Thread: Internet law question

I am reading a book right now about internet income, and in it the author made mention about cash awards to randomly selected members of his site for participating in a survey type thing he did.

My question is that I thought giving out cash awards was against the law according to some sources that I have read, so I thought I would ask here, is cash awards legal or illegal? Wouldn't this fall under a type of lottery?

I suggest you talk to an attorney on this one - and get the right answer.

Originally Posted by Vaynloc

I am reading a book right now about internet income, and in it the author made mention about cash awards to randomly selected members of his site for participating in a survey type thing he did.

My question is that I thought giving out cash awards was against the law according to some sources that I have read, so I thought I would ask here, is cash awards legal or illegal? Wouldn't this fall under a type of lottery?

YES.

If you can recall, there are many sites that actually employ services (i.e. BizRate) to conduct "surverys" of visitors and customers alike (can make no differentiation, must include both: "No Purchase Required") for everything from site layout, features ranking, and transaction satisfaction tracking.....each of these types may or may not include an "offer" such as a discount applicable for further purchases, a "free" tangible gift (non-monetary), or even a progressive recognition, but never money or "means of conveyance" (i.e. a Visa gift card, redeemable/cash value coupon, etc.).

You can, however, create a "giveaway" (which is different than a lottery) where you put all the names of those who completed a survey in a given month (again, no purchase required), and you draw a "winner"....and here it can be tricky: in lieu of cash or "conveyance", you can offer a coupon or certificate that can be applied wholly for a product or service offered, as this satisfies the criteria of Discount rather than Transaction.....you are discounting a product or service to $0.00 on "behalf of" the consumer with the Cert/coupon as the "allowance"......do you follow??

You will, however, need to consult with your legal advisor to review any Rules and Conditions you will need to compose for any of your proposed "Contests" or "Giveaways" to assure full compliance in your particular case, which you are required to publish online.

When in doubt, ALWAYS seek qualified legal counsel.

O.K. thanks for the answers as you all have mentioned my best bet is to consult legal counsel. I was just wondering how it worked if I had subscribed(paying) members on a website then made an offer say to promote something that in the end would be a cash award for some of the members. Vasili, I think I understand what you were talking about when you said "you can offer a coupon or certificate that can be applied wholly for a product or service offered, as this satisfies the criteria of Discount rather than Transaction.....you are discounting a product or service to $0.00 on "behalf of" the consumer with the Cert/coupon as the "allowance"......do you follow??" If you make it to be discount rather than transaction that makes it totally legal. But on the other hand, to just outright offer a cash award that may be crossing some legal boundaries, am I correct on my understanding?

Yes.

Offering cash in exchange for something tangible is a transaction, and in your case it would become "compensation" (which is in truth a "wage") for a service rendered. Enticements or solicitations for such "services or performances" for monetary exchange must be construed within Employment guidelines (classifieds, Monster.com, Contractual, etc.).

Offering a "Giveaway" keeps it an Award, something that must be clearly spelled out (how you award), but not restricted by any of the above considerations. Also, a giveaway is very different than a Contest, which may alternately be classified as a Lottery, depending on how it is structured.

(I have spent a lot on this subject: I am the one that gives away diamond wedding rings at all the bridal shows, and other prizes online for the last 6 years)

Email me for sample Rules and to continue this discussion....

E-mail has been sent

Answered......with a lot of reading to do Sir!
LOL