Competitions

A competition asks customers to do something to take part, such as answer a question, guess a number or design a label, for the chance to win a prize. Businesses publicise competitions on packaging, like a code printed inside a wrapper, or through advertising such as posters and social media posts. Entering usually means buying the product first, so the promotion is tied to a sale.

How competitions help a business

• Product awareness – eye-catching competition details on a pack or poster get shoppers talking about a product they might have walked past.
• More sales – if you need a code from the pack, you have to buy the product, and some customers buy several.
• Launching a new product – a prize gives shoppers a reason to try something unfamiliar.
• Contest entry data – entry forms can collect names, emails and phone numbers, building a list for future offers with entrants' consent.

Board Room, a skate shop, prints a code inside every box of its new helmets. Customers enter it online for a chance to win a £250 shopping spree. Shoppers notice the helmets, more boxes sell, and each code gives the shop a contact for its next promotion.

The drawbacks

A competition only attracts entries if the prize is worth having. A sticker pack will not persuade many people, so businesses offer something big – a holiday, a games console or a year's supply of the product – and that prize is a real cost. Running it also takes time: staff must write terms and conditions, pick the winner and contact them.

Staying within the law

Competitions must not break gambling law. If the winner depends purely on chance and customers pay to enter, it can count as a lottery and may need a licence, so businesses usually make the result depend on skill, such as answering a question correctly, or allow free entry. Prizes must be given out exactly as promised, with clear closing dates, and entry data must be stored and used lawfully. Ethically, a business should be honest about the odds and avoid pressuring children to enter.