Legal Briefing: Covid-19 prize update
Mani Roberts, Regulatory Affairs Manager at The IPM
27 March 2020
The Covid-19 crisis has significantly impacted the promotional marketing sector with many activations affected by the current situation. Complying with the code has become more complex but remains a requirement and acting fairly at this time will reduce the possibility of negative PR and ASA complaint.
Cancelling a promotion is a major breach of the rules so promoters and agencies must endeavour to work with entrants and winners to find solutions that satisfy all parties. This may require changes to the prize as described in the accompanying terms:
- For holiday and travel prizes extending the valid travel periods or postponing the travel dates to such a time that it’s safe to travel will reduce risk.
- For event prizes such as sporting events and festivals the most effective solution would be to offer tickets to the next edition of the event where possible.
- For prizes with an accompanying validity period such as a voucher or entertainment pass extending the redemption period would be the safest option.
If promoters are unable to award the prize for a valid reason relating to the Coronavirus they must offer a prize of equal or greater value. An alternative prize may take different forms:
- A cash alternative could be offered. In circumstances where calculating the value of the prize will be complex such as specially curated winners experience, promoters should estimate a fair value of the prize and be able to provide a breakdown of their calculation if required.
- Merchandising or limited-edition items in the form of ‘goody bags’ may be acceptable to winners.
- The nature of the alternative prize will be dependent on the brand to some degree so an alternate prize can take the form of a particular product or service they offer.
- Home entertainment prizes whilst government advice is to remain at home may also be acceptable.
Some promotions will not be affected by Covid-19 and it could be damaging to amend a promotion due to the virus when it is possible to abide by the original terms. An example would be prizes that require physical delivery such as an item of furniture or a special-edition fashion item. If the virus affects the delivery timeframe winners must be kept informed of any changes.
In any communication with entrants and winners, it’s recommended that promoters remind them of the fluid nature of the situation and that further changes may be required dependent on how the virus evolves but that they’ll aim to avoid any disappointment. If promoters work with winners to find solutions and follow the original terms as much as possible it will reduce the risk of ASA involvement and negative media coverage both now and in the future.