Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
A sales promotion provides an incentive for the consumer to “buy” by using a range of added direct or indirect benefits, usually on a temporary basis, to make the product more attractive. A non-exhaustive list includes: buy-one-get-one-free offers, money-off offers, price promotions, charity-linked promotions, instant wins, competitions and prize draws.
Because they can take many forms, the CAP Code has a specific section on sales promotions and this advice should be read in conjunction with the Code, the other entries on ‘Sales Promotions’ and the CAP Help Note on Promotions with Prizes.
Generally, promoters are expected to deal fairly with participants and should not give them cause for complaint or disappointment (Rules 8.1 & 8.2). That includes making a reasonable estimate of the demand for a promotional good (Rule 8.9 and ‘Sales Promotion: Availability’) and administering the promotion equitably and fairly. Because they are responsible for all aspects of it, promoters should take care that third parties, intermediaries and staff are aware of the offer and administer the promotion properly (Rule 8.14).
The Code states that promoters are responsible for all aspects and all stages of promotions (Rule 8.1). Some promotions, those in which more than one party benefits (for example, in terms of branding, promotion or revenue) are joint promotions or co-promotions. That does not necessarily mean that a company providing the prizes or gifts for a promotion is a joint promoter. But for promotions that are run jointly, all parties are responsible for the administration and execution. If it receives a complaint, the ASA will name all parties responsible.
Promoters should take care to ensure the promotion and any promotional goods are suitable for the target audience (Rule 8.3). Special care should be exercised when promoting alcohol, condoms or rolling papers or when targeting children (Rule 8.8). Promoters should not directly exhort children to buy (Rule 5.4.2).
Marketers should not confuse “free” goods and services with those that are “inclusive” (Rule 3.25). To help the industry, CAP has produced guidance on “free” claims. Annex practice 20 of the Consumer Protection Regulations (CPRs) prohibits marketers from describing a product as “gratis”, “free”, “without charge” or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item. See ‘Sales Promotion: Free’ and ‘Sales Promotion: Free Trials’.
Promoters should communicate in a manner that is clear and readily understandable by the intended audience. Conditions and factors likely to affect a consumer’s decision to participate in a promotion should be spelled out and rules 8.17 & 8.19 list those conditions (see ‘Sales Promotion: Terms and Conditions’). For example, how to participate should be stated, the closing date should usually not be changed once it has been set and any restrictions should be clear (Rule 8.17). In short, promoters should state accurately, unambiguously and completely all rules, entry instructions and other material terms of the promotion.
Promotions with prizes have specific clauses in the Sales Promotion section of the CAP Code. Although the Code is not a statutory instrument and neither the ASA nor CAP interpret or enforce law, promotions with prizes, including competitions, prize draws and instant-win offers could be subject to legal restrictions although promoters should note that The Gambling Act 2005 has removed the need for many promoters of prize draws to offer a “free entry” or “no purchase necessary” route. The situation is different for promotions in Northern Ireland. CAP urges promoters to seek legal advice if they are concerned that their promotions might not comply with relevant legislation (CAP Help Note on Promotions with Prizes). See also ’Sales Promotion: Lotteries’, ‘Sales Promotion: Free Entry Routes’, ‘Sales Promotion: Instant Wins’, ‘Sales Promotion: Prize Draws’ and ‘Sales Promotion: Competitions’.
The Help Note on Promotions with Prizes and the relevant ‘Sales Promotion’ section outline the main requirements from prize promotions. Promoters should not overstate a consumer’s chance of winning a prize. They should state clearly any conditions or requirements that must be satisfied before consumers can win prizes. The structure (or “mechanic”) of the promotion should be transparent and consumers should be clear whether they have won a prize or are merely being offered a chance to participate in a prize draw. Promoters should not misrepresent the value, nature or availability of prizes and should not state or imply consumers have won a prize if they have not. As well as being codified in rule 8.19, that practice is prohibited by the CPRs and rule 8.21.1, which reflects Annex practice 31, states that promoters should not create the false impression that the consumer has already won, will win, or will on doing a particular act win a prize if there is no prize or if consumers must incur a cost to claim that prize.
Promoters should not withhold prizes (Rule 8.15.1). That clause addresses Annex practice 19 of the CPRs, which prohibits marketers from “Claiming in a commercial practice to offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent”. If circumstances outside the reasonable control of the promoter result in the closing date being changed (for example, unforeseen delays by third-party suppliers in distributing promotional items to stores), promoters should strive to ensure that consumers who participated within the original terms are not disadvantaged. Changing the closing date or withholding prizes merely because the promoter does not receive enough entries is not usually acceptable.
This advice is designed to be read in conjunction with the Sales Promotion section of the CAP Code and the other entries in this advice section. Also, promoters might want to seek legal advice.
Last modified : 06 August 2010