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.
Guidelines For "Pin to Win" Contests
Striking the balance between an engaging and legally compliant contest can reward your business. If you decide to host a promotional contest or sweepstakes on Pinterest, please be sure to read its platform-specific rules governing promotions and contests. Pinterest has updated its guidelines on contests over the years. As of 2021, the following guidance is listed under the Pinterest Community Guidelines.
- "Don't require people to save a specific image. Give people the ability to choose pins based on their tastes and preferences, even if it's from a selection or a given website.
- Don't allow more than one entry per person.
- Don't suggest that Pinterest sponsors or endorses you or the promotion.
- Do review brand guidelines for general rules about using the Pinterest brand."
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.
How Not to "Pin to Win"
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.
Regulations Outside of Pinterest
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.
This post was originally published on December 18, 2014.
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