Promotional Competitions and the Law

If you are marketer or brand activator who uses promotional competitions or prize draws as a way of promoting in South Africa, you need to comply with the Consumer Protection Act (CPA) requirements in section 36 and Regulation 11. We can help you to run lawful promotional competitions. We also provide you with a checklist that you can use for each of your promotional competitions.

Are you a promoter?

If you are in any way involved with the running, promoting or sponsoring of a promotional competition, you are a promoter under the CPA. S36 of the CPA says that a promoter means a person who directly or indirectly promotes, sponsors, organises, or conducts a promotional competition, or for whose benefit such a competition is promoted, sponsored, organised or conducted. This means that if you are in any way involved with the running, promoting or sponsoring of a promotional competition, you are a promoter under the CPA.

What are Promotional Competitions?

A promotional competition is any competition, game, scheme, arrangement, system, plan or device for distributing prizes by lot or chance if:

• it is conducted in the ordinary course of business for the purpose of promoting a producer, distributor, supplier, or association of any such persons, or the sale of any goods or services; and
• any prize offered exceeds R1.00,

regardless of whether a participant is required to demonstrate any skill or ability before being awarded a prize.

A promotional competition is different to a lottery. Lotteries are regulated by the Lotteries Act and must not be confused with a promotional competition. Contact us if you are unsure about whether you are hosting a lottery, raffle, prize draw or promotional competition.

What do you need to do when running a promotional competition?

A promoter of a promotional competition must:

• prepare competition rules before the beginning of the competition;
• make the competition rules available to the Commission and to any participant, on request and without cost; and
• keep a copy of the competition rules for three years after the end of the competition.

A promoter must also give the participant an offer to participate which has to give the participant very specific information.

Auditing requirement under the CPA

The promoter must ensure that an independent accountant, registered auditor, attorney or advocate oversees and certifies the conducting of the competition and must report this through the promoter’s internal audit reporting or other appropriate validation or verification procedures.

How can we help you?

We can help you run your promotional competition in accordance with the law from start to finish by drafting all the necessary documents, auditing the competition and providing you with a report that certifies that your competition complies with the CPA. If you’re interested, you can read about our solutions.