In the competitive business landscape, brands use contests and sweepstakes as effective tools to capture consumer attention and strengthen their market presence. These activities not only generate excitement and customer loyalty but also help brands stand out in a saturated market. However, their organization is subject to a regulatory framework designed to protect consumers and ensure transparency. This article provides an overview of the main regulations and requirements governing contests and sweepstakes in Argentina.
1. Commercial Loyalty Law: Prohibitions
Decree 274/2019 on Commercial Loyalty, in its Article 14, sets restrictions on promotions and sweepstakes related to the purchase of goods or services. Specifically:
- Prizes and gifts linked to purchases: It is prohibited to offer or deliver prizes or gifts directly or indirectly tied to the purchase of goods or services if such prizes are subject to chance.
- Contests and sweepstakes with purchase conditions: Organizing contests, competitions, or sweepstakes that require the purchase of a product or the contracting of a service as a condition for participation is not allowed.
- Redemption of packaging and conditioning: It is forbidden to offer money or goods in exchange for the return of packaging or other elements related to the sold product if the value given exceeds the real value of the recovered items.
These provisions ensure that consumers can participate in promotions without being forced to purchase a product or service, promoting fair competition and preventing aggressive marketing practices.
2. Decree 961/2017: Obligations for Organizers
Decree 961/2017 of the former Ministry of Production complements the commercial loyalty regulations and establishes specific requirements for the organization and promotion of contests and sweepstakes in Argentina. These obligations are essential to ensure that contests are conducted transparently and fairly:
- Participation Requirements:
To promote accessibility, organizers must provide the necessary participation elements (such as coupons or packaging) free of charge in at least one location per capital city and in towns with over 50,000 inhabitants. This must be available for at least four continuous hours on business days.
- Mandatory Consumer Information:
Organizers must provide detailed information at every point of sale for the promoted product or service. The required details include:
- Prizes: A complete list of prizes, specifying quantity, quality, or model.
- Winning Probability: Whenever possible, the mathematical probability of winning, or an estimated probability.
- Potential Expenses: Any costs the winner may incur when receiving the prize.
- Duration and Scope: Start and end dates of the promotion, as well as its geographic reach.
- Participation Requirements: A complete description of the requirements for participation.
- Awarding Mechanism: Details on the method used to allocate prizes.
- Result Announcement: Communication channels used to announce winners and prize distribution.
- Prize Delivery: Time and location where prizes will be handed over.
- Disposition of Unawarded Prizes: The procedure for handling prizes that are not claimed.
- Mandatory Phrase: “No Purchase Necessary”
To prevent misunderstandings, all advertisements must include the phrase “No purchase necessary”, ensuring that participation does not depend on purchasing a product or service.
- Post-Promotion Obligations
At the end of the promotion, organizers must publish the list of winners and the final disposition of unawarded prizes within ten business days. Additionally, they must retain a record of winners for at least three years.
3. Resolution 915-E/2017: Communication Requirements
Resolution 915-E/2017 of the former Secretariat of Commerce mandates that all information related to contests and sweepstakes be published on a website and/or provided through a toll-free phone line. This communication channel must be clearly stated in promotional materials, using legible typography appropriate for the medium used in the advertisement.
Conclusion
Contests and sweepstakes are powerful tools for brands to engage with their audience and strengthen their market presence. However, compliance with regulatory requirements is essential to avoid legal sanctions.
If you need legal guidance on designing contests and sweepstakes that fully comply with Argentine regulations, contact us.