Currently, there are billions of social media users who follow various brands to purchase products or receive giveaways.
People love gifts and giveaways, which motivate them to buy products or services.
According to one survey, around 132,000 users search for the keyword “giveaways” each month on Google. Similarly, around 7300 users search for giveaways on Instagram each month.
For brands, it is one way of marketing tactic to draw the attention of target audiences.
However, to work on the social media giveaways, brands need to consider the legal aspects involved in the process. I
f you are planning a giveaway for your audience, this article presents you with an insight into the legal requirements you need to consider.
What are Social Media Giveaways?
A social media giveaway is a promotional tactic where followers have the opportunity to win a free product or service by completing simple tasks such as following your account or liking a post.
These giveaways are widely used on platforms like Instagram, Facebook, and TikTok because they generate high engagement.
When executed effectively, a giveaway can spark conversations about your brand, expand your visibility, and offer followers an enjoyable reason to engage with your content.
Different Types of Social Media Giveaways
Before going ahead with the social media giveaways, it is important to understand their different types:
- Lottery: These involve three key elements – a prize, consideration, and chance. A classic example is purchasing a ticket for a chance to win a large sum in a state-run lottery. Running a true lottery on social media is not allowed, as these are strictly regulated and typically limited to government entities.
- Sweepstakes: Similar to lotteries in that winners are selected at random; sweepstakes differ in one key way – participants can enter without making a purchase or payment. This makes them a legal and popular option for online promotions.
- Contests: Unlike lotteries and sweepstakes, which rely on chance, contests are judged based on skill, creativity, or knowledge. Examples include photo competitions, cooking challenges, or trivia games.
8 Legal Considerations for Social Media Giveaways
Here are a few legal considerations you need to cover while offering social media giveaways to the audience.
Be Cautious of Product Claims
Does your brand sell a product that helps in curing health issues? Great!
But is it FDA approved and has proven results? Wellness brands, when offering social media giveaways in the form of free products, need to be cautious.
You want to generate excitement about your products or services without exaggerating or making claims that could be interpreted as medical assertions.
Use language like “supports” or “promotes” to keep your messaging compliant and demonstrate that you’re communicating responsibly.
Ensure Your Business is Registered
People trust businesses that are legally established.
When your company is legally recognized, especially as an LLC, you can be away from personal liability in case of any glitch.
An LLC also offers flexibility in management and is ideal for small to medium businesses looking to grow without complex corporate formalities.
For instance, if you are operating your business in Arizona and want to offer giveaways to the audience here, forming an LLC in Arizona with the right steps is the best idea.
Get professionals in consultation who help you to form an LLC with the right documentation and also with giveaways.
Comply with Instagram’s Giveaway Guidelines
Since Instagram currently has millions of active users and followers of most brands, running your contest or offering giveaways as per the guidelines is important.
Some of the key Instagram guidelines are:
- No Instagram affiliation: It’s essential to clearly state that your giveaway is not connected to Instagram in any official capacity. In each of the giveaways, mention, “This giveaway is in no way sponsored, endorsed, or administered by, or associated with, Instagram.
- Transparent rules and eligibility: Be sure to outline all official rules, including eligibility requirements like age or location restrictions.
- No incentives for engagement: Instagram discourages promotions that require users to perform specific actions (like liking, sharing, or following) as a condition for entry. Make sure your giveaway doesn’t hinge on these types of incentivized interactions.
Consider Local Legal Laws
Different countries have different legal laws for brands to run a business online and offer giveaways:
- Age restrictions: Many regions enforce minimum age requirements for entering contests and giveaways. In the United States, the legal age to participate is 18 years old.
- Geographical restrictions: Different areas may have permit requirements for running promotions. For a giveaway targeting an international audience, it’s important to ensure compliance with the laws of every country or region where entries are accepted.
Privacy Policy
Since the social media platform is involved in the giveaway process, there is a high chance of handling the privacy policy.
From Instagram to TikTok and Facebook, different platforms have their respective privacy policies. To keep things on track, here are a couple of things to consider-
- Ensure that the privacy policy covers data collection and safety.
- Inform participants if you are using their data for the giveaway.
Handling customer data with complete responsibility keeps your business running with legal compliance and helps build trust with the audience.
Including Disclosures for Sponsored Giveaways
This is important for social media influencers who want to gain an audience market by attaching themselves to brands.
For instance, if you want to be a fashion influencer and want to promote through giveaways, include disclosures for sponsorship.
In the US, the Federal Trade Commission (FTC) demands that influencers disclose complete information in the form of a disclosure or a hashtag like #ad or #sponsored.
As a beginner, it is key to have a complete guide on becoming a fashion influencer and also staying relevant.
Outlining Entry Requirements
Make sure you mention entry instructions.
Simple actions like asking users to “like,” “comment,” or “follow” on platforms such as Instagram, Facebook, or TikTok are generally safe, effective, and compliant with most platform guidelines.
Steer clear of entry methods that could violate rules or legal regulations, such as requiring a purchase or asking for restricted types of shares or tags that go against platform policies.
Mention about Terms and Conditions
Clearly outline your terms and conditions, including all rules, eligibility criteria, prize information, and instructions on how winners can claim their prizes.
Make sure this information is easily accessible: whether through a dedicated webpage, a link in your social media bio, or a pinned comment on the giveaway post.
Providing these details in writing not only adds professionalism to your giveaway but also ensures participants understand the guidelines.
Run Your Social Media Giveaways Legally Now
In this digital age, having a strong brand strategy is important, and one way is to offer giveaways that could attract the audience towards the brand.
However, working according to legal aspects is something that brands cannot ignore.
As an entrepreneur, creativity alone isn’t enough to stay in the market; it has to align well with legal compliance.
Before running your next giveaway, it’s wise to consult a legal professional to make sure all your bases are covered.
