A trade promotion is a way of promoting a business. It involves a person receiving goods or services and obtaining something else in addition, for no extra cost.
It may be a condition of entry that goods or services must first be purchased in order to participate. For example, a person may buy a tin of paint and receive a free paint brush or entry into a draw to win a toolbox. Alternatively, a purchase may not be required to enter, for example, sampling a new ice cream flavour to enter a draw to win a dinner for two.
A trade promotion is different to a lottery. While both ensure the distribution of a prize by way of sale, gift or otherwise, a trade promotion involves the:
- promotion of a business; and
- cost of the goods or services not exceeding the prevailing market price for the item received.
You do not need a permit to conduct a trade promotion in Tasmania. Schemes for the promotion of business are excluded from the definition of a lottery in the Gaming Control Act 1993
and are therefore lawful in Tasmania, without a permit, even though it may be a condition of entry that goods or services must first be purchased in order to participate.
If making a purchase is necessary to enter a trade promotion, the following conditions apply:
a) the cost of the goods or services must not exceed the prevailing market price; and
b) determination of the market price lies with the Commission.
If you are in any doubt as to whether the amount charged exceeds the market price, submit details to the Commission for determination. If it is determined that the amount being charged exceeds the market price of the goods or services, the scheme would be deemed a lottery and would be unlawful.
Contact us for more information or advice on how to run a trade promotion in Tasmania.
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