What to Know About Running Contests

For many businesses, a contest is a perfect way to reward loyal customers and bring in new traffic. Best of all, you don't have to be a huge company with deep pockets to start a contest. However, there are some legal matters you need to be aware of before diving into the contest arena. Keep these guidelines handy before considering launching your contest.

Make it a sweepstakes or contest.

Sweepstakes and contests might sound like the same thing but in the legal realm they are quite different. A sweepstakes is when a person merely "enters" to win something. That can be as simple as submitting an email address or sending a text. On the other hand, a contest involves some sort of skill like writing an essay. You'll want to make that distinction because each one comes with a specific set of legal guidelines/restrictions.

Make a list of rules.

You'll need to make a list of rules for your contest and then adhere to those rules. These rules should cover the typical items such as deadlines, eligibility requirements and rewards. They should also cover every possible scenario in terms of winning and losing. In other words, don't leave anything to second-guessing.

Make it region specific.

It's easy if you have a small neighborhood business and want to run a contest for your customers. You would only have to look up the guidelines as it pertains to your city and state. However, if you want to go national or international you're going to need to do a lot more research. This is why many contests have built in restrictions as to who can play.

Make sure you understand the online rules.

Obviously, the best way to reach the most potential customers would be with an online contest but that will open the door to a whole new range of possible restrictions. You might think it's a good idea to run a contest in order to get an expanded email list, but in reality you could be prevented from using those newly acquired addresses. Make sure you follow the rules especially when there is the potential for minors to be exposed to your contest.

Make sure you get a good attorney.

Suppose your contest involves printing "golden tickets" that a customer needs to find. What if the printer messes up and everyone gets a golden ticket? That scenario actually happened to Kraft Foods back in 1989 when suddenly all of the contestants in a contest were claiming brand new cars when there was only supposed to be one winner. Since then the "Kraft clause" was instituted to cover those kinds of human errors. An experienced attorney who has crafted rules and regulations for a contest will know all about those clauses and that's who you should be retaining to help with your contest.

When it comes to contests, you want to make sure your company comes out as the real winner!