It all seemed like a good idea at the time. Sitting around the table at the monthly management meeting, someone moans about how boring the company’s marketing has become. There’s no spark, no excitement! This triggers an avalanche of ideas culminating in a plan so deviously simple that everyone marvels that they haven’t tried it before. A competition! But not just any competition. Entry is secured only after the customer buys a minimum amount of product. Customers can also be persuaded to obtain extra entries, for a fee, of course. And at the end of it, the winner will be, *gasp* Mr B! Who happens to be the Big Boss’ husband. And who will, quietly and magnanimously, “return” the prize of an awesome overseas holiday to the company. The money raised from selling tickets will fund the marketing campaign, and the extra product sold will be a boon for company and sales staff alike. What you’d call a win-win solution! For the company, that is. You’ll forgive the customers for not embracing this scheme with the same sense of excitement.
Fortunately for the customer, South Africa has laws in place that prohibit companies from marketing schemes like this. The running of promotional competitions is a common way for companies to market and promote their products and services. After all, it isn’t often you get something for nothing. But before you charge forward with your competition like the proverbial bull in a china shop, you may want to check your competition against the following list:
Checklist of CPA requirements for promotional competitions:
- Is your competition a “promotional competition”? ie. it’s a competition that is organised by a business to promote their goods and services. If not, the CPA doesn’t apply (but beware, the Lotteries Act might!) If yes, then read on.
- Is the entrant required to pay something to enter the competition? If no, you’re safe. If yes, you may need to review your competition. The CPA doesn’t allow you to charge entrants an entry fee for a promotional competition.
- Do you have competition rules? You’re required to have these in place when you run a promotional competition.
- Have you specified a closing date for the competition?
- Have you specified who is eligible to enter the competition? More importantly, have you excluded employees, directors, members, partners, agents, consultants from the competition?
- Have you specified how participants are able to enter the competition?
- Have you given your entrants the opportunity to decline the usage of their images and information in your marketing initiatives?
- Have you appointed an independent professional to oversee the competition (eg. accountant or attorney)?
- Have you made plans to retain all records pertaining to the competition for at least three years?
Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.