Originally updated: 30 March 2022. An introduction to US prize promotion planning for international brands. Requirements vary by state and campaign; obtain a current legal review before launch.
If you are planning to run a giveaway in the United States, assess applicable US rules carefully to avoid creating an unlawful lottery.
How do Italian and US promotion rules differ?
The word ‘giveaway’ describes something offered free. In marketing, it is commonly used for a prize promotion.
This promotional approach became popular in the United States before spreading more widely.
Bloggers and YouTubers offered gifts to thank loyal fans and attract new followers.
Early Instagram giveaways included influencer ‘loop’ promotions, popularised around 2016, offering items from personal collections.
Instagram helped giveaways spread internationally, including Italy, where #giveaway gained particular visibility in summer 2019.
Prize desirability can support attention and sharing, but value alone does not determine campaign performance.
Planning a giveaway under US rules
US planning distinguishes three concepts:
- Sweepstakes: games of chance in which winners are selected randomly.
- Contests, promotions in which winners are selected on skill, such as an original photo or video responding to the promoter’s theme. These often involve user-generated content, as in photo contest.
- Lotteries: promotions combining prize, chance and consideration , which can create an unlawful private lottery. A purchase requirement therefore needs particular scrutiny.
These giveaway are subject to federal and state rules, with oversight that can involve theFederal Trade Commission, Federal Communications Commission, USPS and other authorities, depending on the promotion. Assess the actual requirements rather than assuming the mechanic is straightforward.
In the US, distinguish between a purchase-linked entry route and a purchase requirement. A sweepstakes must allow entry without a purchase; a purchase-linked route needs an appropriate free alternative. The entry method and conditions must be clearly explained in the official rules with a clear “NO PURCHASE NECESSARY” statement.
A nationwide sweepstakes or contest must address applicable state laws or clearly define geographic exclusions in its rules.
Check prize pool thresholds, which can trigger additional requirements such as:
- advance registration where applicable
- a bond or other required prize security
In New York , for example, certain qualifying games of chance with a total prize value above $5,000 require registration and a bond or qualifying trust account.
Skill-based contests have a different analysis because winner selection is not based on chance. Their requirements still need review.
What should US giveaway entry rules cover?
US giveaways need clear official rules setting out the relevant conditions and disclosures.
Define eligibility explicitly, including residence, age and any exclusions. Eligibility should follow the campaign and applicable laws, rather than assuming US citizenship is required.
Prizes can also create tax reporting obligations, including applicable IRS information returns. These concern prize payments, rather than registering the giveaway itself with the IRS.
Italy and the US: different frameworks
A US lawcontinues to apply to promotions regardless of wider circumstances. The original article discussed the growth of giveaways during the pandemic; that context should not be taken as a legal exemption.
During the early COVID-19 period, prominent US-based influencers publicised cash giveaways in exchange for social engagement and brand visibility.
By comparison, Italian giveaways operate under a dedicated prize promotion framework with administrative and technical requirements that affect launch planning.
More information on Italian prize promotions.
Breaches can also lead to penalties for failure to follow the applicable rules..
Nicole Pallado, a beauty influencer, reportedly requested likes and follows in return for a giveaway of a palette from her range in November 2021 and received a reported €10,000 fine.
The original article used this example to contrast markets. US promotions also carry legal obligations and potential liability, so a campaign that appears simple on social still needs review.
In the United States, brands, influencers, YouTubers and digital businesses may organise promotions subject to the applicable rules.
Commercial promotions can be used by businesses to promote their products and services.
The organiser must assess eligibility and comply with applicable federal and state law.
In Italy, the prize promotion framework defines which business entities may act as promoters. A private individual’s VAT registration alone does not establish eligibility.
For the Italian market, an influencer giveaway needs a specific assessment including whether any exemption for a low-value reward applies. Increasing profile visibility alone should not be treated as an automatic exemption.
Giveaway marketing objectives and benefits
Giveaway marketing can support several objectives:
- Increase engagement, awareness and followers;
- Strengthen loyalty among existing followers;
- Generate new leads;
- Bring traffic to your website;
- Promote an event;
- Introduce your products or services to a wider audience;
- Encourage newsletter sign-ups.
These objectives describe the potential benefits of a giveaway.
Actions required to enter
Social prize promotions typically offer a product or branded reward and ask participants to complete simple actions:
- Follow the profile;
- Leave a comment;
- Share content;
- Tag friends;
- Provide personal details and the required consent under applicable privacy rules.
Choosing social channels for a US giveaway
Our Social platforms considered for giveaways include Instagram, Facebook, TikTok and YouTube.
Whichever channel you choose, consider these planning principles:
- Define a specific objective;
- Choose your target audience;
- Define the contest type;
- Select a desirable, audience-relevant prize;
- Make launch content clear, complete and easy to understand, with strong imagery;
- Use a clear call to action explaining every required step;
- Prepare understandable official rules;
- Follow the chosen platform’s promotion guidelines;
- Address legal requirements;
- Promote the giveaway;
- Monitor the campaign and capture participant content and data through a giveaway management platform;
- Communicate winner information in accordance with the rules;
- Analyse results after the promotion.
