The Consumer Protection Act, No 68 of 2008 (herein after referred to as the “CPA”) has compelled owners to rethink the way they conduct their business.
The ease with which the public can be accessed through the use of social media makes the use of promotional competitions an attractive avenue from where companies can market their business and promote their products and services.
Section 36 of the CPA defines promotional competition as any competition, game, scheme, arrangement, system, plan or device for distributing prizes (a reward, gift, free good or service, price reduction or concession, enhancement of quantity or quality of goods or services, or other discounted or free thing) by a promoter (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) to participants (means a person who enters, competes in or is otherwise eligible to win a promotional competition, irrespective of whether a participant is required to demonstrate any skill or ability before being awarded a prize) by lot or chance if it is conducted in the ordinary course of business for the purpose of promoting a business, goods or services and exceeds the value of R1.00.
With this wide definition of a competition, businesses are compelled to consider the CPA when conducting promotional offerings and when drafting the necessary rules a promoter must:
and must not:
From the body of section 36 of the CPA it is clear that the purpose of these directives is to discourage scams and to encourage properly conducted promotional offerings. When preparing your promotional competition use this article in association with section 36 of the CPA to ensure that your offering complies with the necessary requirements.
Article written by Gerhard Truter during December 2013
Barnard Incorporated is a firm of attorneys situated in Centurion, Pretoria.
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