Every business wants to shake things up a bit to drive sales and attract more customers. What better way to make things a bit more exciting than with a direct mail sweepstakes or contest? Everyone likes winning, and receiving something free is almost always welcomed. Marketers have recognized the public’s affection for contests and sweepstakes, and have taken advantage of it to promote their products and services. However, marketers have to be careful. Sweepstakes and contests can definitely attract attention, but it may draw the attention of law enforcement instead of customers if done incorrectly! We don’t want that to happen to you, so we are going to go over the “Sweepstakes Law” aka the Deceptive Mail Prevention and Enforcement Act (DMPEA) that has been in effect since 2000. These are important rules to follow when planning a direct mail sweepstakes so you don’t deceive recipients or break federal law.
Legitimate companies and marketers have used sweepstakes to drive sales for years. While most companies run fair contests, a business can find themselves exposed to unwanted penalties due to laws they were unaware of. It is important to plan sweepstakes carefully so they follow applicable laws. Something as simple as the wording being off or failing to include all required disclosures on the mail piece could put your company in trouble.
According to the DMA, the DMPEA covers, “sweepstakes mailings, skill contests, facsimile checks, and mailings made to resemble government documents.” This law applies to any sweepstakes or contest that uses the United States Postal Service to advertise or promote. Violation of this law can lead to civil penalties by the USPS, including subpoenas, stop mail orders, and fines.
The DMPEA outlines what marketers can and can’t do when it comes to direct mail sweepstakes. One rule is that all disclosures that are legally required must be on the mailer, and these must be clearly and conspicuously displayed. These disclosures must also be “readily noticeable, readable and understandable” to the target audience, as stated in the DMPEA.
Here are some highlights of the DO’S and DON’TS of the DMPEA:
– All required disclosures must be “clear and conspicuous”
– All terms and conditions (i.e. rules and entry procedures) must be included
– Sweepstake/contest rules must include estimated odds of winning, estimated value and nature of each prize, and schedule of payments
– Mailings must include the name of the sponsor and their address or phone number for contact
– Company must remove recipient from sweepstakes mailing list if requested
– Sweepstakes must include the messages: “no purchase necessary” and “a purchase will not increase chances of winning”
– Don’t state that someone is a winner if they are not in fact a winner
– Don’t use contradictory statements
– Don’t refer to any federal agency, federal program, federal department, or the Postmaster/the Postmaster General in an attempt to make recipients believe that the mailing or offer is endorsed by this entity when it’s not
Penalties for breaking the DMPEA includes:
– Fines up to $2 million dollars per project
– An additional penalty fee of $1 million dollars if a cease-and-desist order is violated
– In addition, consumers have a private right of action to sue for failure to remove their names from sweepstakes mailing lists.
The DMPEA applies to any sweepstakes or contest that uses the USPS to advertise or implement a promotion. Make sure that you are aware of the state laws in every state that your campaign will be sent to. Most states have their own unique laws pertaining to sweepstakes and contests. New York has one of the strictest laws for marketing. Despite the fact that the law has been around for 15 years, many businesses are not aware of the DMPEA. Don’t get in trouble, and make sure to follow the DMPEA if your sweepstakes or contest uses direct mail. For additional direct mail marketing assistance, please contact US Data Corporation at (888) 578-3282.