ASA’s Pepsi decision shines the light on prize draws


21 November 2012

What happened?

A prize promotion on Pepsi packaging offered the chance to win £500 every hour by texting in the last 4 digits of a barcode.  The complaint, upheld by the ASA (the Advertising Standards Authority), came from a family that was told that although they had won many times, only one win would be honored.  Over the first six weeks of the promotional period, the family had entered over 11,000 times using slightly varying e-mail addresses, which equated to over 35 entries per draw. Pepsi said that it would have been unfair to other entrants to award prizes that were won via so-called “bulk entries”.

Key to this for Pepsi was that although they did not know the exact mechanism used to enter the promotion, it appeared to be automated in some way.  This, Pepsi said, meant the entries were in breach of the promotion’s terms & conditions which excluded “bulk entries”.  The ASA disagreed and said that the reference to “bulk entries” was likely to be interpreted as suggesting that entries generated automatically would not be accepted.  Here, it appeared that the complainant’s entries were made by individuals generating multiple e-mail addresses (and using a different email address per entry). Therefore, a significant condition of the promotion was not made sufficiently clear and the promotion not administered fairly.  The family were also notified that they had won prizes, which were subsequently withdrawn when the promoter discovered they had used those methods of entry.

So what?

This decision illustrates three important points when managing promotions:

First, that promotions and prize draws which make use of social media or technology are becoming increasingly complex to administer.  The days of simply needing to check that entrants have not photocopied a “money off” coupon and passed it off as an original, are long gone.  Pepsi clearly had a sophisticated arrangement in place to manage the promotion, but still got into difficulty.

Secondly, despite the complexity of promotional structures, the onus remains on promoters to make the mechanism for entry and winning absolutely clear, and to think ahead to possible pitfalls.  Particular care should be taken where cash prizes are being awarded as they can act as an added incentive for entrants to find loopholes in promotion rules.

Finally, although terms & conditions must be thorough (as this decision clearly illustrates) they must be easily understood by consumers – drowning them in legalese will just not do.

For more information, please contact:

Andrew Terry
Principal Associate
Tel: +44 (0)845 497 4828
Andrewterry@eversheds.com

Chloe Chittock
Associate
Tel: +44 (0)845 497 0633
Chloechittock@eversheds.com

 

Andrew Terry
Andrew Terry, Partner
e: AndrewTerry@eversheds.com
t: +44 207 919 4828
m: +44 791 911 2302