Trade promotions, where winners are randomly drawn, are a popular way for businesses to boost engagement, drive sales and reward customer loyalty. But running a trade promotion is not as simple as offering a prize. Each state and territory has its own rules around permits, advertising, terms and conditions, and record keeping. Running an Australian-wide trade promotion requires consideration of each state and territory’s rules.
Key Considerations
When planning a trade promotion, businesses should address the following:
- Timing: Define the start and end dates and times clearly.
- Prize Value: Check whether the total prize pool exceeds the monetary thresholds for permits in each state where the trade promotion will be held.
- Jurisdiction: Confirm which state or territory laws apply, based on where the promotion is conducted or advertised.
- Entry Requirements: Ensure conditions of entry are clear, fair and transparent.
- Winner Selection: Outline how winners will be chosen and what happens if they cannot be contacted.
State by State Requirements
Permit thresholds vary significantly:
- ACT: A permit is required if the prize pool exceeds $3,000.
- NSW: Permits are required for prize pools over $10,000.
- SA: Permits are required for prize pools over $5,000.
- NT: Permits are required above $5,000 unless one has already been obtained in another state.
- WA, VIC, TAS, QLD: No permits are generally required, but some conditions still apply (for example, submission of terms in WA).
Terms, Record Keeping and Advertising
Promoters must prepare comprehensive terms and conditions covering eligibility, prize details, how winners are chosen, and how results will be published. Record keeping is also essential, ranging from 12 months in WA to 3 years in VIC.
Advertising must clearly set out the rules, prize details and conditions. Certain restrictions also apply, for example, prizes cannot include firearms, tobacco or unsafe goods. Promotions must not mislead, encourage unsafe behaviour, or breach responsible gambling and advertising standards.
Penalties for Non-Compliance
Failure to comply with trade promotion laws can result in heavy penalties, including fines of up to $50,000 in SA, imprisonment in TAS, and significant sanctions across other states.
Final Word
Running a successful trade promotion requires more than an enticing prize. Careful compliance with each jurisdiction’s requirements helps businesses build trust and avoid costly penalties. Legal advice tailored to your specific promotion is strongly recommended to ensure smooth execution.
