It\u2019s important to ensure that the promotions you run are in compliance with local, national, and international laws. Failing to do so can result in fines, penalties, or even lawsuits! That\u2019s why it\u2019s essential to understand the laws that apply to giveaway promotions before yours goes live. Here\u2019s what you need to know to run a successful giveaway campaign in the United States.<\/p>\n\n\n\n
It\u2019s incorrect to call a giveaway a contest because the prizes are not being awarded based on merit. Giveaway is not a legal term, but the closest equivalent is a sweepstake where entrants win a prize randomly. You can use the term giveaway for promotion, but the term sweepstakes should be used for your rules and regulations.<\/p>\n\n\n\n
One of the most basic rules for any sweepstakes is that no purchase is necessary to enter. You can set it up so people that make a purchase are automatically entered, but you must also have a way for people to enter that do not make a purchase. It\u2019s important to make sure that the \u201cno purchase\u201d entries are easy to do, and not intended to discourage participation.<\/p>\n\n\n\n
There is no legal limit on how much you can give away, but the higher the amount the more complicated it can get. For example, if your prize is worth more than $600, you must file a 1099 form with the IRS. New York and Florida require that you register and bond your sweepstakes if the value of your prize is $5,000 or more.<\/p>\n\n\n\n
You must have a prominently displayed rules page with the following information clearly presented:<\/p>\n\n\n\n
How to enter the sweepstakes with and without purchase;<\/p>\n\n\n\n
You may not change your rules once they are posted, absent a global catastrophe.<\/p>\n\n\n\n