Buzz
You’ll spot them in stores, across social media, and in magazines. Win a vacation to Orlando! No purchase needed! Restrictions apply! Not liable for lost or stolen entries! Must be 18 or older!
With so many legal clauses, does anyone actually have a shot at winning? It might depend on whether you're entering a contest or a sweepstakes. Though these terms are often used interchangeably, there's a significant distinction between them—and misunderstanding that could lead to costly mistakes if you're handling the promotion.
In simple terms: contests involve a competition where entries are judged based on skill, while sweepstakes winners are selected randomly. In a contest, you could be judged on an essay, a cheesecake recipe, or a creative design. A group of judges assesses your submission according to the established rules and criteria.
In a sweepstakes, chance replaces skill. Every entry gets an equal shot, tossed into a random draw. Publishers Clearing House doesn’t ask you to pen a poem to win the grand prize; they simply select a winner from the crowd.
Here's where it gets a little complex. Depending on state and federal laws, charging an entry fee for a sweepstakes could turn it into an illegal lottery—unless it's sanctioned by a state government. (This is why they use the “no purchase necessary” disclaimer.) Contests, however, can charge an entry fee, as they involve an element of skill.
You might assume that large-scale giveaway sponsors would understand the difference, but that's not always the case. In 2006, CVS pharmacy had to pay $152,000 in civil penalties in New York for promoting a “sweepstakes” that automatically entered customers who bought Nicorette gum; they failed to offer the promotion to those who didn’t make a purchase.
