If you are conducting a promotional competition, make sure it complies with the CPA

Mar 23, 2016 | 2015, News

If you are conducting a competition that falls within the meaning of “promotional competition” as defined by the Consumer Protection Act (CPA), you need to ensure that it complies with s 36 of the CPA and its Regulations.

The CPA describes promotional competitions as any competition, game, scheme, arrangement, system, plan or device for distributing prizes by lot or chance if it is conducted in the ordinary course of business for the purpose of promoting a producer, distributor, supplier, or association of any persons, or the sale of any goods or service.

Unlike the previous legal position under the Lotteries Act, participants in a promotional competition are no longer required to demonstrate any skill or ability before being awarded a prize. A prize may include a reward, gift, free good or service, price reduction or concession, enhancement of quantity of quality of goods or services, or other discounted or free thing. Competition promoters may not require participants to pay any consideration for entering the competition, other than the reasonable costs of posting or entering the competition via SMS. SMS entries are limited to a cost of R1.50.

If a competition does not comply with the CPA, it may be declared void and be investigated by the National Consumer Commission. It is therefore important that competition promoters familiarise themselves with the provisions of the CPA and its Regulations before conducting a promotional competition.