December 18, 2014
We have frequently written about the marketing benefits associated with the use of promotional contests and sweepstakes. Promotional contests and sweepstakes often appear on social media platforms, which provide companies with a free and effective means to increase the number of consumers participating in their respective contests.
While companies must abide by the laws governing “games of chance” throughout the United States, if a sweepstakes promotion is offered through social media, the respective forum’s promotional contest policies must also be understood and followed. This blog focuses on contests appearing on Pinterest.
Pinterest: Pin to Win
If you decide to host a promotional contest or sweepstakes on Pinterest, please be sure to read its rules applicable to promotions and contests. In addition, Pinterest includes a “Do” and “Don’t” list that must be followed, specifically:
- Remember that Pinterest is all about people discovering things that inspire them. Reward quality over quantity.
- Make it easy to get involved with clear and simple instructions.
- Read Pinterest’s anti-spam measures to keep your contest fun and useful.
- Check out Pinterest’s branding guidelines if you’re going to reference Pinterest in any way.
- Suggest that Pinterest sponsors or endorses the contest sponsor or the contest.
- Require people to add Pins from a selection—let them add what they like.
- Make people Pin your contest rules. This is a biggie.
- Run a sweepstakes where each Pin, board, like or follow represents an entry.
- Encourage spammy behavior, such as asking participants to comment.
- Ask people to vote with Pins, boards, or likes.
- Overdo it: contests can get old fast.
- Require a minimum number of Pins. One is plenty.
- Call your contest a “Pin it to win it” contest.
Of course, Pinterest also cautions that contest sponsors must comply with all applicable state and federal laws and regulations, in addition to their Terms of Service.
By way of example, as we previously reported, the Federal Trade Commission (“FTC”) investigated the legality of Cole Haan’s “Wandering Sole” Pinterest contest to determine whether Cole Haan violated Section 5 of the FTC Act. While the FTC determined that contestants’ pins featuring Cole Haan products were improper endorsements of the Cole Haan products, the FTC did not take action against Cole Haan due to, among other things, Cole Haan’s adoption of an adequate social media policy and the fact that the contest ran for a limited length of time and attracted a small number of contestants.
Outside of the applicable Pinterest rules and Terms of Service, it is important to remember that the contest rules for a sweepstakes promotion are your contract with the contest entrants. This means that the rules of the game must be set in stone when the sweepstakes contest period commences, and should not be abandoned or changed mid-stream.
It also is important to note that sweepstakes are considered games of chance and, therefore, illegal lotteries under applicable law unless one of the following elements is removed: (1) a prize awarded to the winner; (2) chance in determining the winner; and (3) consideration for entry in the game. Consideration, or monetary payment, is the element most frequently removed by providing a free, alternative method of entry into the sweepstakes.
Further, as we have reported, prizes above certain cash (or cash equivalent) thresholds may trigger specific sweepstakes registration and bonding requirements in several states, namely Florida, New York and Rhode Island.
In sum, it is crucial to understand all applicable laws, as well as social media promotional contest guidelines, as appropriate, when preparing to run a sweepstakes. It is recommended that you retain qualified legal counsel to ensure that you get the rules right in advance, as well as to help you navigate any related issues that may arise during the course of your promotion.
If you are interested in learning more about this topic or setting up a sweepstakes-related venture, please e-mail us at firstname.lastname@example.org or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.