Promotional contests can be an effective way to market a product or advance a business objective. However, any business running them needs to comply with the law, as well as provide all required disclosures and follow the applicable guidelines.
A promotional contest is any contest, lottery, or game where a business or influencer gives away a product or benefit through chance, skill, or a combination of both.
What to keep in mind when running a contest:
- Disclose the approximate value and number of prizes. Estimate the fair market value of the prize. If making an estimate is challenging, offering a few representative examples or a range of potential values of the prize is sufficient to meet the requirement.
- Any regional allocation of prizes? Make that known. If prizes are awarded by region, for example, one for participants in the Atlantic Provinces and another for those in Québec, while the contest is advertised nationally, any regional allocation should be clearly disclosed.
- Disclose all the information that affects the chance of winning. Anything within your knowledge that materially affects the chances of winning should be disclosed. For example, in a contest where winning coupons are packed in specially marked containers and the total number of these is known, this fact should be disclosed.
- Prominently disclose if a purchase is necessary. Although some laws may restrict it, the Competition Act does not forbid requiring a purchase to enter a contest. Our position is that participants should be able to access contest information without having to make a purchase.
- Avoid causing unnecessary delays in prize distribution. Distribute the prize within a reasonable period of time. This could be as simple as having the winner’s contact information to ensure the prizes are delivered in a timely manner.
- Consider how the winners will be picked. Selection of participants, or distribution of prizes, must be done either on the basis of skill or randomly.
- Make the information accessible. The information you are required to provide needs to be easily accessible for participants. They should not have to visit a store, make a purchase, tamper with a product, or provide their personal information to get it.
And remember, whether you’re promoting a contest, a product or a service, your claims should not be false or misleading.
Understand the different regulations and laws
In addition to complying with the Competition Act, contests taking place in Canada must follow other federal and provincial legislations and local by-laws. For more details, you can consult our guidelines on promotional contests.
Report deceptive marketing practices
The Competition Bureau aims to prevent deceptive marketing practices and ensure consumers have accurate information so they can make informed purchasing decisions. We encourage anyone with information about a potential false or misleading marketing activity to report it to us.