To settle charges that it conducted a misleading sweepstakes, supermarket chain A&P agreed to change its policies and pay $102,000 in fines to the state of New York.
The “A&P Frozen Food Month 2013 Sweepstakes” caught the eye of the state’s Attorney General when it failed to properly notify customers that they could enter without making a purchase. Customers who purchased more than $50 in frozen food products using a store loyalty card were entered in the sweepstakes, with winners receiving a $350 gift card.
But store circulars advertising the sweepstakes – which read “Every time your spending reaches $50 on frozen food, you’re automatically entered for a chance to WIN!” – notified customers they could enter through the mail without a purchase only in the fine print and the official rules were not posted in stores.
New York Attorney General Eric Schneiderman said the company had been cited for similar violations in 2004 and 2005. “Under New York state law, companies that conduct sweepstakes must play by the rules by providing a level playing field for consumers, including those who do not make a purchase,” he said in a press release about the case. “Today’s settlement ensures that A&P, which has previously ignored the law in this area, will provide an alternate method of entry which does not require a purchase and to fully inform consumers that no purchase is necessary to enter and win a sweepstakes.”
Schneiderman said $43,400 was available in prizes in New York stores, but that because of A&P’s failure to adequately disclose the alternate method of entry, “the vast majority” of entrants and winners were consumers who made an in-store purchase.
A&P promised to hire a compliance officer and increase the disclosure of rules when it runs sweepstakes, with new, larger language. The company will also include with “equal prominence” language about the alternative method of entry and will post the official rules in its stores.
Why it matters: Businesses that conduct sweepstakes should remember that providing an alternate form of entry and including it in the official rules is not enough. Customers must be made aware of the alternate entry, which should be advertised with “equal prominence” to the other methods of entry – like posting information in stores and educating store employees to explain options to customers – as A&P has now promised to do.