legal compliance. In this blog series, we explore key legal principles to help navigate promotional strategies as well as the main pitfalls. It is not an exhaustive overview of the rules but rather a guide to the main points to keep in mind.

This series will cover:

  1. Price reduction announcements: the legal framework and best practices
  2. Sales periods: rules, restrictions, and compliance
  3. Liquidation sales: when and how to legally conduct them
  4. “Buy One, Get One Free? ” The legal do’s and don’ts of joint offers
  5. Promotional contests: how to organise them without legal risks
  6. Coupons and vouchers: don’t forget the required information
  7. Gift cards: legal considerations and recommendations

Professional legal support is highly recommended when running promotional actions, whether for examining envisaged promotional actions, validating advertising material or drafting the applicable general terms and conditions. Indeed the Economic Inspection keeps a close watch and can impose heavy penalties on retailers failing to comply with the rules.

Part 5 – Promotional contests: how to organise them without legal risks

This fifth part of our “Retail promotions & pricing: legal essentials for businesses” series presents best practice in joint offers.

Retailers organise numerous games and contests in-store, on their websites and on social networks. Some of the most common practices do not strictly comply with Belgian law. Even if penalties are rare, it is worth following the few rules, especially as they are not so cumbersome.

What are the authorised promotional contests?

Retailers are allowed to organise contests, games and other promotional actions in which the participants have an active role and the results will be influenced by their physical, artistic or intellectual capacities. Chance is not totally excluded but cannot play a preponderant role in determining the winner.

Retailers are not allowed to organise lotteries and tombolas, where the winners are determined solely by chance.

Retailers are not allowed to organise games of chance that meet the following 3 conditions:

VThere is a game: the participants have an active role;

Chance plays a major role in determining the winner;

There is a stake: the participants have to pay a price to participate and risk either losing that price amount or winning a prize. The notion of a stake is controversial and not easy to define. Even if participation seems free, it is never excluded that there could be some kind of a stake (such as a payment with the data or with the image rights, products giving access to the contest sold at different/superior prices, etc.).

  • There is a game: the participants have an active role;
  • Chance plays a major role in determining the winner;
  • There is a stake: the participants have to pay a price to participate and risk either losing that price amount or winning a prize. The notion of a stake is controversial and not easy to define. Even if participation seems free, it is never excluded that there could be some kind of a stake (such as a payment with the data or with the image rights, products giving access to the contest sold at different/superior prices, etc.).

The only option for retailers wishing to be involved in lotteries and games of chance is to entrust their organisation to an association/non-profit organisation, as the law permits exemptions under certain conditions for associations/non-profit organisations.

What type of contest to organise?

There are many possible ways to organise a contest, as long as it does not qualify as a lottery or a game of chance. Contests can take various forms, such as games, quizzes, or asking participants to post original comments on social media.

The key factors are that participants must make a certain effort and that the winners are determined based on merit, not chance. Therefore, a simple random draw is not acceptable, as it does not differentiate participants based on their input or performance.

If it is not possible to determine the winners on an objective basis, for example in the context of a subjective contest (such as “the most beautiful photo” or “the funniest comment”), then the method of determining the winner must be clearly defined (for example, by an independent jury based on defined criteria).

What are the general rules to be complied with?

Contests must be organised and operated in a transparent and fair manner so as not to constitute unfair commercial practices (i.e. B2C and B2B misleading or aggressive commercial practices). The list of prohibited commercial practices includes, for example, the prohibition on stating, in the context of a commercial practice, that a contest is being held or that a prize may be won without awarding the prize described or a reasonable equivalent.

Contests or promotional games must be clearly identifiable as such and their conditions of participation must be easily accessible and presented in a precise and unambiguous manner.

Contests must comply with privacy and data protection laws, both for the promotion and the running of the contest. The retailer’s privacy policy informing participants about the processing of their personal data in the context of the contest must be made clearly and be easily accessible to the participants.

For contests on social networks, retailers must also take account of any rules imposed by the platform in its terms of use.

Are general conditions required?

Although it is not mandatory, it is strongly recommended that general terms and conditions are drafted and accessible to the participants.

It is essential to set out the terms and conditions for taking part and choosing the winners, as well as aspects relating to the retailer’s liability, IP rights, handling queries and complaints, etc.

Conclusion

Contests are very popular with retailers. However, it is advisable to avoid simply imitating or copying the practices observed by competitors, as many contest formulas do not strictly comply with the law. Even if the controls and penalties seem currently to be fairly limited, it is advisable to ensure that both the contest formula and the promotional material and rules comply with Belgian law.