If you want to promote your products or services through a nationwide trade promotion, you must be familiar with the different laws in each state. Your legal obligations concerning trade promotions vary significantly across the nation. Importantly, a failure to comply with the correct laws may result in heavy fines or even imprisonment. This article will explain:
- how to run a nationwide trade promotion that complies with the laws in different parts of Australia; and
- which states or territories require for you to obtain an authority or permit to run your trade promotion.
What is a Nationwide Trade Promotion?
A trade promotion is a free-to-enter competition used to promote a business’ goods or services. Typically, trade promotions are either a game of chance or a game of skill. For games of chance, you pick the winner at random. For games of skill, you choose the winner based on his or her skills. There must be no element of chance involved in determining the winner of a game of skill.
What Permits Do I Require?
In certain states, you must obtain an authority or permit to run games of chance. In New South Wales (NSW), South Australia, the ACT and the Northern Territory (NT), this authority or permit will depend on the total value of the prize pool. You do not need a permit to run a game of chance in Western Australia, Queensland, Victoria or Tasmania.
Make sure that you have enough time to go through the approval process before you announce the promotion. Failing to do so may mean that you have to push back your marketing campaign and launch date. This is especially important in a nationwide trade promotion, as each state and territory may take a different amount of time to process your authority or permit application.
NSW
In NSW, you will need to obtain an authority to run games of chance where the prize pool value exceeds $10,000. Any competition where the prize pool is less than $10,000 do not need an authority number.
Your business can apply for an authority online. The authority allows the business to execute as many promotional activities as desired under the single authority. There is no dollar value cap on the total prize pool awarded under any given authority.
You can apply for an authority which spans one, three, or five years. Authority fees depend on the length of the authority, which you can clarify on the NSW Fair Trading website.
NSW Fair Trading will process your application for an authority within five business days from the date of the application. You should lodge each set of terms and conditions for approval at least ten business days prior to the start of the promotion.
ACT
In the ACT, you will need a permit if the prize is worth more than $3,000. It generally takes seven business days for the ACT permit office to process a permit application.
SA
In SA, you will generally only need a permit if the prize is worth over $5,000. However, you will also need a permit if the competition is:
- an instant scratch; or
- a break open ticket with hidden numbers, letters or symbols.
The SA permit office generally takes 14 business days to process a permit application. However, you can speed up the process by paying a rush fee.
NT
In NT, you will need a permit if the prize is worth more than $5,000. However, you will not need a local NT permit if you:
- are running the trade promotion elsewhere in Australia; and
- hold a permit in another state or territory already.
The NT permit office generally takes ten business days to process a permit application.
Continue reading this article below the formTerms and Conditions
Each state and territory requires that you include certain information in your trade promotion terms and conditions.
Depending on the details of your promotion, you may need to include additional details in your terms and conditions.
Further, some states have prescribed periods of time in which you must draw and award the prize.
Other Requirements
Most states and territories require that you keep records of all entries for a specified period of time after the trade promotion finishes. Some states and territories also require that an individual scrutineer observes the draw process and makes sure that you treat all entries equally and fairly. Finally, if you require a permit to run your promotion, you will generally need to include your permit number in all marketing materials.
Consequences of Not Complying With the Laws
Each state and territory has its own penalties for not complying with their laws. Maximum penalties include:
- two years imprisonment; and
- fines of up to $50,000.
To avoid these severe penalties, it is essential that you:
- prepare for your trade promotion well in advance;
- obtain the relevant authority or permits; and
- have a legally sound set of terms and conditions in place.
Key Takeaways
If you intend to run your nationwide trade promotion, certain states and territories require you to apply for an authority or permit. You should:
- allow enough time for each government office to process your permit application before your trade promotion starts; and
- prepare your terms and conditions according to the laws in each state.
Importantly, you should ensure that your permits are approved before you print or finalise any marketing materials, as you will need to include the permit number. Your business could face severe penalties for not complying with certain legal requirements. If you need assistance in preparing the terms and conditions for your business’ trade promotion or applying for an authority or permit, please contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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