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| Legal
and Regulatory Issues |
Many
aspects of promotion marketing using incentives are subject to federal and
state regulation. It is advisable to have your program checked by an attorney
who specializes in promotion law.
The most critical issues involve games of chance and products packaged with
food. Consumer promotions in the food industry can be affected by potential
health and packaging concerns, and all consumer premiums have to meet the
highest standards of product safety. Programs involving tobacco and liquor
are heavily regulated by the federal government, as well as by state authorities,
and most tobacco programs are now taboo.
Sweepstakes and contests are getting greater scrutiny than ever as a result
of aggressive promotional strategies used in the magazine subscription business.
Remember, no sweepstakes or contest can require a purchase for entry.
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| If
you decide to run a sweepstakes or a contest, the rules must: |
1) Explain the nature of the random drawing and who will
conduct it
2) Spell out any people, such as employees, who are excluded
3) Clarify the geographic scope
4) Outline prizes and how people will be notified
5) Disclose the odds of winning
6) Describe limitations and disqualification criteria
7) Address the issue of sales tax or income tax liability
8) Tell people how to find out who won
9) Require winners to provide the sponsor with the right
to publicity |
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