Sales promotions are seen everywhere, money off, two for one offer, free items with certain orders, time limited offers, prize draws, or competitions. They are valuable marketing tools which can incentivise consumers to purchase a product, purchase more products or, to build/maintain brand awareness. Overall, they can drive up sales volumes. However, when offering a prize or price promotion you need to be aware of the requirements and restrictions of making such an offer under UK law.
The Consumer Protection from Unfair Trading Regulations 2008 prohibits certain practices regarding sales promotions. These are:
- A trader suggesting that it can sell a product at a certain price when it reasonably believes that it will not be able to supply that product. This is known as bait advertising.
- Claiming that a product will assist in winning games of chance.
- Advertising a competition or prize promotion without awarding the described prizes or a reasonable equivalent.
- A product cannot be described as free, without charge, or something similar, if the consumer must pay anything other than the unavoidable cost of responding to the promotion and the cost of delivery/collection of the product.
- Misleading a consumer that they have won, will win or, will win by doing a certain act, a prize or other comparable benefit when there is no prize or benefit or, the consumer has to take any action to claim the prize or benefit that incurs a cost.
Personal data can only be collected for a legitimate, specified purpose. The data collected must be relevant and necessary. Data must be accurate and kept up to date where necessary. Personal data that identifies the data subject must not be kept for longer than is necessary. The data subject must be informed of this period. Data must be processed securely. The data controller must be able to demonstrate compliance with data protection principles.
There are rules to follow when using personal data to publicly announce a prize winner. Currently promoters must publish or make available on request information that shows an award took place. Usually this is the surname and county of the prize winner and if applicable, their winning entry. The data subject must be made aware at the point of entry that their data may be published in this way. The prize winner must be given the opportunity to object to, or reduce the information published.
Compliance with the Privacy and Electronic Communications (EC Directive) Regulations 2003 is necessary when using electronic marketing. Consent is needed to carry out electronic marketing such as, text, email, picture/video messaging, some social networking messages and, automated calls/communications. Prior consent is required before passing on any data to third parties for marketing purposes. The use of any cookies will also require consent from the data subject. Consent should be sought at the point of data entry by the means of opt-in.
The Electronic Commerce (EC Directive) Regulations 2002 states that regarding online promotions, promoters must clearly identify any promotional offer. This includes any discount, gift or premium. Any conditions needed to qualify for the promotion must be easily accessible, presented clearly and unambiguously.
The main codes of practice that govern all sales promotions whether price or prize are:
- UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP code)
- Direct Marketing Association code of conduct (DMA Code)
In addition to the CAP code there is the Guidance for traders on Pricing Practices (GTPP).
Promoters should also consider the Equality Act 2010 to ensure any restrictions on who may enter a promotion do not fall foul of any of the protected characteristics.
It is important to note that currently the transition period for the UK’s exit from the EU ends on the 31 December 2020 unless it is extended. Laws around advertising and marketing could change in the future.
As you can see there are lots of things you must consider when offering a promotion to entice customers to your website. At Lawdit our Stay Legal service can ensure that your website is complying with the law.