Are you running a Contest, a Giveaway, or a Sweepstakes?

*This article outlines regulations specific to the United States; to use for general information purposes and is not intended as legal advice.*

Do you know if you’re running a contest, giveaway, sweepstakes, or lottery?

Trick question.

Did you notice the verbiage faux pas? It happens quite frequently.

“Giveaway” actually is the umbrella term for describing either a contest or sweepstakes. So, we’re taking steps to eliminate confusion, especially for our clients, by announcing that our “Contests + Giveaways” Campaign will now simply be, “Giveaways”.

With that part out of the way, let’s get down to the technicalities of each giveaway to further eradicate confusion.


When arriving on a brand's website around the holidays, you’re likely to come across a giveaway or three. These few months of increased site traffic and elevated spending will have visitors seeking the opportunity to gain something for “free”, based on simple exchanges such as an email address, or a ‘like’ on social. If brands are smart, they’ll take fully capitalize on this opportunity.

However, before venturing down the promotional road this holiday season, marketers should have an understanding of the type of promotion they’re running on their site.

So now that we know that “giveaways” is the blanket term for contests, sweepstakes, and lotteries, let’s lay out the details of each category.

  • Lotteries: Prize drawings in which a participant must pay to be eligible to win. Examples of such are Mega Millions and Powerball.
  • Contests: Based on some merit/skill. The deciding factor of the winner is based on competition. It is legal to charge an entrance fee since the winner is not chosen by chance.
  • Sweepstakes: Prize giveaways where winners are chosen from luck of the draw. Extremely important to keep money making possibilities out of sweepstakes -- this puts your promotion at risk of becoming an illegal lottery.

Wait, but how can I tell if I’m running a lottery, sweepstakes, or contest?

  • The prize is value-laden
  • Chance dictates the winner
  • An element of consideration (defined through a monetary contribution or social following (non-monetary contribution)).

I am running a Lottery.

*Note: The US has strict laws against private lotteries, making them illegal. Typically, only carried out by government agencies.*

  • The prize is value-laden
  • Chance dictates the winner
  • Don't have to play

I am running a Sweepstakes.

  • The prize is value-laden
  • Skill or merit dictates the winner. Or by voting. 
  • Don't have to pay to play

I am running a Contest.

Hosting a giveaway is beneficial for increasing social following and/or brand awareness. Often times this means asking for personal information, or sometimes a “follow” on Twitter, or a “like” on Facebook. These are examples of non-monetary contribution for consideration, which we know then defines a promotion as a lottery.

Instead, ask for participants to engage with your brand. It is acceptable to tie additional entries for your giveaway with social engagement (defined by hashtags, commenting on status’, or discussions on a fan page), therefore boosting your social standing without directly asking for these interactions for consideration. 

Before choosing a giveaway to run on-site, marketers should have an idea of the level of effort their team wants to put forth this holiday season (or off-season for that matter; giveaways work year-round). A keen understanding of the laws specific to each giveaway is a necessity as well, to avoid confusion and the chance of hosting an illegal giveaway.

Want to know how Giveaways with AddShoppers can boost your ARPV this holiday season? Talk to us!

 

*Again, this article outlines regulations specific to the United States; to use for general information purposes and is not intended as legal advice.*