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Can I offer contests that involve non-cash prizes in Texas? What are the requirements?

Here is your answer:

Yes, you can offer contests that involve non-cash prizes in Texas. However, there are certain requirements that you must follow.

Requirements for contests other than drawings [3.1]

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:
  • The name and address of each contestant.
  • The approximate date each contestant was sent the solicitation used in the contest.
  • The number of major prizes awarded.
  • The date each major prize was awarded.
  • The name, brand, type, model number, and manufacturer of each prize offered.
  • The method of computing the retail value of each prize.
  • The method of selecting major prize winners.
  • The name and address of each major prize winner.
  • 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.

Postal receipt records, affidavits of mailing, and a list of winners or recipients of the major prizes satisfy the requirements of Subsection (a)(2).

Restrictions on prizes [2.1]

A prize offered or awarded at a raffle may not be money. Except as provided by Subsections (b-1) and (c), 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. The value of a residential dwelling offered or awarded as a prize at a raffle that is purchased by the organization or for which the organization provides any consideration may not exceed $250,000. A raffle prize may consist of one or more tickets in the state lottery authorized by Chapter 466, Government Code, with a face value of $75,000 or less, without regard to whether a prize in the lottery game to which the ticket or tickets relate exceeds $75,000.

Conditioning prize on purchase prohibited [4.3]

An offeror may not notify a person that the person has won a prize, will receive a prize, or has a chance to win or receive a prize if the receipt of the prize is conditioned on the person purchasing a good or service unrelated to the prize.

Conditioning prize on payment of consideration, charge, or expense prohibited; exceptions [4.4]

Except as provided by Subsection (b), an offeror may not notify a person that the person has won a prize, will receive a prize, or has a chance to win or receive a prize if the receipt of the prize is conditioned on the person paying consideration of any kind, paying a charge, or incurring an expense. An offeror may notify a person that the person has won a prize, will receive a prize, or has a chance to receive a prize that is conditioned on the person paying:

  1. Expenses incurred for travel to and from the sales location; or
  2. A refundable deposit authorized under Section 621.006.

Therefore, you can offer contests that involve non-cash prizes in Texas, but you must follow the requirements mentioned above.

Source(s):
Jurisdiction

Texas