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In most North American jurisdictions, there are well established rules and regulations promotional contests must abide by. Most common of these include clearly stating the odds of winning, the process for selecting winners, detailed prize descriptions and publishing of winners names.
If you have run a contest, you are probably very familiar with these. If you haven't, do some homework or contact a promotional consultant or agency to help you through the process. Not following the rules can lead to hefty fines and some bad press.
But what about terms and conditions of the contest. How should these be handled?
From my experience, this is often a tricky part of the promotion. Restrictions or details of the promotion are often added by others outside the marketing department and at the last minute. For example, Finance will add restrictions to limit financial exposure, the legal department will want wording restrictions and senior management will provide advice on large contests. Frequently what seemed like a very simple concept begins to resemble the preverbial horse designed by a committee. It turns out to be a zebra.
So what? Why should this be a concern?
These additional terms or restrictions often add complexity to a contest. And can, on occasion, backfire turning positive results into a negative experience for the consumer. and can create a PR nightmare for the company..
The Toshiba World Cup promotion is a good example. In several European countries with teams competing at the World Cup, Toshiba ran a promotion offering to refund the purchase price for selected televisions and laptops if the home team won the World Cup. Great idea as it builds on the excitement and hype around the World Cup. And the contest stimulated increased sales.
Somewhere along the way, someone decided it was a good idea to add a deadline of June 17th to register the purchase eligible for refund. This was one week into the tournament but before all teams had actually played.
The problem? This restriction was not clearly publicized at point of sale. Apparently even on the contest website, this restriction was buried.
The result?
When Spanish purchasers tried to apply for their refund, they were refused as many registered after the cutoff date. And Toshiba has steadfastly refused to honour the refund requests even though it is clear the cutoff date was insufficiently publicized.
In Spain, the backlash against Toshiba has turned a positive promotion into a PR nightmare. The damage isn't contained to the Spanish market. Through social media channels, this story has been carried worldwide and forced Toshiba to dedicate time and resources to counter the negative press. It is likely, Toshiba's brand has been negatively impacted, at least for the short term. What a wasted opportunity over a seemingly small detail!
It is prudent and good business policy to add terms or conditions to a contest or promotion that limit financial exposure. But they need to be thought through carefully to ensure complexity isn't added or the attractiveness of the promotion diminished. Don't hide behind the conditions or use them to prevent awarding prizes or incentives. More importantly, if they are important enough to be added, make the effort to ensure consumers are made of aware of those that impact eligibility.
The problem with the Toshiba promotion wasn't that they had established a deadline for registering a purchase. Rather it was that it was hidden from the consumer and then used to justify not providing the refund. This approach antagonizes consumers which can quickly turn a positive promotion into a PR nightmare.
