How Not To Run Afoul Of The Law When Running A Sweepstakes Or Promotion For Your Business

Drumming up new business these days can be hard, so many large and small companies alike will use promotional mailers and sweepstakes to get new business rolling in. However, if you're the owner of a small business, it's important to understand the legal limits you're under -- otherwise, you may soon find yourself in deep trouble.

The Deceptive Mail Prevention and Enforcement Act Sets the Limits

Transparency is key when you send out promotional mailings of any kind, including sweepstakes. Anything that can be construed as misleading -- whether it's a contest, sweepstakes, or promotion offering new services -- has to be clearly identified as such. This is a legal requirement that's been in place since the Deceptive Mail Prevention and Enforcement Act (DMPEA) was passed back in 2000. The DMPEA was designed to prevent people from falling for misleading mailers.

Despite the fact that the DMPEA is almost two decades old, small businesses routinely end up violating it. For example, at least four state attorney generals from around the nation are currently suing a Michigan company over mailers that have misled other small businesses into believing they were paying fees to government entities for paperwork that likely didn't need to be filed in the first place.

These Are the Basics You Need to Remember Before You Send a Mailer

To protect your interests -- and your business -- these are the things that you need to keep in mind about the rules applied by the DMPEA:

  1. The law applies to just about anything that you might promote through the U.S. Postal Service, including sweepstakes, contests, letters designed to resemble awards, facsimile checks, or letters made to look like official documents.
  2. There must be full disclosure about the nature of the mailer on the mailer itself in a conspicuous place. 
  3. The disclosure must be easy to notice, easy to read, and easy to understand. Plain language and clear print are advisable.
  4. If the mailer is a sweepstake, it cannot state the recipient is a winner unless they are actually a winner. 
  5. All sweepstakes have to include the message "no purchase necessary" and a notice that a purchase won't increase the recipient's odds of winning.

Violations of the DMPEA can result in private lawsuits against your business by consumers and governmental fines of up to $2 million -- so this definitely isn't something that you want to overlook! 

In addition to the federal rules imposed by the DMPEA, there may be state laws that you also have to follow regarding promotional mailings. That's why it's often wise to run your promotions by a business attorney before you begin.