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Thread: Running an in-house raffle/sweepstakes - How do we do this on our own?

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    Arrow Running an in-house raffle/sweepstakes - How do we do this on our own?

    Wanting to offer a contest for customers who purchase from us. Seemed simple at first.. buy a course from us and you are entered and prize will be drawn x/y/zzzz. In looking over contest rules with facebook, youtube, etc..it's rather vague. In looking at legal websites, they seem to imply that the Government is going to tell me how to run my business and not let me give things away to paying customers? Is that correct?

    I just want to run an in-house contest, just for paying local customers. I don't need anyone else involved, not the govt., nothing...how do I go about this? We want to offer an Iphone X as the prize.

    I've seen sites that flat-out disagree with one another..some say you manage the contest, you set the rules, don't have to award unless min. number of participants, etc. while some say no way to all of that. Very confusing.

    I live in California. What is the loophole here so I can run a sweepstakes/contest/raffle as an incentive for people to purchase from us?

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    Quote Originally Posted by grasshopper View Post
    Wanting to offer a contest for customers who purchase from us. Seemed simple at first.. buy a course from us and you are entered and prize will be drawn x/y/zzzz. In looking over contest rules with facebook, youtube, etc..it's rather vague. In looking at legal websites, they seem to imply that the Government is going to tell me how to run my business and not let me give things away to paying customers? Is that correct?

    I just want to run an in-house contest, just for paying local customers. I don't need anyone else involved, not the govt., nothing...how do I go about this? We want to offer an Iphone X as the prize.

    I've seen sites that flat-out disagree with one another..some say you manage the contest, you set the rules, don't have to award unless min. number of participants, etc. while some say no way to all of that. Very confusing.

    I live in California. What is the loophole here so I can run a sweepstakes/contest/raffle as an incentive for people to purchase from us?
    Very tricky,every state has its own regs. Mostly anything requiring a purchase is typically illegal, that's why you always see "no purchase required". It seems like govt intrusion but it really stems (as many regs do) from historic scams. You obviously need to check California laws. It is essentially gambling if there is a payment to participate, even a purchase of a product.

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    Yep, historic scams. How would you feel if you bought a raffle ticket hoping to possibly win some awesome prize, only to find out that the people selling the tickets never actually gave out a prize at all, just keeping all the proceeds for themselves? Or that the winner wasn't selected at random, the prize was given to the organizer's sister? You would probably feel cheated. You might even say, "There ought to be a law against this!" And thus the government is now in the business of regulating raffles.....

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    Reading your post Tallen made me laugh thinking about something that happened ages ago. We were doing a dealer trade show one time and had a prize we were raffling off. When it came time to pick the winner out of the box the name we pulled was a dealer that owed us a lot of money and was very past due with little hope of getting paid. We just did not feel good giving him the prize so we threw that one away and pulled another slip. The second slip was the same guy. So we pulled a third name and again it was the same guy. Finally on the forth name it was someone else. That past due guy had put about 50 entries in the box.
    Ray Badger, Turbo Technologies, Inc.
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    Quote Originally Posted by grasshopper View Post
    Wanting to offer a contest for customers who purchase from us. Seemed simple at first.. buy a course from us and you are entered and prize will be drawn x/y/zzzz. In looking over contest rules with facebook, youtube, etc..it's rather vague. In looking at legal websites, they seem to imply that the Government is going to tell me how to run my business and not let me give things away to paying customers? Is that correct?
    Not exactly. The government is going to protect the consumer from scams disguised as contests, so there are a few rules. Then each state has different rules to protect it's citizens.
    Quote Originally Posted by grasshopper View Post
    I just want to run an in-house contest, just for paying local customers. I don't need anyone else involved, not the govt., nothing...how do I go about this? We want to offer an Iphone X as the prize.
    If it's just local, in your state, then you only have one set of rules to worry about and be sure to make it clear that it's only open to residents of your state.

    Quote Originally Posted by grasshopper View Post
    I've seen sites that flat-out disagree with one another..some say you manage the contest, you set the rules, don't have to award unless min. number of participants, etc. while some say no way to all of that. Very confusing.
    Again, different states different rules. You just need to find the ones that pertain to yours. Just about every state requires that it be a true giveaway with no purchase necessary. That's not to say that you can't ASK that people sign up. This is usually the goal of most giveaways...to grow users, readers, social media followers, or mailing lists. But it can't be a prerequisite to entry. A plain entry must also be considered valid.

    I'm almost positive that you can't call it a contest or giveaway if a purchase is required to be entered.

    Quote Originally Posted by grasshopper View Post
    I live in California. What is the loophole here so I can run a sweepstakes/contest/raffle as an incentive for people to purchase from us?
    If you go looking for loopholes you will almost definitely fall into trouble. All it takes is one person to complain, and some consumers are very savvy about what the law is concerning offers and misleading representation.

    Found this from the CA Department of Consumer Affairs. Looks like a good place to start.


    • A sweepstakes is a game of chance requiring no purchase or any other payment in order to participate in the game.


    • The fact that you do not have to pay anything to be eligible for the prize is what makes a sweepstakes legal. If you send in an entry on a plain sheet of paper, it must be given the same chance of winning as an entry that includes a "proof of purchase".
    • Many people mistakenly believe that purchasing the product and checking the "Yes" box on the entry envelope will increase their odds of winning the prize. However, to be legal, each entry must be given the same chance of winning the prize, whether or not the entrant makes a purchase or checks the "yes" box.


    CONTESTS/SWEEPSTAKES/GIFTS/PRIZES - Consumer Wiki

    It doesn't appear that this is very hard to do, just that maybe it isn't what you assumed before you knew. I'm sure you can find a way to make this work for you.
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