify that “sweepstakes-type promotions that require a purchase by participants are illegal in the United States.” The FTC doesn’t directly oversee sweepstakes, but might step in if they see a sweepstakes scam taking place.

*Psst* Become more familiar with the FTC’s involvement with giveaways pertaining to the CAN-SPAM Act.

The FCC’s Involvement

The Federal Communications Commission is an agency similar to the FTC, except the FCC helps regulate communications over radio, TV, internet, cable, etc. If you’re planning to promote a sweepstakes or contest over any of these communication channels, it’s important to disclose the material terms and conditions of the promotion (eligibility requirements, prizes that can be won, and start and end times for example) and not advertise the sweepstakes in a deceptive way. Like the FTC, the FCC doesn’t directly oversee sweepstakes, but will step in if they see a promotion violating these rules.

To fall in compliance with the FCC, it’s best to communicate the ‘NO PURCHASE NECESSARY’ clause when advertising your giveaway, no matter if that’s on your website or a radio ad.

The USPS’ Involvement

Even the United States Postal Service is getting involved. In 1999, the Deceptive Mail Prevention and Enforcement Act (DMPEA) was passed, giving the USPS authority to stop mail and impose penalties to those sending out sweepstakes mailings that are deceptive.

Sweepstakes mailings have to disclose that a purchase isn’t necessary to enter and won’t improve the chances of winning. These disclosures must appear in the mailing, in the rules and on the entry form. They must be very easy to find, read and understand.

Your State’s Involvement

And as noted above, laws surrounding gaming, gambling, sweepstakes, contests and raffles all vary state by state. To find out what the laws are in your state, google “sweepstakes laws + your state”. After a bit of searching, here’s an example doc that goes into detail for our home state of Colorado.

What if I’ve Broken the Law?

Woman in handcuffs blue

“I’ve been running giveaways asking entrants to purchase an item for my shop for the last six months and I’m just finding out this is illegal — what should I do?”

First, we’d recommend you stop. Second, unless you’re a big company whose promotions reach a huge audience, so long as you’re mindful of the rules moving forward, you should be fine.

The companies that we’ve seen get in trouble over these laws are large corporations that should have a) had their legal team look over their promotion’s terms before launching them, and b) listened to their consumers before they started filing complaints. It takes a really shady operation and a lot of complaints to stir the pot to get the FTC or FCC involved (though it does happen)

Consumers are also getting smarter surrounding these laws as well. More consumers know that if someone asks you to pay to enter, there’s a good chance it’s a scam. Therefore, if you ask entrants to pay to enter, even if it’s indirectly, you start to appear like a scam. Might be best to avoid that!

No Purchase Necessary: Q&A

Again, while we’re not lawyers, below are a handful of frequently asked questions we’ve received over the past several years regarding rules that surround the ‘no purchase necessary’ wording.

Question: Can the winners of a sweepstakes be asked to pay for shipping?

Answer: Nope. When you run a sweepstakes or giveaway, it’s your responsibility as the giveaway sponsor to ship out the prize. If you ask entrants to pay for shipping, not only is it against the law, it would be very off-putting to the winner.

Question: Can entrants be asked to provide a picture or proof of a receipt?

Answer: This question is asked surprisingly often, but again the answer is no. If you’re asking for a proof of purchase statement like a receipt, that’s directly in violation of ‘no purchase necessary’ since you’re asking someone to see a proof of purchase.

Question: How does McDonalds get away with game pieces on soft drink cups? You need to purchase a drink to get those.

Answer: You might be referring to the ever-so-famous McDonald’s Monopoly sweepstakes promotion, where you collect game pieces on food items during certain times of the year. If you read their terms and conditions carefully, McDonalds offers an alternative method of entry, and can be requested by mailing a handwritten, self-addressed stamped envelope to an address to collect game pieces.

Question: Can I hold a raffle for my business where entrants purchase a ticket for $5?

Answer: If you operate as a non-profit, you might be able to. I say might because each state has different laws concerning raffles. You’re best to contact your state’s Department of Revenue to find out the barriers to entry. If you’re a for-profit company, chances are you’re out of luck!

Question: What if the entry option to purchase something is an optional entry option?

Answer: Sorry! If entrants are still paying you or plunking down money to increase their odds of winning, it’s a no-go. It doesn’t matter if the entry’s optional, it’s still consideration and is in violation of everything we discussed above.

Question: Can I ask entrants to post a review on Amazon for my company’s product or book as an entry into my giveaway?

Answer: Tough call, though we’re going to be better safe than sorry and say no. If you have a promotion set up to where entrants participate by leaving a review for a product, that implies that in order to leave a review they must purchase the product. Additionally, Amazon has guidelines in place for customer reviews. For more info, check out ‘Customer Reviews Guidelines Frequently Asked Questions from Authors’ and Amazon’s ‘General Review Creation Guidelines’.

We want to reiterate that we’re not lawyers. But after seeing hundreds of thousands of giveaways run through our platform, we feel we’re in a place to share advice with you on this subject that’s not often discussed to help keep your promotions legal.

If you have any additional questions that weren’t addressed in the Q&A above, leave a comment below and we’ll do our best to help figure out your best plan of attack!

About the author

Greg Goodson

Greg Goodson is the cofounder of Rafflecopter. 25x ultramarathoner, bluegrass guitarist, & weather enthusiast. Owner of one doge.

  • slehan

    Great post. Just bookmarked this to keep it handy when I see a giveaway trying to make people buy something. No Purchase Necessary!!!

    • Can entrants be asked to provide a picture or proof of a receipt?

    • Additionally, we’ve seen many giveaways run through our platform and while we feel confident in talking about the subject and promise to offer the best knowledge we possibly can, we’re not lawyers. Just a disclaimer ;)

    • 900 number phone charge, subscription fees, making a purchase, or engaging in activities that require a considerable amount of time (like filling out an in-depth survey for example or making multiple in-store visits).

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  • Steve

    Hello, I work for a company that sells home decor. We are looking to add a CTA on our order confirmation emails encouraging customers to send in pictures of their installed decor to be featured on our website. If their pictures are good enough quality and are selected to be used, the customer will receive a American Express gift card.

    I’m not sure what this falls under though. A contest? And if so, do we just add some sort of disclaimer or legal terminology along with it?

    • Hey Steve – it doesn’t sound like a contest if that offer is going to remain open indefinitely. I might write the copy to say something like “Send us your pictures of your home decor! If we like it so much and wind up featuring it on our website, we’ll give you $100 your next purchase or a $50 AMEX gift card”.

      If I were in your shoes, I’d probably still add some disclaimer describing the promotion just so there’s no confusion!

  • Lisa Courter

    I have an at home business and do parties in the home and online. Is it okay for me to offer an extra 5 entries in the party prize drawing for placing an order?

    • Hey Lisa! Even if it’s an extra 5 points in addition to other ways of entry, unfortunately it sounds like that wouldn’t be alright since those entering would have to make a purchase to increase their chances as winning.

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  • sarabara081 @ Forever 17 Books

    What about a giveaway option to gain entries if you download a free book?

    • That should be fine – we recently ran a giveaway where we awarded entries to those that downloaded an ebook actually.

  • Julieann Selden

    Is this situation legal? A company offers two methods of entry: one by purchase and one mail-in. However, each method of entry has a separate cap on how many prizes can be given away. In this case, everyone (or at least very close to everyone, based on the odds, I think it’s everyone) is supposed to win something. They are saying that they are reaching their cap for mail-in entry prizes but that you can still win through the purchase method. This seems to contradict the idea that making a purchase will not increase your odds. What do you think?

    • Hey Julieann! It’s tough to fully determine if it’s legal or not (so much gray area) and is certainly something I would never recommend doing. We have seen a few promotions pop up in the last 6 months that have a entry option that seems like it’s asking you to purchase an item and then very subtly says that there’s an alternative way to enter for free.

      My best judgement tells me the situation isn’t legal, but again I’m not a lawyer nor have I had a chance to view the promotion myself. That’s my take!

  • Kayla

    We are a United States non-profit organization that is planning four global conferences in 2016. As a promo, we would like to run a sweepstakes to give away one ticket to each conference per location. Locations and dates are as follows:

    * Charlotte, North Carolina, USA – April 2016

    * Sydney, Australia – June 2016

    * Alberta, Canada – September 2016

    * Amsterdam, Netherlands – October 2016

    Our main concern is the legal requirements behind having a sweepstakes take place with people participating from other countries, and the prize being a ticket to a conference in another country. For example, do we need an Australia sweepstakes permit to give away a ticket to BRMConnect Sydney to an Australian native? Or is this null because the sweepstakes is taking place in the United States and by a US entity?

    • Hey Kayla! To be honest, I’m not sure what the correct answer would be, but my gut would think that if you’re giving away tickets to an event not in the US, but only US residents are eligible, that you’d only have to follow sweepstakes laws in the US. Besides, there might be some liability issues where if someone goes on the trip after winning the tickets and then getting hurt or something.

      I know this isn’t really on the topic of ‘No Purchase Necessary’, but I hope that helps. I’d still take my advice with a grain of salt… I’m not a lawyer!

  • rumster

    Can a gym have a contest for who lost most weight but you have to sign up for a personal trainer and purchase protein shakes in order to enter. Also if you’re a male you are required to take your shirt off to enter. Is this legal?

    • It sounds like that would be in violation, especially the part where the entrant would be asked to purchase a protein shake. If signing up for a personal trainer meant paying for one, that would be in violation of the rules as well.

      I can’t help you on the shirt question – sorry ;)

      • Troy Hoffman

        I’m not a lawyer, so I may be wrong. That being said, I’m not so sure about this contest being in violation.

        In a sweepstakes, the winner is determined by the element of chance. The participants have no control over the variables determining the winner. In this case, however, the winner is determined by how much weight each participant loses. The participant’s skill at losing weight determines his or her ability to win the contest, not random chance.

        This particular contest would likely be considered a skill contest, not a sweepstakes. In that case, a different set of laws would apply, including the ability to charge an entry fee or require a purchase. Whether it’s legal or not would depend on the wording of the official rules and the state where it is held, so consulting a lawyer would be advisable.

  • TJ

    I run a pawn shop. I just want to create foot traffic into the store by promoting a sweepstakes on Facebook. What if I just give away the tickets for a prize? The only requirement is they have to pick up the tickets at the business? No purchase necessary, just mention the Facebook post. Thanks.

    • Hey TJ – what kind of tickets are you giving away? Everything you say sounds like it should work, but I’m curious about your prize.

      • TJ

        I wanted to do a pair of beats by dre headphones, but my bosses want to do gift certificates.

  • Mike Tyrone

    If I sell photo prints / posters and host a giveaway to the people who purchased and bought my art prints would it be considered legal?

    • Hey Mike! It’s my understanding that this would not be legal unfortunately. You’d have to allow anyone to participate, whether or not if they’ve purchased a product from you.

      • Lee Wis

        How about if I host a daily sweepstake where entry requires to play my 100% free online video game? They must have had created a free player profile name and play the game at least one time. Regardless of the score they’re automatically in for the day. One profile name will be chosen as the winner. 100% No Purchase Necessary. Just maybe at least 3-5 minutes of their time.

        • Hey Lee – you start getting close to whether or not that might be considered ‘consideration’ because of the time investment from the entrant participating. 3 minutes isn’t a long time, but it might be to some peple, so it’s a gray area. I’m not certain either way!

  • JB

    Hi Greg, I was just granted my LLC business name and I want to put on an several events that consist of entrance fees – like a run walk for starters donating a percentage of the proceeds to a non-profit of choice. I would like to tie-in a car giveaway as well – Would I be able to ask entrants to to buy separate tickets to enter for their chances to win tied-in with a contest or can the entrance fee to participate allow the participant to be in the drawing to win for the car?

    • Hey JB – if your business isn’t a non-profit, I’m fairly certain that you’d be in violation of the rules above. If a purchase is made to help increase their chances of winning, or allow them to enter, you’d be running a raffle / lottery essentially.

  • Zc

    I was wondering if I giveaway a ticket with every purchase of a phone case or you may mail for a free one (like McDonald’s does) would this be legal?

    • Yeah – I believe that would be legal. I know McDonalds will also give you a game piece at the counter if you ask for one, but I have seen other promotions have their alternative form of entry is mailing in something.

      On that note, it isn’t super safe to assume that this is alright just because I’ve seen someone else do it. If you have to mail in for a game piece as an alternative method of entry, you still have to purchase a stamp. Tough to figure where to draw the line.

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  • Leslie Sheh Tang

    Does it matter when in the contest or sweepstakes you enter? Say a contest runs for a month, and it’s a entry per person the entire period. Will I get less of a chance when i sign up the last day vs the first day it started? Does it have any effect?

    • It shouldn’t make a difference. If 5,000 people enter in one sweepstakes, regardless if you’re the 10th person to enter or the 4,999th person, your odds of being randomly chosen as the winner is still the same.

  • prairieboy

    I believe your definition of “consideration” includes the entrant’s time. Given that, the time required by many contest operators using Rafflecopter, in which one must follow or comment on a chain of sites, would appear to fall into that definition. To complete one of these promotions, one often must spend a significant amount of time until eventually returning to the original page, otherwise an entry is not allowed.
    Am I misreading your blog or are these contests breaking the rules?

    • I guess the gray area is where to draw the line between something that’s not time consuming vs something that takes a significant amount of time.

      In our example monthly giveaway we just launched yesterday (https://www.rafflecopter.com/monthly-giveaway) we give entrants the ability to participate in 3 ways: signing up for our email list, answering a short question, and tweeting a message. For the most part, I’d consider those easy and not time consuming.

      I’m not aware of any cases where someone has challenged a promotion in court for taking too much time. That aside, we’ve heard entrants speak up from time to time that they won’t enter a promotion that seems time consuming to them, so the admins running them are already kind of shooting themselves in the foot already.

  • Bella

    Hi Greg,
    I found a nationwide sweepstakes being run by a huge poultry co. I want ot enter however I found a discrepancy in their official rules. They do state the No Purchase Necessary however, the method of entry involves taking a picture in my kitchen with their product in hand. How am I supposed to do this with out purchasing their product? They offer no alternate method of entry. Who should i contact about this? It is unfair to say the least.
    Thanks in advance!
    Bella

    • Hey Bella! If you’d like to post the sweepstakes here or perhaps email me at greg@rafflecopter.com, I’d be happy to take a peek and shed some light on the situation. I’d be curious to have a look.

  • West Addison

    Currently Verizon is conducting a sweepstakes that is limited to account holders of Verizon wireless plans. The official rules are here: http://www.4u2entr.com/sf/. Since a Verizon wireless plan costs a nontrivial amount of money, I wonder whether this is legal. What is your view?

    • Hey West — I still haven’t had a chance to read through all the rules, but I did skim through them. I tried to enter from one of their landing pages, but it’s not accepting my entry b/c it looks like the promotion period ended yesterday with the Super Bowl. It looks like I wouldn’t have qualified as per their rules though — you would have had to enter w/in 50 miles of where the event was being held (near Levi Stadium in San Jose — home of the SF 49ers and where the Super Bowl was).

      All that aside, I do see that it reads ‘BE THE AUTHORIZED ACCOUNT HOLDER OF AN ACTIVE VERIZON WIRELESS PLAN WITH A PLAN DURATION THROUGH THE AWARDING OF PRIZES IN ORDER TO PARTICIPATE AND WIN’. To be honest, I’m not sure if this is legal or not, but my gut tells me it is and the main reason being that it’s a promotion run by a large company (Verizon) and being administered with the help of two other companies (a large ad agency and a mobile software company). I don’t think that’s a great reason though, since we’ve seen some big companies break rules before, but I keep thinking that there couldn’t be any way this promotion was set up for Verizon w/o their legal team(s) getting involved. I wish I had a better answer — I just don’t know in this case.

      • West Addison

        Hi, Greg, Thanks for your reply. If you were looking through the rules for an alternate way of entering that did not require having a Verizon wireless account, I read through them pretty carefully and found no such free method. Indeed, as you noticed, rule #2 flat out states that “YOU MUST, PRIOR TO JANUARY 18, 2016, BE THE AUTHORIZED ACCOUNT HOLDER OF AN ACTIVE VERIZON WIRELESS PLAN WITH A PLAN DURATION THROUGH THE AWARDING OF PRIZES IN ORDER TO PARTICIPATE AND WIN.” To me, that directly contradicts rule #1, which I believe is required by law and states “NO PURCHASE NECESSARY TO ENTER OR WIN.”

        Perhaps the Verizon lawyers’ argument would be that, since the wireless plan had to be purchased before the start of the sweepstakes, those who qualified did not have to make any additional purchase in order to enter. (Exactly when the Verizon account had to be in effect is unclear: http://www.4u2entr.com/sf/ states “prior to January 18, 2016” and https://contests.4u2entr.com/sf/ states “prior to 1/30/16”!) However, I find several problems with that argument: (1) it did cost money at some point, (2) it would cost some people money during the sweepstakes period because their monthly Verizon wireless plan payment would be due then, and (3) it would appear to violate the principle stated in your article that proof of a purchase cannot be required.

        I can tell you that I did attempt to enter during the promotion period (on February 3) and only a few hundred yards from the center of the 50-mile radius specified in rule #2 (which was actually the Verizon tent in Super Bowl City in San Francisco, rather than Levi’s Stadium in Santa Clara near San Jose). I received the response “This campaign is not currently available through your service provider.” (My service provider is not Verizon.) I was also informed by a staff member in the Verizon tent that it was not possible to enter without being a Verizon subscriber.

        So has Verizon found a major loophole in the law? Or are they just flouting the law?

        • Hey West — thanks for the details. That’s really interesting to read. But to answer your question if they’ve found a loophole or are in fact within the boundaries of the law: I’m not sure.

          I agree with your points you made above and certainly would never advise someone to run a sweepstakes like this unless you had a legal team on your side to draft this up. Like I stated above, my gut tells me since it’s a promotion run by a large company, but big companies are allowed to break the law, too ;) Thanks for sharing all of this — if you find out anything else or see any other promotions running in a similar manner, let us know!

        • +1

      • Laura Laurie Harrison

        I’ve always wondered on Verizon contests too. I’m a customer and I do NOT enter them. However, it seems to me it is the same as saying you must make a purchase. Other companies like T-mobile do this too. Just b/c they are big, they should not be able to avoid the laws set up for sweepstakes.
        My question would be who do we pose a question like this to? The FCC? The Attorney general?

  • Cari Durecki

    Re; West Addison – I was reading the Verizon Grand Canyon vacation sweepstakes official rules today. Everything sounds OK until you get to “drawing” “Immediately following the Drawing, the Potential Winner will be contacted at the email address associated with their Smart Rewards account by a representative of the Administrator ” I emailed and got a generic reply. I called 1-866-962-3713 to speak to a verizon Smart rewards rep and she kept telling me you had to have a smart rewards account to enter, I read the rules, I think she totally ignored me. I finally said I believe that is a Federal law, she put me on hold, then just said she should have her email address on the card and that would work. But I am still bothered by the working of this document. I don’t want to spend money on stamps to enter if no chance of winning. Advice? Thanks!

    • Cari Durecki

      I see the Verizon sweepstakes mentioned by West Addison was a different sweepstakes. The question was for Greg, not West Addison, sorry for any confusion!

    • Thanks Cari — I’m just realizing you were talking about another promotion than West was!

      That aside, I’m thinking that the smart rewards rep that you talked to would more than likely not be equipped to adequately answer your question. I think she might have ignored you because she and her supervisor were too detached from the promotion to be of much help.

      Any chance you have a link to where the promotion is taking place or a copy of the document? I’d be happy to dig into it further!

      • Cari Durecki

        You have to be logged in to get to the sweepstakes info. I copied the text of the pop up window for the official rules and pasted them into a word doc, then converted that to jpg to get it to upload.

        • Cari Durecki

          So technically you would never see this sweepstakes offer of no purchase necessary unless you are logged in as a Verizon customer. I have my mom on my plan, so I thought she should be able to send in entries too, since she also has a Verizon phone. I tried to make a seperate account for her phone number but it said that number already had an account (under my name). I was just wondering if she is wasting time and money on stamps with no chance to win. I hate for her to spend the money on stamps if she would be disqualified and has no chance. The paper work says you get 250 entries for each mail in entry, and are allowed up to 4 a day (1000 entries). So that seemed like much better odds than the lottery. : ) Thanks a bunch! This site has been interesting to read!

          • Awesome – thanks for posting those rules. The mail-in ‘free entry’ looks legitimate to me, and while it seems like the made it difficult to locate, I would say that mail-in entries, I don’t believe your mother would be wasting her time. I think her mail-in entries would be legitimately counted in the entry pool.

            Glad you’ve been enjoying some of the articles we’ve written! Hopefully our responses have helped. If you have any other questions, please stop back and let us know.

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  • Ken Conary

    Greg, I’m going to throw up some questions, concerns and arguments not for the sake of either of us or any of us to be right or wrong but because I want to use your platform in certain ways and I can see others do also. I see how it could greatly benefit you if it were figured out. I’m not a lawyer either and I haven’t run a single promotion like any discussed here at all.

    I want to talk about sweepstakes, lotteries and raffles with an emphasis on sweepstakes.

    First, lotteries and raffles both require purchase for entry as opposed to no purchase necessary. Even if one gives away raffle tickets or lottery tickets, they are essentially payed for by at least the entity running the raffle or lottery.

    Second, a contest directly has a time consideration of taking a photo or making a video or piece of art, etc. I’d say that unless they offer entry to the prize contest without having to do this time consideration then they might be doing it wrong. Except I think the biggest concern is that there is no dollar sign purchase necessary. There is still a risk/luck factor against the time consideration in the subjective judging biases and who puts in more time consideration to get more (think “entry”) votes.

    Third, lotteries are illegal except for government and raffles are for non-profits only. Both of which, purchases are required. I think it is inherent in the term “No Purchase Necessary” that a purchase is aloud and optional and it would follow that it would also be beneficial rather than just a nice gesture supporting the sponsor.

    My argument is that we can run sweepstakes with no purchase necessary free entry for all to win a prize, but we can award additional entries with a completed purchase of a good/service. I’m really quite certain this is aloud. I think that straight purchase of additional entries with no exchange of goods/service may not be legal. In states where sweepstakes and contests are aloud, they have things like Bingo halls. Right next door to one Bingo hall in Kentucky there is a business that has an online game lounge that is like a mini casino. Anyone can enter free with a start up “entry” amount of virtual currency or what not used in the games and to cash out but they can purchase more with real money. Furthermore we have the mcdonalds deal. You can mail in for pieces and maybe ask for some (probably one per visit) from behind the counter. That covers no purchase necessary rule and the only way you can get those entries on the cups and bags is to make a purchase. A consideration.

    I think advertising free entry for all rather than hiding the fact that it is there will increase page likes, views or website views and interactions. Allowing goods/services purchases on top of free entry of course increases sales and directly monetizes the sweepstakes marketing.

    Besides increasing your subscription count, you could perhaps get affiliate fees off of such sales that would increase people’s entries.

    About that poultry sweepstakes with taking picture with product and the pay for stamp questions. They assume that the same as the kitchen, you’ll have already bought the kitchen, stamp or food product or that you will use someone else’s. Hence no purchase necessary.

    So Greg, I’m not understanding why you wouldn’t go talk to an appropriate lawyer about this if you haven’t already in order to grow and expand your business.

    Consider this consultation free.

    • Ken Conary

      Further, this may be all good and well with state and federal laws but may not be in accordance with facebook policies. In which a work around may be to link to the sweepstakes hosted on your website outside of facebook with some API coding for affiliate commissions and whatever it might take if possible for tracking who likes and comments the facebook post as well as the widget on your website. Maybe it would need to just be made clear that entry happens on the site link outside of facebook.

      • Ken Conary

        Upon further reading, I am convinced that as long as a state allows more than one entry per person per day then as long as there are no purchase options for all of the purchase options, and such no purchase options are not limited any more than the purchase options then you CAN have purchase options.

        Facebook Example: How to enter to win.

        First option: like and comment on post

        Second option: like and comment on X amount of multiple posts

        Third option: make a purchase

        Fourth option: find URL in terms and conditions, or think Inception and go multiple URLs deep that leads to a random code generator or QR code generator that will email or text a code for an entry.

        Fifth option (for extended sweepstakes, don’t include fourth option if using): Mail self addressed and stamped handwritten envelope to either rafflecopter or promoter (depending on laws and allowances) for randomly generated QR code printed that will give entry code. One QR code per envelope.

        Fourth option is to easy. Need help to think of idea to make it like fifth option where you need multiple hand written envelopes.

        Or to counter that and potential abuse altogether simply limit the number of possible no purchase entries to the highest current number of entries tied to purchases.

        • imjustsure

          To have a sweepstakes there can be no discrimination. I should not have to open a facebook account, own or borrow a computer or phone, pay or find internet service. You do have to get your entry into the company which can be name and address or an email address. The universal way to do that if you don’t have a car or they don’t have a location for the public to go to is through the mail and that is going to cost you a stamp and envelope.

          Many sweepstakes say one entry per envelope but multiple entries are allowed. You cannot control the amount of entries by an individual unless you were to put them into a database instead of a big rotating drum. It would get too expensive to run the sweepstakes if you had to verify a one entry rule before you pull out an envelope. There is also the thought of the players to have your entries spaced out through all the entries in the drum.

          When they give you other options for entry like making a purchase it is no different than sending an email or a letter. They take your name from the purchase and put it into the sweepstakes list. You aren’t really purchasing an entry, you are entering the contest and also purchasing a product. You don’t have to send them two letters and two stamps. You should also be entered if you just want to update the credit card or change the shipping address.

          In the end the fed is not going to go after any of these small infractions, like not offering a mail entry unless they get multiple complaints. That would depend on how much the company advertises their sweepstakes. I think Verizon sweepstakes is wrong and it puts a bad taste in my mouth. It would be nice if Verizon explained how their sweepstakes does not discriminate.

    • Hey Ken – thanks for all your thoughts! Loving that so many folks are adding to this conversation… I’ll do my best to touch on each one of your questions and comments you wrote in your three posts here.

      First, I’ll try to touch on “my argument is that we can run sweepstakes with no purchase necessary free entry for all to win a prize, but we can award additional entries with a completed purchase of a good/service. I’m really quite certain this is allowed” and “Upon further reading, I am convinced that as long as a state allows more than one entry per person per day then as long as there are no purchase options for all of the purchase options, and such no purchase options are not limited any more than the purchase options then you CAN have purchase options.”

      It’s my understanding that if you have a purchase option, you have to have a substitute option in place so that participants are able to receive the same amount of entries. So if you have 3 entry options, and the last one is to for example “Pre-order a book” (which is essentially a purchase), you would still have to have an alternative form of entry for this specific entry option so that those who don’t want to pre-order the book can have the equal chance to win as those who do in fact pre-order the book. When you read a lot of sweepstakes terms and conditions, you might read “NO PURCHASE NECESSARY” as the first line in the terms, but that often follows with “A PURCHASE WILL NOT IMPROVE YOUR CHANCE OF WINNING”, and I believe that if you have a purchase entry option w/o a free alternative method of entry, that’s not allowed.

      I’m not very familiar with the gambling laws of each state, but I do know it widely varies state to state, so I’m not entirely sure about Kentucky’s gambling laws, bingo halls, and how the online game lounge is set up. In trying to research this more, I did find a graph here that breaks down gambling laws state by state that I thought was interesting to look over.

      https://en.wikipedia.org/wiki/Gambling_in_the_United_States#Legal_issues

      As far as Facebook rules go, their promotion guidelines are fairly straightforward, especially in relation to the laws surrounding promotions, sweepstakes, and lotteries. In Facebook’s terms, it reads that as the page admin, you are responsible for the lawful operation of the promotion, including compliance with applicable rules and regulations governing the promotion and all prizes offered (ex: registration and obtaining necessary regulatory approvals). If your promotion breaks the law, it breaks Facebook’s terms.

      Even if your promotion is administered off of Facebook, if you advertise or promote it on Facebook, it can’t break the laws and can’t break Facebook’s terms of service. After that

      Behind the scenes, we’ve spoken to lawyers about this enough to be knowledgable on the subject to a certain extent, but I don’t know the answer to every question in regards to what’s legal and what isn’t, and unfortunately asking lawyers questions about each and every scenario is very expensive.

      I still haven’t looked further into the poultry sweepstakes, but it’s on my to-do list for a few reasons. I think it’s an interesting promotion, and I’m curious to dig deeper into their rules, who wrote them, and how they’re interpreted. When I do, I’ll be following up.

      In the beginning of your first comment, you wrote “I want to use your platform in certain ways and I can see others do also” — any chance you could elaborate on what you’re looking to do? I’d be curious to hear more.

      • Ken Conary

        Greg, I think you might have missed my 3rd sub comment under my first two. It’s about how to incorporate paid entries. I really think if someone were to figure it out and streamline through a platform such as rafflecopter then it would explode like wildfire. Enough to attract the FTC’s attention. That’s why I think that sticking to legitimate goods and services is a must because even if you didn’t have to have those involved, I think people would flood the markets with those and bring the FTC’s nerf bat down on it even for people with legitimate goods and services involved.

        What I want to do is nothing special. I want to do free giveaways on my facebook page. I also want to do sweepstakes with paid purchases, I want a streamlined platform such as rafflecopter that will collect all necessary information and randomly select winners and provide a report for the appropriate gov/regulating agencies. Leaving me the only work of contacting the winner and delivering prize. oh and marketing the sweepstakes of course.

  • Emily Endrizzi

    I enter a lot of giveaways. Lately I’ve been seeing many giveaways that are offering additional entries for purchase. This seems to be especially prevalent with book related giveaways. They ask you to purchase or preorder a copy of a particular book in exchange for extra entries at winning. Until recently I didn’t know that this was illegal. Then I saw this post. So now maybe I’m just noticing them more, but it is really maddening how many there are. Most that I have noticed are using the Rafflecopter platform though I have seen several using Gleam too. Rarely I see one doing this using the Giveaway Tools platform. My question is this: what can I, as a person entering a giveaway, do when I see a giveaway that is asking for a purchase in exchange for an extra entry? I’ve taken to copying and pasting the URL from this post in the space that they want the order confirmation. Grrrr… So annoying. The most blatant example of this was a $50 giveaway with an extra entry which read, “contribute to our beer and pizza fund” and a link to their PayPal account. In exchange for every $5 you donated you could get 7 extra entries PER DAY! It is an ongoing giveaway. Here is the link: https://gleam.io/w0CwT/the-support-likke-studios-50-amazon-gift-card-giveaway
    So what can I do in these situations? Skip the giveaway completely?

    • Hey Emily! It’s too bad you’ve found a number of promotions like this asking for purchases and basically cash for entries. We have seen a fair amount of book giveaways asking for a pre-order like you said, but most of the time we’ll see an alternative free method of entry listed in the T&Cs, so you might look out for that. As far as the contribute to our beer and pizza fund, that’s definitely in violation of ‘No Purchase Necessary’.

      It’s really up to you what you’d like to do. You could skip them and inform the admin the reasons why you’re skipping it. It’s possible they don’t know they’re doing something wrong. You could keep sending them the URL to this article as well ;)

      • Emily Endrizzi

        I’ll start looking at the Terms and Conditions more closely when I see a purchase option. Thanks for the hint. I’ve been continuing to put the link to this article into the Rafflecopter space when they want proof of purchase. We’ll see how that goes.

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  • kevin mathis

    Can I run a contest that requires members to send out invites to their friends and families? Have two sets of prizes. One, for each invite they get put into a drawing for lesser value prizes. Second, for users that sign up for a paid membership they will be put in a drawing for a larger valued prize?

    • Hey Kevin – I think it depends on the details, but it sounds like as an entrant, you’d receive additional entries by paying for a membership. Unfortunately I believe that would be against the rules and would probably advise against that!

  • Ted

    Can you add a prize to random boxes of product you are selling?

    • Hey Ted – can you be a bit more specific? I think I know what you’re referring to, but I just want to be sure.

      • Lt Kelly

        What if you were to add a redeemable ‘golden ticket’ to random packages of a product without ever promoting it or stating that is a contest?
        Thanks

        • I believe that would be within the guidelines. I’ve received plenty of items in the mail where I’ve gotten a coupon or and extra goodie. So long if it’s not a promotion that states that those eligible for prizes have to make a purchase, I think you’re good.

  • Is rafflecopter a sweep stakes only? Can you make it a contest as in order to run it on my Australian business there needs to be an element of skill involved.

    • Hey Robyn! Rafflecopter was built to be more geared towards sweepstakes but we’ve had plenty of people use it to run contests as well. It would just be a matter of choosing your winner to your contest manually vs using our random generator.

  • Matt

    Hey Greg! Thanks for this article! Shed some light on a current project. I wanted to ask a specific question regarding crowdfunding and giveaways.

    Where would the red flag in this be?

    If a friend of mine was selling his bicycle for $500. I wanted to buy it but didn’t have the money, so I start a crowdfunding campaign. 500 generous “backers” each give me $1 and I can now purchase the bicycle from my friend. I ride the bicycle for about a month and get sick of it. Can I give it away to one of the 500 “backers” as a thank you?

    • Hey Matt – thanks for reading. If you were to just choose one of the backers and give it to them for free, I believe at that point it’s your bike so you can do what you’d like with it.

      I think it would be a gray area if you were to hold a giveaway for it and only open it to those 500 backers though. Also I think it would be a gray area if your intentions were to give it to a backer before you started the crowdfunding campaign.

      Hope that’s helpful!

  • Rosas Susan

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  • Anton Gething

    Thank you Greg for the really helpful article. I have a question about sweepstakes:
    Is it possible to run a sweepstake with a donation page? This would not be payment and is not necessary to enter the sweepstake. The donation page would be to collect donations for charity, it would not be a purchase to increase odds of entry.

    • Hey Anton – you can certainly run a giveaway or sweepstakes as a means to market or bring attention to offering donations for raising money for a cause. We’ve had a handful of users run sweepstakes alongside a crowdfunding campaign for example. I would just be sure that your participants are aware entering the sweepstakes and donating to the cause are two separate entities.

      Thanks for stopping by – glad the article was helpful!

  • gab

    What if the item to giveaway is less about $50 only, is there a need to register?

  • Hey! Question. I find often that there are “pre-order” giveaways, which is you pre order something specific, you get a special “gift” and sometimes are entered in to win something else. Are these legal??

  • Brandi

    If it’s no purchase necessary, and you can’t charge for shipping then how is it you can ask for a stamped envelope? You’re required to purchase a stamp?

    • That’s a great question. Though somewhat of a grey area, my understanding is that having to purchase stamps to mail in an entry isn’t labeled as consideration and is maybe more labeled as the cost of doing business.

      You’re not purchasing the postage from the company that’s running the promotion, so it’s technically not an entry fee. The company administering the promotion isn’t profiting off the sale of postage. Hope that helps!

  • Laxmi Hariharan

    I am based in the UK – do the above rules apply to me? Or am I governed by UK laws related to giveaways?

    • Hey Laxmi — this post was written specifically with the US laws in mind. I know there are some differences between the US and the UK laws however.

  • After reading through all this, what wasn’t explained is what should I call my Rafflecopter “thing”? Sweepstakes is so long & confusing, so in our Facebook post we said … Enter our GIVEAWAY for a FREE custom drawer organizer you get to design yourself! Click here to enter the contest … but now I’m thinking I’ll get in trouble using the word contest?

    • Hey @tinagleisner:disqus – as we explained in the post above, a contest is defined as ‘an event in which people try to win by doing something better than others’ (vs winning by being randomly selected like a sweepstakes). Assuming that your event is a sweepstakes, calling it a sweepstakes or giveaway totally fine. You won’t get in trouble if you use the word contest either.

      If it’s helpful, here’s a Facebook post we’re using to promote our current giveaway: https://www.facebook.com/Rafflecopter/posts/1154427987952845

      Hope that helps!

  • Nancy Bailey

    Hi, I rent a space in an Antique shop and am looking for ways to get more foot traffic in the shop so I’ve been thinking of advertising a free raffle no money involved just come in the shop fill out a ticket leave one half in the bucket take the other half with you and we will call you at the end of the week if your ticket is picked! The item to be raffled is just something small a teapot or picture frame, etc. But for free! Just thought if more vendors in the shop participated then people would come in to see what is being given away. Is this ok , sounds like fun to me and think it would draw in foot traffic! Thanks

    • Hey Nancy! Yes – that’s definitely fine (and can be a great way to draw in foot traffic). If the raffle is ‘free’ though, technically it would be a sweepstakes. Raffles are typically associated with promotions where you pay for a ticket. But what you described is definitely ok – let us know if you try it!

      • Nancy Bailey

        Thanks so much for the quick response! next I will talk with the other vendors in the shop that may be interested and will let you know when we do this . Thanks again , now I feel better about going forward with this idea , take care , Nancy

  • Jinju Alphonsa Thomas

    Hi Greg! If I have an online survey that offers sweepstakes incentives, when do I have to launch it- exactly when the sweepstakes entry period starts, or during the sweepstakes entry period? Thanks!

  • Jinju Alphonsa Thomas

    Hi Greg! If I have an online survey that offers sweepstakes incentives, when do I have to launch it- exactly when the sweepstakes entry period starts, or during the sweepstakes entry period? Thanks!

    • Hey Jinju — I guess that’s ultimately up to you, but if it were me I’d try to launch them simultaneously if possible. It would probably reduce any confusion from you or your participants.

  • aeris bueller

    Thanks for the writeup. There’s something I’m still not clear on, though. Everything I find defines what a skill-based contest is, but doesn’t say anything further on its legality. If I want to run an online art contest, where we have a couple of judges choose the winner based on skill, creativity, etc, and give away a paypal gift card with somewhere between $500 – $2000 to the winner, can I do that? Do I need to worry about which country each entry is coming from? Do I need a special license or to file special tax forms? Do you know any terms I should search for to get better results?

    • Hey Aeris – the ‘No Purchase Necessary’ rules above apply to your promotion whether it’s a sweepstakes or a contest. If you have an online art contest that have judges determining the winner, that’s perfectly legal, I would just be certain to spell out exactly how the contest will be judged.

      The article above is written specifically for the US, so I can’t speak to these rules pertaining to other countries unfortunately. Generally, if a prize is large enough (usually over $500, but varies from each state), winners may be responsible for all taxes and fees associated with prize.

      I hope that helps! Thanks for stopping by :)

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  • Eco Cambra

    If I was to run a free raffle open to anyone, could I require that all participants subscribe to a FREE VIP Club newsletter?

    • Dave Criswell

      That sounds OK. As long as there is no cost to subscribers that sounds like it would work.

      To clarify the language you used, it would be a sweepstakes, and not a raffle.

  • Leah L. Giesler

    hello rafflecopter!! tinyhousegiveaway.co is (supposidly!) giving away a tiny house again this year, they classify it as a ‘giveaway’ and they are a non-profit organization… in the official rules they do mention an alternative method of entry is a handwritten postcard, but they do not actually specify which info must be included on the card, but they do state that ‘participants must include all info requested of them to be included in the drawing’. they havent answered any of my emails and the provided phone number never goes through. can you shed some light if you think this is legit and furthermore how i can get answers on exactly which ‘info requested’ they’d need for my postcard entries in order to be eligible?? thanks so much!!

    • Hey Leah – I checked out the giveaway’s terms and conditions on their page and agree they’re not well written and don’t provide a lot of direction as to how to enter without making a purchase.

      My best recommendation would be to contact them directly, which you’ve already done. If they aren’t answering any your messages as to how to enter without making a purchase, then I’d probably lean on the side of the giveaway not being legitimate unfortunately. Hopefully they get back to you with some answers!

  • Christopher Co

    How can it be called a No Purchase necesarry option when you have to mail them something? You have to buy the envelope and the stamp.

    • Hey Christopher – that’s a good question. I’ve wondered that too, and I can’t remember where I read this, but the read that the associated cost envelopes and stamps doesn’t count towards the no purchase necessary. When I find where I read this (and assuming that it’s a good source), I’ll update the article to include it.

      • Danielle Cain

        I would assume it is ok since the price paid for the envelope and stamp isn’t directly benefiting the company hosting the sweepstakes.

  • Shon Nohs

    Hi, I have a question, there are a lot of charitable sweepstakes game rooms around my area, they all have 1free entry every 24hrs but some require a 1 donation in order to redeem for your winnings. Is this legal?

    • Hey Shon! I’d probably have to know a little more to fully answer the question, but I do know that laws differ from state to state when it comes to charitable sweepstake game rooms. I’ve seem some of these rooms while traveling in Florida, and believe the rooms have to be a charitable, nonprofit, or veterans’ organization to qualify.

  • erin chance

    If a nonprofit and a company partner in a sweepstakes, do the same laws govern or are there more regulations

    • Hey Erin – I guess it would depend on the situation. If it was a non-profit running a raffle and a partner company was helping to promote it and they weren’t benefitting financially from it, I don’t think there would be a problem!

  • Ches

    Hi Greg, for a sweepstakes… can people enter by watching a paid advertisement? Thanks!

  • Mark Stafford

    I wonder how this may apply to loyalty programs or promotions. We host painting events/classes at local restaurants. We give our customers a free registration into our painting events for their birthday but require them to have paid for/attended at least one event to get the free registration code. But we have some who have signed up for our email list, provided their birthday, but never have been to any of our events yet. Are we wrong to say that you have to paid for a registration in order to get your free birthday reg. I personally don’t think this applies to “no purchase necessary” since this is not sweepstakes, lotteries, or raffle. Perhaps a giveaway, but if you are a customer (attended before), then you get it. It not a “get it by chance”.

    • Hey Mark – good question. I believe everything you’re doing is fine. Like you said, the no purchase necessary rule doesn’t apply because it’s not technically a sweepstakes. I’ve seen and participated in plenty of loyalty promotions like this and don’t have any reason to believe what you’re doing is wrong in any way.

  • Ches

    Hi Greg… just reposting my question: is it allowed to have people enter a sweepstakes by watching a paid advertisement? Or is that a “consideration” as well?

    Also, in a sweepstakes, does there HAVE to be a winner? Or can the prize “roll over” just like in some lotteries.

    Thank you for helping out!

    • Hey Ches – I can’t recall seeing a giveaway where having participants were asked to watch an advertisement (I’m assuming it would be a video ad?) but I don’t believe that would be considered illegal unless they had to pay to watch it or if it was excessively long. I believe that would be alright.

      We’ve never done a sweepstakes where the winner was rolled over into another giveaway, but I don’t think that would be illegal either so long as your entrants are aware that might be the case. Having said that, if the giveaway is only rolled over because it didn’t receive enough entries (like a giveaway that states “if we get less than 100 entrants a winner won’t be selected and will be rolled over”) as an entrant I’d be a little put off. Just something to keep in mind.

      I hope that helps!

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    Our prizes make great little gifts to those who have an interest in #astronomy #meteorites #space

    Good luck!! You have to be in ti to win it! Our next draw starts soon!

  • Marie

    I am a small business owner and I’m putting together an event for around 300 people. It is a ticketed event and the plan is to charge a ticket price which includes entry into the event, food, drinks, some product and a raffle ticket for a door prize. Firstly, I want to make sure this is okay, which from what I’ve read on various sites, seems to fall within the guidelines. Secondly, is it allowed to give more tickets away with purchase? So if they buy x product, they get another ticket? Thanks!

    • Hey Marie! I’m not 100% certain, but it sounds like the your promotion would be ok. I’m a little more hesitant to say that giving attendees the opportunity to purchase additional tickets would be more of a gray area and wouldn’t recommend doing that (unless your business is a non-profit and you’re doing this as a means to raise money). I hope that helps!

  • Daniel Leeds

    Great post Greg!
    I have a particular situation in which I’m not sure which laws I fall into. I am looking to host a fundraiser benefitting a charity organization through my for profit business. We want to giveaway two of our products with a combined value of $2500 and are looking to raise near $10,000 in donations. We want to require a donation for an entry as the point of this fundraiser is to raise money for the cause of the non-profit organization. 100% of the money collected will go directly to the charity organization. I’m confused as to where this would put us as we are not keeping any of the money raised. We ideally want to host a raffle but from the research I’ve done, I have not found much information as to the legalities of my situation.

    Thanks,
    Daniel

    • Hey Daniel! To tell you the truth, I’m not certain where this would fall. Since 100% of the money raised is going to the non-profit, I’d imagine that if the raffle was run under the non-profit company, it should be 100% fine. There might be a way for the promotion to be held under your company, but I’m not 100% certain how that would work since you’re a for-profit company running it for a non-profit.

      Sorry I can’t give you a better answer. That aside, I’d imagine that the prizes that you’ve donated to the raffle would give you some sort of tax write-off as well.

  • disqus_L9QsXbHZGq

    Can I run a 24hr promotion where I give someone (for example) a pair of shoes for the first two purchases of luggage? “Be one of the first two people to purchase luggage and receive a free pair of shoes. All other luggage purchases made within the 24hrs will receive a $10 gift card”. I couldnt find anything about a promotion ran in that way. Thanks for your help!

    • I actually worked for a company in my years prior to working at Rafflecopter that tried to do almost exactly this. Our legal department freaked out and demanded we take down the promotion immediately. Based on that, I’d probably advise against that! Hope that helps :)

  • Vlad

    Hi Greg!

    I have a question about Twitch (popular game streaming platform) giveaways. They provide their customers (streamers) with an option to do giveaways, where participants (viewers) would have to type in certain word in chat to enter the giveaway. The streamer in turn, has an option to set up a multiplier assigned to every entry based on whether or not the participant is following their channel (which is free and anybody can do), or if he/she is subscribed to their channel (which is a $5 fee per channel per month to be subscribed). So in other words, the person who is doing a giveaway can increase a chance of winning the giveaway by lets say x10 times if such participant is subscribed to their channel.

    Do you think that this might violate the no purchase necessary law?

    • Hey Vlad! Tough one – definitely a gray area. If everyone is able to enter, but those who are subscribed get 5x the entries because they’re a paid subscriber, that could possibly be in violation of ‘no purchase necessary’. I don’t know with 100% certainty one way or the other, but if it were me, I’d probably avoid running a promotion in that capacity. I hope that helps!

  • JessicaR

    I’m not sure if you guys read the comments on this post anymore, but I figured I’d ask anyway!

    Any idea about this set-up: What if you run a paid membership site and give away random gifts (I guess those would be considered “prizes”) to paid members? They would not have to enter to win anything and would be eligible simply by being a member. There are many other membership perks, so it’s not as though they’re becoming a member to enter a drawing.

    Thanks!

    • Hey Jessica! To be honest, several other folks have asked a similar question and I’m not sure the legality surrounding that. That said, my gut tells me that shouldn’t be a problem (paid membership includes these perks and one of the perks being you’re entered into member-only drawings). Sorry I couldn’t be of more help!

      • JessicaR

        Thank you, Greg! I appreciate the response. It’s crazy how tricky this whole thing is!

  • Nicholas

    Thank you so much for writing this article; it’s fantastic information.

    What if you run a sweepstakes that allows anyone one entry without any purchase necessary, but you then award additional entries based upon usage of a free online service? This seems like it falls in grey area. There is no purchase involved at all, but the usage of the free service takes time and effort so that could be seen as consideration.

    In short: is it okay to award extra entries based on free service usage as long as at least one entry is provided to anyone free of purchase or excessive effort?

    • Hey Nicholas – sorry for the delayed response! The whole idea of what is ‘consideration’ and what isn’t is somewhat of a gray area. In general, I don’t think signing up for a free online service like Twitter or Facebook falls into consideration. Unless if it took a long time to sign up for that service (like if you had to fill out a 30 min survey or something along those lines).

  • adam

    Hi Greg,
    I was going to throw a St. Patrick’s Day party (in ohio) in which we sell tickets to the party which includes food, booze and entertainment. We were going to try to give away a new motorcycle at the party for everyone in attendance. If we had the party goers fill out a separate form to enter the drawing and not use the paid tickets to get into the party would that be ok? Trying to figure out a way where we would be in compliance with the law.

    Thanks so much

    • Hey Adam – we’ve had a few comments ask similar questions. Long story short, I’m not certain if that would be in compliance or not. It makes it easier if the money collected from the tickets was going to charity, or if the party was free to attend. Sorry I can’t be of more help!

  • Alice Fleenor

    Can you run a contest to give away a partial scholarship? It requires no money to enter, however the winner would ultimately be responsible for the other half of the tuition not covered by the scholarship.

  • Teresa Johnson

    I learned a lot just by reading this article thank you.

  • Abdul Ali

    For Sweepstakes, do you have to have a start and end date? Is it possible to instead have a number of entries instead of an end date?

    • I don’t know legally speaking if that’s allowed, but I don’t think you see too many of those kinds of giveaways because they’re probably not that attractive to the entrant. As an end user thinking about entering a giveaway, I wouldn’t enter a giveaway without an end-date.

  • Danielle Cain

    I run a direct sales business in which giveaways/sweepstakes through engagement posts on social media is very popular. I understand the consideration qualifications that need to be avoided (no purchase necessary, etc). But does the prize given have any rules? Can it be a % discount or $ discount on their purchase or doesn’t it have to equal at least the lowest price item that I sell so that no money is required to redeem their prize? For example, if I award them $10 off their next purchase and our lowest priced item is $25, they will be required to still spend $15 in order to redeem their discount. Is this allowed?

    • Hey Danielle – I don’t see why you couldn’t give out discount coupons as a prize. I think the only snag you might run into is that not a lot of entrants would care to participate knowing that the prize is a coupon (or something along those lines).

      Instead of saying you’re giving out a $10 coupon towards their next purchase, you could give out a $10 gift card. That might be more enticing.

  • Janice M Bianco

    Turner Classic Movies is running a contest to be a guest programmer with Ben Mankiewicz (one of their presenters). You have to be a member of their “Backlot” club to enter the contest which involves an $87 membership fee. Isn’t this illegal? You can’t enter the contest unless you are a member and to be a member you have to pay money.

  • Marisa

    Hi – can I have a sweepstakes where anyone can enter, but they can get additional entries for trying on the clothing I am selling?

    • Hey Marisa – you could do that I believe (in fact, I don’t see why not!). I’m assuming you’d award an entry for someone trying on something in person at a store location?

  • Bryan

    Is it legal to give bonus entries for a purchase as long as there is a no purchase necessary option like with the McDonald’s Monopoly?

    • Hey Bryan – despite game pieces coming on items which you purchase from McDs, you can still acquire game pieces without purchasing anything. So people without any money to purchase their food aren’t necessarily at a disadvantage in relation to people who do. Hope that helps!

  • Mike Judy

    Hi all. Do you know if it’s okay to say “Enter to win a Maui vacation” or do you have to say “Enter for your chance to win a Maui vacation”?

    • Hey Mike – I’ve read both ways. To be safe, you could use ‘change to win’, but we’ve used ‘enter to win’ for a while and have seen plenty of larger companies in the space running large sweepstakes using copy ‘enter to win’. If you have well-written terms and conditions, I think that’s the best safety blanket.

      • Mike Judy

        Thank you, Greg. Makes sense. I think we’ll go without the extra “for your chance” language.

  • Teri

    I have a question: In my business we often run giveaways for “15 happybucks”. No purchase to enter and the winner is randomly selected. The person who wins has the opportunity to use the happybucks towards a future purchase. Is this ok?

    • Hey Teri – it sounds like the equivalent of giving out gift card or gift certificates. I don’t see a problem with that!

      • Teri

        Thank you! :)

        • Teri

          One more question: even if there isn’t a product 15 or under? Say worst case scenario. That wouldn’t matter right?

          • Teri

            This has already been answered. Ignore this question. Thanks.

  • Gama Martinez

    Can I run a contest where one entry ticket is given for free and second one is given with a purchase?

    • Hey Gama – can you expand upon what you’re trying to do? I’ll be able to give a better answer if you could provide a bit more detail!

  • creamcheese_1234984

    Hi Greg. I am happy that I’ve come across this thread. My company (we are a for profit co.), we publish a niche newspaper and will have a booth at various events. I would also like to increase our subscription readership through a raffle type item that we would give away. For example, purchase a subscription (at a price lower than our regular rate) for yourself or sponsor a subscription and you will be entered for free into a raffle or a drawing to win this (blank) item.
    Would this be proper? Or how can I modify it’s structure to comply legally?

    • creamcheese_1234984

      We would limit this to the first 50 subscribers.

    • Hey there! I’m reading your description and “purchase a subscription for yourself or sponsor a subscription and you will be entered for free” isn’t clicking with me because you’re not being entered for free if you’re purchasing a subscription.

      If at any point an entrant can better their odds of winning by plunking down cash, it’s illegal. You could have people participate by signing up for your newsletter (assuming that’s free and not paid), or really complete any task that benefits you and doesn’t cost entrants anything to complete. I hope that helps!

  • Super Agario

    Hi Greg,

    Can you limit the number of entrants to a sweepstakes giveaway? For example first 500 entries received?

    • Were you thinking about limiting it to where the first 500 entries receive the prize, or once 500 people entered, you choose a winner from that entry pool randomly?

      I believe both instances are allowed. I’ve seen a handful of giveaways where the first x entries receive the prize. I think it would be easier to write terms and conditions for, but I’m sure it wouldn’t be terribly difficult to do it the other way mentioned.

  • Christoph Müller

    Hi Greg, awesome article and interesting to read through the comments. Hope you still are looking at this comment section and can get back to me.

    I have understood that you can’t run any sweepstakes if there is a condition to the entrance. Even a facebook like, tagging some friends or whatever else could be looked at as a purchase, at least from some (or even majority) of the states. The problem seems to be that a judge could define that the facebook likes you gathered while doing the sweepstakes gives you more marketing power which results in more profit. So in the end you are financially benefiting from the sweepstakes which could be interpreted as a purchase. So basically you really can’t run any sweepstakes if it is not free for all participants. Is this correct or completely misinterpreting it?

    I also have understood that if you do ask for a purchase aka condition to participate, then it automatically would be a lottery/raffle. So the only way to get around it would be to convert it into a contest. So this means for contests it is allowed to ask for a purchase aka specific conditions to participate (like follow my page, tag some friends and what not). The only way to do this is to make the giveaway NOT drawn by luck but by skill. Is this correct?

    Then what I’m really curious about, is, the option to have a free way to enter the sweepstakes. My particular situation: I would like to run a sweepstakes that the contestant has to download an app to his/her phone, achieve a certain score, screenshot it, post it to my social account and tag 5 friends. Everybody that does all that applies to the giveaway. This conditions will make it a lottery/raffle since the entry isn’t free. I will benefit financially from it because even though the app is free, people are forced to watch ads every now and then. Also, all social things they need to do (following, tag 5 friends) benefits me marketing wise and in the long run financially. So it is a ‘hidden’ purchase like I said above. So if I add a free way of being able to participate (for example by sending a physical letter to a specific address) would this then make the giveaway legal and count as a sweepstakes?

    And a last one: if the the option above would make it legal, can I make different prizes for the free entry and for the conditioned entry? Like: enter free by sending a letter and you qualify to win $100, enter by doing everything else (download the app, achieve a score, screenshot it…) and qualify to win a boat cruise trip?

    Hope you can get back to me. Really appreciate it.

  • Signe Gee

    If I have a club for my business (DSA Business). A hostess of the month club. I would have 6 people commit to buying a certain number of items every month. Each of the 6 individuals sign up to receive the hostess benefits for a specific month. There is no drawing, no contest, and no chances of any kind. The party earns certain benefits based on the amount of product that is sold at that party. Again there is no prizes, no competition, no giveaways for entering or anything like that. My question is does this fall into the issues discussed in this article?

    • Hey Signe – from what you described, I don’t believe what’s discussed in the above article applies. Hope that helps!

      • Signe Gee

        Thank you. It does help. I didn’t think it was the same thing, but a friend of mine was just cautioning me to make sure I read up on what is legal and what isn’t. I will also be asking a lawyer’s advise before I jump into anything that may get me in trouble. Thanks again.

  • Magic Filou

    Hi!

    Here my question :

    If the rules of the sweepstakes are :
    No purchase necessary !
    Register for free to the website and earn points
    To earn more points you can: add comments, reviews, sharing content, liking content, referral program, click on links, earning points when is your birthdate … etc a lot of free way to gain points…. when you have enough points you can participate in the sweepstakes to win a smartphone.

    BUT !!! in the same time …. there is an option : “if you want to have points faster you can purchase points !”

    Free points or paid points are the SAME !!! you don’t have more chance to win if you purchase point or not ! it’s just a solution to reach more quickly the amount of point necessary to participate. Each point has the same weight !

    Still a legal sweepstakes ?
    Tks
    Regards

    • From the sounds of it, doesn’t sound terribly legal to me. Sounds like an illegal lottery.

      However, there are factors that I don’t know (where it’s being run, the entire terms, etc) that might make it alright, so I can’t tell you 100% one way or the other if it’s legal. Feel free to provide a link or details if you’d like!

  • Chris

    Hey Greg, I assume there is no problem for a business to run a promotion in which if you purchase something, you automatically receive something else? (For instance, buy a subscription to a magazine and you are guaranteed to get two free tickets to a sporting event.) As long as it’s not a contest – and instead the same outcome is guaranteed to everyone – is there any problem with requiring a purchase in order to get the other item(s)?

    • Hey Chris! I don’t see anything wrong with that. It would be smart to word it so that customers know they’re all receiving the same thing. If you had a promotion set up where it said “All customers to purchase between x and y dates will receive a prize. Some prizes are better than others”, that wouldn’t be legal. But like you said, the same outcome is guaranteed to everyone, so I believe you’re good to go. I hope that helps!

  • Marcus Clark

    Hi Greg! I have a question for you. Here’s my work scenario (I am changing the items, but the situation is the same): We, in Texas, want to bring someone on a trip to Canada to be on a movie set. We want to promote our new camera(sell them obviously). We also want to do a no purchase necessary giveaway of the same trip/opportunity. We wanted to offer a, buy a camera get an entry, plus get an additional entry for each accessory you buy. On top of that we would offer a friend referral, if they make a purchase, for additional entries. Its seems that this is not legal so I am trying to figure out what options we have. Could we run both promotions together and mix the purchase entries with the free entries, such as tweeting, email, social sharing, etc.? Thank you in advance for your help! Also, B and H photo does a thing where when you make a purchase, you get an email a few days later asking you to write a review on said product and you’ll enter a drawing for a chance to win a $250 gift card to their store. How is this possible? Thank you

    • Hey Marcus! I think any entry that requires a purchase is such a gray area, even if you have other ways to enter that are free for those that haven’t made a purchase. Based on that, I’d still recommend removing the purchase entries like you discussed.

      Any chance you have any copy or verbiage surrounding the B&H promotion? I’m not sure how it’s run to tell you how they navigate the ‘no purchase necessary’ laws, but I’d be curious to check it out and look into it further!

  • Elessar

    What are your thoughts on the legality of Omaze (https://www.omaze.com)? Their model appears to be some sort of cross between a sweepstakes and a raffle. They offer free entry (by mail and online), but also allow you to “donate” to charities / non-profits in exchange for more entries (additional chances to win). Omaze itself appears to not be a non-profit, but rather a private company that takes 20% of the donated amount.

    Seems like this wouldn’t be legal, since donating more increases your chances of winning, correct?

  • Kristie Lynn

    Just curious if you could help clear this up for me. We are a travel company and were going to do a drawing for local football tickets and anyone that booked (put their deposit down) on a $2800 package would be entered to win. I see that that would be considered an illegal lottery so we were wondering if we did “First 6 clients to book a $3800 package will Get a pair of tickets to one home game” we would let the client draw for the particular game since even though the actual ticket prices are the same, the “perceived value” vary (ex. rival team tickets go for more through scalpers than the homecoming tickets that cant be given away).

    We currently give gift baskets of different values to clients on depending on their total cost of the booking (2500-3000 get gift card; 3001-3500 get plush animal and gift card; 3501-4000 get movie, plush animal and gift card ect) we do not advertise this it is just a gift to the client as a thank you for booking that they recive when they get their travel documents. The above promotion would be advertised (Social Media and Trade shows)

    Any insight is appreciated.

  • tante vieh

    Right now, Lowe’s is offering a $100 give-away. In order to enter the contest, they require you to complete all the steps on their entey form. The very first step requires the applicant to SHARE Lowe’s on Facebook? This sounds like “consideration” to me. Those who don’t have a FB account (or have an aversion to being used as an advertizing agency for Lowe’s) are, thus, automatically excluded from the chance to win the $100.

  • MJ

    Hi! I am looking at running a promotion to award my top performer in my affiliate program. Performance would be based on the number of visitors sent to our website and sales. I’m concerned if it would be legal because performance for affiliates is measured by sales. But I am bringing in the website visitors in factoring their performance. Would that be legal?

    • Bogdobbler

      You are talking about running a competition among (essentially) your business partners. That is purely a business activity and has nothing to do with running the types of promotions discussed here. You’re fine.

  • Marsci Beach Dye

    I run a boutique, can I run a seeepstakes where the winner gets $10 to spend with me but I dont have anything that has a $10 value thus requiring them to spend money to use their winning prize??

    • Bogdobbler

      That is perfectly acceptable. They don’t have to pay anything to enter or win, and they don’t have to use the prize if they do win. Basically, you are giving away a coupon.

  • Ashley Thorne-Jeffrey

    What about this? The primary method of entry is to purchase a product, let’s say it gives 10 entries. In the TOS or the fine print, it says that no purchase is necessary and that if you email us with a specific subject line, you can get those same 10 entries for free. This is essentially what McDonald’s do with their Monopoly sweepstakes, no?

  • Charles Peterson

    If I have a monthly subscription service for product and I want to give away bonus items to 5 random paying subscribers does this still fall under the same rules?

  • Vince Roberts

    If I am selling one item (for example, an old baseball card) and have an ad that states “if you buy this baseball card you get the following items for free:” and one of those free items I mention is lottery tickets, is this legal?

    Second question: Same as above except I don’t directly mention the lottery tickets in the list of free items, I just tell them they’ll receive something that might be worth a lot of money.

    Thank you.

  • Cat

    Well I hope you are still answering questions about this… we have an event where the 1st 25 guests get a free shopping bag within 4 of those bags is a gift certificate to be used that day with one of the vendors displaying at the event… is that illegal?

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  • Peter Bacot

    What about sweepstakes-promotions by a for profit entity, which is only open to members, where the (ongoing) membership is contingent on paying fee.

    • Question: Can I ask entrants to post a review on Amazon for my company’s product or book as an entry into my giveaway?

    • Fantastic, thank you!

  • Jeremy Schubert

    What about requiring somebody to enter a sweepstakes on site? That is, the requirement is that you show up to the business. There would be no purchase necessary, but they have to do it on site.

  • Michael Steines

    Hi Greg,

    Ok to offer a sweepstakes with no purchase necessary for one entry but offer additional entries based on level of dollar purchases? Say an additional entry for every $10 spent?

    How about they can only enter in one of our stores, and they can fill out up to one entry card per day, still no purchase necessary? Month-long sweepstakes.

  • Laura Laurie Harrison

    I just run across a sweepstakes to day that REQUIRES a purchase to enter a code to win a prize. (a hat) The company (Beer Nuts) is based out of Illinois. There is no alternate way to get this prize. Are they running an unlawful sweepstakes and how do they get by with it. it is a pretty large company. http://teambeernuts.com/

    • Sally

      If you read their rules, they have a free entry method – you can request an entry by mail. One out of every 12 cans of nuts contains a winning code, and likewise, one of our every 12 entries they mail has a winning code. So they do have a free entry option, making it a legal sweepstakes.

  • TampaBayContests

    I very much enjoy this thread. Thanks

  • Bob

    HI. Is it legal for a company to have different prizes for paid and unpaid contest entrants? Thank you!

  • Matt

    What if EVERY guest who purchases something is getting whatever prize they pull out of the ‘hat’?

  • Tish Ivory

    Pertaining to Direct Sales business. If a person who sells a product like Tupperware, for example, offers a prize if the total sales to the party qualify for a show. In other words Tupperware company, for example, says in order for a host’s show to be deemed a show, she must have reached say $100 in sales. So the DS consultant runs a promo giveaway that says if the show reaches that $100 in sales someone who attended the party (not necessarily one who purchased, just was present) will get a free gift. Is THAT legal?

  • Hara Taicher

    putting on an event in north carolina.
    It’s a day event outside….music, food and drinks
    we are wanting to make it a fundraiser for a not for profit, so there will be
    tickets sold.
    We also wanted to have gift baskets that could be either auctioned or raffled off..
    I see the word raffle is connected with the thought of gambling, or lottery…
    what do you suggest we an do?
    thank you

  • Heather Jones Wigger

    our schools waterpolo team is hosting a parent morning meeting which we will sell tickets for 5.00 for breakfast (fundraising part). we had coffee juice donuts & bagels donated. we are trying to get as many people there as possible. we are planning on having a drawing for a water polo bathing suit that is valued at 75.00. i want to be careful in my wording because this is for our school. can i say “if you attend the breakfast meeting you have the chance to win a bathing suit valued at 75.00”? as long as i say no purchase required. i mean if they buy breakfast that’s great, but we want them at the meeting.

  • Jenn

    So does it violate the proof of purchase clause if there are several free ways to enter (like following on FB) as well as extra entries given for pre-ordering a book?

  • Suzanne Schwarz

    What if I want to give away discounts? Giving scratch tickets at the cash register and discounts scratched off are immediately given? No cost to them. Just the gift of money off?

  • Gerard

    My question may seem out of discussion, but it is still concerning sweepstakes,raffles and lotteries. Though I am not sure where a BINGO event falls?

    My question is: Should the winner of a BINGO event be concerned on where the origin of the prize came from? Are the event organizers responsible for disclosing where they purchased the prize?

    Scenario: John won the grand prize in the Bingo event organized by his school alumni association. The grand prize is an electronic bicycle.

    Is he allowed to demand for a warranty card, original receipt of the electronic vehicle if there isn’t any?

    Thanks

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  • Philip Boltas

    So dunkin donuts is doing a pull and win with the purchase of a large hot or extra large hot coffee. If you are one of many who do not drink hot coffee and drink iced, and ask for a hot cup, they will not give a pull tab cup or they pull it off before giving it to you. Can they do that, seeing as iced coffee costs more then hot coffee? Hot large is 2.29, and extra large hot is 2.49. Iced med is 2.59. Just to give you an idea

  • Joel

    I recently saw an Instagram promotion saying I could win my money back on a purchase of a specific product from the company. I told them it was illegal to not have a free entry. They then told me I could enter by mail for free, but if I spent $0 then I would win $0 back. Seems like to win anything would require a purchase, as winning the contest of $0 isn’t really winning, is it?

  • Greg, thanks for the info. Can I put “WIN THIS CAR” on the vehicle. It is a giveaway but the winner is responsible for the tax and license fees. All this info would be on a website. We never say “FREE CAR”

  • Brandy Redder

    What about free game pieces that are given to customers for a Bingo game?
    Situation: my direct sales company gives free rewards to hostesses i.e. when we have a party for every x amount of product sold at the party, a % goes into rewards for free product for them (the hostess). One way we party is if there is no hostess we still give away the rewards based on sales for that week. So we give all the customers free bingo cards in their orders just to play a game at a later date for prizes. We just include these game pieces as a game to play as a thank you for partying with us. No one has ever asked for a card to play that didn’t make a purchase, we just explain that they’re included in their packages as a fun game to play as a thank you and the free product is given away when we play the party game. Is this ok ?