Have you ever glanced at the back of a Publishers Clearing House sweepstakes mailing? There are about 3,000 words in four-point type about liability, probability, and eligibility. Did you know that the laws that require that microprint apply to your book giveaways and contests as well?
Book giveaways and contests are subject to an array of technical laws on the federal and state level, something writers seem to forget in their ongoing battle against obscurity. Few know that asking someone to “like” you on Facebook, “follow” you on Twitter, or subscribe to your blog as a condition to entering a giveaway could subject them to substantial fines.
Book giveaways and contests basics
As far as I know, federal and state regulators have not cracked down on author or book giveaways. In case the situation changes, here are a few basics.
There are three types of promotions:
- A sweepstakes offers a prize based upon random selection. You may not charge a fee or ask for any “consideration of value.” (Remember that term “consideration of value.” I come back to that later.)
- A contest involves some test of skill, and you may charge a reasonable fee.
- A lottery awards a prize by random selection and charges a fee. Do not run anything that looks like a lottery. That’s illegal for anyone other than state lottery agencies or a non-profit running a raffle.
Most book giveaways, such as those on Goodreads, are sweepstakes because winners are chosen at random and without charge. They generate buzz and get your books into readers’ hands. I have run successful book giveaways on Goodreads myself.
If you want to run a giveaway on your own blog or social media site, here are a few basic rules to remember.
- Don’t ask for money. That will turn your giveaway into a illegal lottery.
- Don’t require “consideration of value.” In other words, don’t go too far in asking participants to like, retweet, post, subscribe, or sign up as a condition to entering the giveaway. Using an app such as Rafflecopter won’t protect you. According to their terms of service, Rafflecopter leaves it up to you, the Admin, to ensure compliance with laws.
- If you are using Kickstarter or other crowdfunding site, do not offer to give a copy of your book to a contributor chosen at random. That’s an illegal lottery. It’s better to offer a copy of your book to anyone contributing over a stated amount, such as $75.
What about contests?
Contests are different. If you are running a contest where skills are judged, then you may charge a reasonable amount to cover costs and prizes. Do not introduce any element of chance into your contest, such as “if there’s a tie, the winner will be chosen by the toss of a coin.” That converts your contest into an illegal lottery.
If you are running a giveaway contest, post your rules and procedures in easy-to-read language, including
- Who may enter. To avoid violating the laws of certain countries and states, limit your promotion to entrants in the United States who are at least 18 years old. If your contest is aimed toward children, comply with COPPA.
- How to enter. Keep it simple.
- When the giveaway or contest will begin and end.
- Selection process. The method or the criteria by which winners will be selected.
- Odds of winning. Include language such as “the odds of winning depends on the number of entries.”
- What happens to unclaimed prizes. What if you are giving away 20 copies but have only 15 entries? Consider donating the extras to your local library.
- Set limits. If your entrants are submitting content (stories, photos, etc.), say you have the discretion to eliminate any content you find defamatory, obscene, inappropriate, or potentially infringing.
- Say NO PURCHASE NECESSARY. VOID WHERE PROHIBITED. These words won’t take all the fun out of the promotion. Readers skim over them.
- If the value of the prize is $600 or more, you must deliver a 1099 MISC to the winner and the IRS.
- If the sum of your prizes exceeds $5,000, you may have to register in some states.
And, if you are running your promotion on Facebook, Twitter, or other social media sites, comply with their policies as well, which change frequently. They are often written in techie jargon that is worse than legal jargon. If you violate their rules, your account may be suspended or terminated.
To me, it makes the most sense to run your book giveaways on well-known book-community sites such as Goodreads. They already have the infrastructure (and legal eagles) to conduct a giveaway properly, not to mention millions of members and readers.
Author and University of Chicago Law School graduate, Helen Sedwick has represented small businesses and entrepreneurs for 30 years. Her self-published novel Coyote Winds has earned five-star reviews from ForeWord Reviews and is an IndieBRAG Medallion Honoree. Publisher’s Weekly lists her Self-Publisher’s Legal Handbook as one of the top five resource books for independent authors. Helen’s blog coaches writers on everything from saving on taxes to avoiding scams. For more information about Helen, check out her website at http://helensedwick.com
Penny here again. If you’d like to read more about doing book giveaways and contests using Goodreads, check out this post that explains their new program! You may also want to read about my essential checklist here.
Have you had any great experiences with book giveaways and contests or any feedback on the legal side of things? Please share in the comments!