A lot of businesses use social media to market and promote their products and services. A really common and popular way to do this is to run contests and giveaways on social media. Giveaways can help communicate your brand’s message to a larger audience, get the word out to potential followers, and retain the followers you currently have. There are a few things you must do to run a successful social media giveaway and avoid getting into legal trouble with the social media platform and the government.
Use the proper terminology
The terms “contest,” “sweepstakes,” and “lottery” all have important and distinct legal meanings.
- With a lottery, a person typically pays a fee or has to give something of value to enter. Private lotteries are illegal in most states; you do not want to hold a lottery on social media.
- Sweepstakes are similar to lotteries, except there’s no consideration for entry; ie., no charge, no purchase necessary. Sweepstakes on social media are typically something like, “tag three friends to enter” and the winner is selected at random.
- Contests differ in that they are a game of “skill” as opposed to lotteries or sweepstakes, which are games of “chance.” With a contest, typically someone has to do something better than someone else to win. Eg., “tag us in a photo, and the photo with the most likes wins.” So while winners of a sweepstakes are selected at random, winners of contests are selected based on performance.
The term “giveaway” does not have a special legal meaning attached to it and can be used interchangeably to refer to a sweepstakes or contest. It’s best to avoid using the term “lottery” in your social media giveaway. Also, be sure that your giveaway does not look like a lottery (even if you’re calling it something else).
Know the laws of your jurisdiction
Particularly, Instagram makes it clear in their terms and conditions that the person/entity hosting the giveaway is solely responsible for ensuring that the giveaway is lawful in all aspects. In other words, it is your job to know if you’re doing something unlawful in your giveaway. The social media platform you are using won’t give you advice on this.
Speaking of, laws regarding giveaways will vary by state (many cities and local jurisdictions, too). For example, some jurisdictions require a giveaway be registered if the prize value is over a certain amount. It is important to be familiar with your jurisdiction’s regulations.
Also, the federal government, and most social media platforms, require that you disclose any brand partnerships. This includes endorsements, or sponsorships associated with your giveaway. For example, if you are teaming up with another brand, tag them in your giveaway posts. Same goes for influencers and brand ambassadors who are promoting another brand’s giveaway. Tag everybody who is involved in the giveaway, and do NOT tag people who aren’t. If you decide to run a giveaway where the winner gets a pair of Levi’s jeans, you should not tag Levi’s unless they are actually involved in the giveaway.
Here’s an example of a well-done Instagram giveaway between two brands:
In sum, giveaways are a great way to boost consumer engagement and outreach online. Though it can backfire if you don’t know the legal regulations and restrictions. Tune in to this episode of All Up In Yo’ Business to find out how to run a successful giveaway.
Obtaining legal guidance from an experienced attorney before conducting a promotional campaign is a great way to ensure you don’t make any mistakes. Schedule your Discovery Call now to get started.