Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

Can I offer contests that involve merchandise prizes in Texas? What are the requirements?

Here are the requirements for offering contests that involve merchandise prizes in Texas:

Requirements for Offering Contests in Texas

  1. Awarding Multiple Prizes: A person conducting a sweepstakes may not award multiple prizes in the sweepstakes unless all prizes are awarded on the same date and through the same selection process. [Tex. Bus. & Com. Section 622.108][1.1]
  2. Required Disclosures Relating to Prizes Generally: An offeror who notifies a person that the person has won a prize, will receive a prize, or has a chance to win or receive a prize shall, at the time of the notification, clearly and conspicuously disclose: (1) that attendance at a sales presentation is required; (2) the approximate duration of the sales presentation; and (3) a description of the product or service being sold. [Tex. Bus. & Com. Section 621.102][1.2]
  3. Disclosure of Major Prizes and Winners on Request: A person who conducts a contest shall, at the end of the contest period, provide to any person who requests the information: (1) the names of all major prize winners; and (2) the prizes won by each winner. [Tex. Bus. & Com. Section 621.204][1.3]
  4. Restrictions on Prizes: The value of a prize offered or awarded at a raffle that is purchased by the organization or for which the organization provides any consideration may not exceed $75,000, except for a residential dwelling which may not exceed $250,000. [Tex. Occ. Section 2002.056][2.1]
  5. Required Records for Contests Other Than Drawings: For each contest other than a drawing, the offeror shall maintain until the second anniversary of the date the last prize was awarded: (1) records of the identity and address of each person who is responsible for developing, creating, sponsoring, or implementing any part of the advertising plan or program; (2) records that show that the winning numbers have been deposited in the mail or otherwise made available to recipients in accordance with the odds statement provided under Section 621.104(a); (3) a copy of each contest solicitation; (4) records adequate to determine: (A) the name and address of each contestant; (B) the approximate date each contestant was sent the solicitation used in the contest; (C) the number of major prizes awarded; (D) the date each major prize was awarded; (E) the name, brand, type, model number, and manufacturer of each prize offered; (F) the method of computing the retail value of each prize; (G) the method of selecting major prize winners; (H) the name and address of each major prize winner; and (I) the facts on which each representation or disclosure made in connection with the contest was based and from which the validity of the representation or disclosure can be determined. [Tex. Bus. & Com. Section 621.202][1.4]
  6. Required Disclosures Relating to Matched Contest: A person who uses a matched contest shall clearly and conspicuously disclose in writing in the offer: (1) that attendance at a sales presentation is required; (2) the name and street address of the person who is soliciting attendance at a sales presentation; (3) a description of the product or service being sold; (4) each requirement, restriction, qualification, and other condition that must be satisfied for a person to enter the contest, including: (A) any deadline by which the person must visit the location or attend the sales presentation to qualify to receive a prize; and (B) the approximate duration of the sales presentation; (5) a statement of the odds of winning each prize offered, expressed as a ratio in Arabic numerals; (6) the geographical area or states in which the contest will be conducted; (7) the beginning and ending dates of the contest period; (8) the identity and address of each person responsible for awarding prizes; (9) that all unclaimed prizes will be awarded by a drawing and the date of the drawing; and (10) all other rules and terms of the contest. [Tex. Bus. & Com. Section 621.104][1.5]
  7. Requirements for Matched Contest: The identity and number of the major prizes to be awarded in a matched contest must be: (1) determined before the contest begins; and (2) disclosed on each entry form distributed. Each major prize identified on an entry form for a matched contest shall be awarded. [Tex. Bus. & Com. Section 621.103][1.6]
  8. Raincheck Requirements: If the response to an offer exceeds the number of gifts or major or minor prizes, as applicable, available at the sales location, the offeror, at the time of the visit or, if a sales presentation is required, at the conclusion of the sales presentation, shall tender to the recipient of the offer a raincheck for the gift or prize represented in the offer. Except as provided by Section 621.153(b), the offeror shall send that exact gift or prize to the recipient, without cost to the recipient, not later than the 14th day after the date the recipient visits the sales location or attends the sales presentation. [Tex. Bus. & Com. Section 621.152][1.7]
  9. Availability and Awarding of Gift or Prize: An offeror shall provide each gift as represented to each person who attends a sales presentation or award each prize as represented on the entry form to each person who presents a winning entry. An offeror shall have available at the sales location a sufficient quantity of each gift to meet the reasonable anticipated response to the offer or each prize to meet the reasonable anticipated number of prize winners. [Tex. Bus. & Com. Section 621.151][1.8]

Based on the above requirements, you can offer contests that involve merchandise prizes in Texas as long as you comply with the rules and regulations set forth by the state.

Source(s):
Jurisdiction

Texas