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Consumer Protection Act, 2008 (Act No. 68 of 2008)

Chapter 2 : Fundamental Consumer Rights

Part E : Right to fair and responsible marketing

36. Promotional competitions



1) In this section—
a) ‘‘participant’’ means a person who enters, competes in or is otherwise eligible to win a promotional competition;
b) ‘‘prize’’ includes a reward, gift, free good or service, price reduction or concession, enhancement of quantity or quality of goods or services, or other discounted or free thing;
c) ‘‘promoter’’ means a person who directly or indirectly promotes, sponsors, organises or conducts a promotional competition, or for whose benefit such a competition is promoted, sponsored, organised or conducted; and
d) ‘‘promotional competition’’ means any competition, game, scheme, arrangement, system, plan or device for distributing prizes by lot or chance if—
i) it is conducted in the ordinary course of business for the purpose of promoting a producer, distributor, supplier, or association of any such persons, or the sale of any goods or services; and
ii) any prize offered exceeds the threshold prescribed in terms of subsection (11),

irrespective of whether a participant is required to demonstrate any skill or ability before being awarded a prize.


2) A person must not directly or indirectly inform another person that a participant has—
a) won a competition, if—
i) no competition has in fact been conducted;
ii) the person has not in fact won the competition;
iii) the prize for that competition is subject to a previously undisclosed condition; or
iv) the person is required to offer further consideration for the prize, after the results of the competition have been announced; or
b) a right to a prize—
i) to which the person does not in fact have a right;
ii) if the prize was generally available or offered to all similarly situated persons or class of persons; or
iii) if, before becoming eligible to receive the prize, the person is required to offer further consideration for the prize or to purchase any particular goods or services.


3) The promoter of a promotional competition—
a) must not require any consideration to be paid by or on behalf of any participant in the promotional competition, other than the reasonable costs of posting or otherwise transmitting an entry form or device;
b) must not award a prize in a competition to—
i) a winner of the competition if it is unlawful to supply those goods or services to that prize winner, but this subparagraph does not preclude awarding a prize to a person merely because that person’s right to possess or use the prize is or may be restricted or regulated by, or is otherwise subject to, any public regulation; or
ii) any person who is—
aa) a director, member, partner, employee or agent of, or consultant to the promoter or any other person who directly or indirectly controls or is controlled by, the promoter; or
bb) a supplier of goods or services in connection with that competition; and
c) must—
i) prepare competition rules before the beginning of the competition;
ii) make the competition rules available to the Commission and to any participant, on request and without cost; and
iii) retain a copy of the competition rules for the prescribed period after the end of the competition.


4) For greater certainty in applying subsection (3)(a), but without limiting the generality of that paragraph, a promoter must be regarded as having required or received consideration in respect of a promotional competition if—
a) a participant is required to pay any consideration, directly or indirectly, for the opportunity to participate in the promotional competition, for access to the competition or for any device by which a person may participate in the competition; or
b) participation in the promotional competition requires the purchase of any goods or services, and the price charged for those goods or services is more than the price, excluding discounts, ordinarily charged for those or similar goods or services without the opportunity of taking part in a promotional competition.


5) An offer to participate in a promotional competition must clearly state—
a) the benefit or competition to which the offer relates;
b) the steps required by a person to accept the offer or to participate in the competition;
c) the basis on which the results of the competition will be determined;
d) the closing date for the competition;
e) the medium through or by which the results of the competition will be made known; and
f) any person from whom, any place where, and any date and time on or at which—
i) a person may obtain a copy of the competition rules; and
ii) a successful participant may receive any prize.


6) The requirements of subsection (5) may be satisfied either—
a) directly on any medium through which a person participates in a promotional competition;
b) on a document accompanying any medium contemplated in paragraph (a); or
c) in any advertisement that—
i) is published during the time and throughout the area in which the promotional competition is conducted; and
ii) draws attention to and is clearly associated with the promotional competition.


7) The right to participate in a promotional competition is fully vested in a person immediately upon—
a) complying with any conditions that are required to earn that right; and
b) acquiring possession or control of the medium, if any, through which a person may participate in that promotional competition.


8) The right to any benefit or right conferred on a person as a result of that person’s participation in a promotional competition is fully vested immediately upon the determination of the results of the competition.


9) A right contemplated in subsection (7) or (8) must not be—
a) made subject to any further condition; or
b) contingent upon a person—
i) paying any consideration to the promoter for the prize; or
ii) satisfying any further requirements other than those stipulated in terms of subsection (5).


10) Section 35(5), read with the changes required by the context, applies equally in respect of any prize or right to a prize conferred on a person as a result of that person’s participation in a promotional competition.


11) The Minister may prescribe—
a) a monetary threshold for the purpose of excluding competitions with low value prizes from the definition of ‘‘promotional competition’’;
b) minimum standards and forms for keeping records associated with promotional competitions; and
c) audit and reporting requirements in respect of promotional competitions.