Many businesses offer gifts or prizes as a way of attracting new customers and rewarding existing customer loyalty. Offers such as competitions and loyalty schemes can be rewarding for both you and your customers. But such promotions must be run fairly.
There are laws governing special offers and competitions in NSW. The NSW Office of Liquor, Gaming and Racing is responsible for approving trade lotteries and games of chance. NSW Fair Trading also looks at competitions or offers where businesses have no intention of offering anything. This is an offence under the Australian Consumer Law (ACL).
When making these offers, the trader’s obligations include:
Where these offers relate to the sale of a motor vehicle, the Motor Traders Association (MTA) Code of Ethics states that an MTA licensed dealer will not offer, in an advertisement, any free gifts or substantially discounted goods (such as televisions, DVDs, holidays, etc. not related directly to the supply of motor vehicles) which are intended to or could act as an inducement to a prospective purchaser of motor vehicles from that dealer.
To run a trade promotion lottery, that is a competition which promotes the sale of your goods or services and which offers a chance to win a prize, you will need to get a permit from NSW Office of Liquor, Gaming and Racing. Application fees for permits range in cost from $125 to $2,100 depending on the value of the prize or money you will be giving away. However you can save $50 on an application fee by applying online at www.licence.nsw.gov.au In order to obtain a permit you must complete an application and provide certain information. Check with the NSW Office of Liquor, Gaming and Racing for requirements.
Visit the NSW Office of Liquor, Gaming and Racing website at www.olgr.nsw.gov.au or contact them on 9995 0300 for fact sheets and permit applications.
Under the law the Director-General can require a person to provide proof of claims made in promotion of products and services.
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