If you’re planning to launch a sweepstakes, you’ve probably heard about the “no purchase necessary” sweepstakes law that requires you allow all entrants to participate in your sweepstakes for free. That means that you can’t require customers to make a purchase in order to become eligible to win.
But what if you really don’t want to give away prizes to customers who haven’t purchased your product? Here is what you can do instead.
Why Does the “No Purchase Necessary” Law Exist?
The No Purchase Necessary or Enter to Win law, which is also known as the Lottery Law is federally enforced by the USPS, Federal Trade Commission (FTC), and the Federal Communications Commission (FCC).
The purpose is to prevent people from running an illegal lottery. A sweepstakes is considered as an illegal lottery if:
- the sweepstakes offers one or more prizes of value,
- winners are selected at random from a pool of entrants
- the entry to the sweepstakes requires a payment of money or some other form of consideration.
The word consideration applies to anything of value, both indirectly and directly, to the company, monetary or some other form of compensation.
No Purchase Necessary Clause in Official Rules
As a result, all legal sweepstakes are required to have a “no purchase necessary” clause written into the official rules. It’s also mandatory to provide the details of the free method of entry for the sweepstakes in order to alert customers that they have another option Alternative Method of Entry (AMOE) to enter a sweepstakes that doesn’t require the payment of money.
Do Legal “Purchase Required” Sweepstakes Exist?
The short answer is “no.” But you’ve probably seen a sweepstakes before that seemed to require a purchase, such as the ones that ask you to upload a receipt or purchase a product to get an in-package code needed to enter.
However, if you read the fine print, you’ll notice that in the sweepstakes rules, it mentions a free AMOE that doesn’t require any purchase. Typically, brands make this free method a mail-in entry, SMM, phone entry, or even a web entry form.
Another way that you can ensure that only customers are entered into your sweepstakes is to request a proof-of-purchase from your customers to be sent in with their sweepstakes entry. While you are not allowed to require the proof-of-purchase as the only means of a sweepstakes entry, you can request it to accompany a free sweepstakes entry.