Act now!

With the holidays coming up, I think this might be the year that I try out a promotion or giveaway to boost sales. Are there any legal requirements I should know about “Black Friday” promotions and sales?

Promotions and giveaways are a great way to encourage sales and bring in new customers. You must adhere to several important disclosure requirements if you offer an incentive to induce a potential customer to visit your location. “Incentive” includes any item or service of value, including prizes, gifts or money.

On the offer’s front or “first page,” you must include the name, address and a general description of your business and describe what you’re offering for sale. If your goal is to bring in potential customers so that you can make a sales pitch, you must disclose your intent on the first page.

The front should disclose the odds of receiving the incentive and any terms, restrictions and qualifications, including deadlines. If you would like to reserve your right to substitute an incentive item, you must include a statement that you reserve the right to provide a “rain check” or substitute.

Do not offer an item if you know, or could reasonably foresee, that you will not have enough of the item to meet the reasonably anticipated response to the offer. If you are concerned about running out of whatever item you’re giving away, it’s a good idea to have a rain check statement.

The key to proper promotions and giveaways is to never misrepresent the offer in any manner. Clearly describe the incentive, its value and odds of winning. Don’t misstate the offer’s eligible participant pool or that the recipient has been “selected” to receive a particular incentive.

Disclosures must be clear, conspicuous and intelligible. If you hide something in a six-point font, that’s not “conspicuous.”

Once the recipient has responded to the offer and has met the requirements, you must provide the incentive, unless it’s not available and the terms provide for a substitution or rain check. If you issue a rain check, you must provide the incentive to the recipient within 80 days, with no additional cost or obligation. If the item still isn’t available within that 80-day window, you can offer an item of equal or greater value within 30 days after the window’s expiration.

You may not require recipients to pay any money to participate. There is a very narrow exception to that rule in situations where a refundable deposit of $50 or less may be taken to reserve admission or availability for coupons or certificates.