3 Mistakes to Avoid When Running a Giveaway (Legally)

If you're running a giveaway on Instagram or elsewhere online, you must do it legally! Let's talk about the three biggest mistakes that I see when people are running giveaways on social media.

Mistake #1: Creating an Accidental Lottery

Okay, so the first big mistake is accidentally creating a lottery. What the heck do I mean by that? Well, giveaways can actually fall under sweepstakes, contests or lotteries. A contest is something that's judged based on criteria -- like the best answer to a question or the most creative "whatever," That's a contest, when you have to judge the winner. A lottery, on the other hand is against the law in a lot of states.

What is a "Lottery," and Why Is It a Problem?

To qualify as a lottery, you need a prize, you need chance -- in other words, luck; luck of the draw -- and you need "consideration." What does consideration mean? Consideration means that to enter, you give something of value. It might be an email address, it might be a purchase. Note that an email address is completely free, but still valuable. A lot of times you'll hear "no purchase necessary necessary to enter." That's because they're trying to avoid a lottery. If your contest is actually a lottery, like I said, it could be against the law in a lot of states. (Some states consider lotteries to be gambling.)

Avoiding the Accidental Lottery

How do you avoid the accidental lottery? Well, you can make it into a pure contest, where you are judging people based on criteria -- like I said, the most creative "whatever." And you set out those criteria in your giveaway rules. OR, you give someone a totally free way to enter that doesn't involve giving something of value. Tagging someone in the comments is an example. Another example? I ran a giveaway a couple weeks ago, and in my official rules, I said that you could enter either by filling out a survey, or by emailing me with the subject line "giveaway," and that would count as an entry. Now, of course, you can give weight to different ways to enter. So, "you get five entries if you do this, you get one entry if you do this, no multiple entries allowed" -- that type of thing.

Mistake #2: Not Having Giveaway Rules

You must, must must, must have giveaway rules in order to run a giveaway legally. You should also stick to those rules. Giveaway rules talk about things like how to enter, who's eligible, what the prize is and what it's worth, how the winner is chosen, how the winner is notified, and any other miscellaneous terms that are essential to your giveaway. For product-based prizes, you'll often see that Alaska and Hawaii are excluded because the person holding the giveaway wants to avoid paying those Alaska and Hawaii shipping fees. You'll also notice on Facebook and Instagram and many other social media networks that they require that you state that Facebook and Instagram or whoever is in no way affiliated with the giveaway.

Mistake #3: Not Adding the Proper Disclosures

Here's a mistake you might not think of. Not disclosing when you are getting something for free in exchange for running the giveaway. Yes, even a giveaway can cause a sponsored relationship that you need to disclose to your audience. If you are getting something for free or something of value in exchange for running this giveaway, you have to disclose that to your audience. You should disclose that in any posts.

Running a Giveaway Legally: In Summary

So again, wrapping all of this up. One, avoid an accidental lottery. Two, have some official giveaway rules. Three, disclose, disclose, disclose if you are getting some kind of benefit or freebie or something in exchange for running this giveaway.

Those are the three biggest mistakes that I see made when people are running giveaways.