Skill-testing questions: Do you know the answer?

January 30, 2012 - Tags: Marketing Regulations

Contests and giveaways are a great way to attract new customers and advertise your business. Before you start spreading the word about your prizes, there are a few regulations you need to be aware of.

What information do you need to provide?

The Promotional Contest Provision of the Competition Act requires you to disclose information about the prizes and chance of winning to contest participants. This includes:

  • Number and value of prizes
  • Regional allocation
  • Chances of winning
  • Series of prizes over specific timeframes
  • Closing date
  • Start date if you are offering early-bird prizes
  • Any skill-testing questions
  • Any other contest rules that could influence the chance of winning

You need to display this information clearly, for example on the outside of the product packaging or via an obvious in-store display.

No purchase necessary

The Criminal Code does not allow contests that involve an element of chance unless an element of skill is included. A simple skill-testing question is often used to meet that requirement, but you can use other methods too.

The “prize” for non-compliance

If you host a promotional contest for your business that breaks the rules outlined in the Competition Act and the Criminal Code, the penalties include publishing corrective notices, paying fines, and jail terms of up to 2 years. If you are unsure whether your contest meets the rules, you can discuss it with your lawyer or contact the Competition Bureau for a written opinion.

What about provincial and territorial requirements?

The requirements in the Competition Act and the Criminal Code only cover the federal government requirements relating to promotional contests. The provinces and territories where you are running your contest may have additional requirements.

Check out our section on Marketing, advertising and sales regulations to find out about other rules that you need to know.

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