AUJA – No Purchase Necessary?

March 31, 2014


Uncle John knows pretty much everything—and for when he doesn’t know, he heads into the dark recesses of his massive research library, or puts one of his many associates on the case. So go ahead: in the comments below, ask Uncle John anything. (And if we answer your question sometime, we’ll send you a free book!)

What does it mean when a company has a promotional contest, but the fine print says “no purchase necessary”? Can you really still win?

It’s the result of some pretty complicated federal broadcasting laws. For some reason, the Federal Communications Commission (FCC) has a clause called “the lottery law,” which states that federal lotteries are illegal. (Multi-state lotteries, like Powerball or Mega Millions are fine, because they are conducted in tandem by state lottery boards.)

When a company is giving a way a prize as a means to promote its brand—a Monopoly at McDonald’s contest, or “look under the cap and win” sweepstakes from Pepsi for example—it has to carefully obey these federal lottery/communication rules. There are three “questions” a company must answer if it wishes to broadcast or promote the contest on TV or the radio, a process the FCC calls “consideration”: is a prize being offered, is chance involved, does something have to be purchased to win the prize.

A promotional contest generally would have to answer “yes” to the first two questions, as prizes are offered and chance is involved in that a prize-winning entry might be picked at random from a large number of entries. It’s that third clause that’s the sticking point: Of course companies holding contests want consumers to buy something before they participate in the contest—it’s the whole point of the contest, after all. But if in the commercials for the contest the company states or writes on the screen “no purchase necessary,” then it no longer qualifies as a lottery. If you read more of the fine print, you’ll see that companies then provide an address where entrants who don’t want to purchase anything may send their name and address for contest consideration.