Make Your Incentive Drawings Legal
Two things bugged me about the market research survey invitation I got from my alma mater. First, it was a mediocre three star survey that asked me a bunch of information they could easily have gotten from my LinkedIn profile. Second, it offered a chance to win a prize if I participated, and the effort was clearly illegal. They had no formalized rules or processes in place for me to enter without first “paying up” with my data and with a substantial investment of time.
When offering respondents incentives to participate in surveys, you have two choices. You can give each respondent who participates something tangible in exchange for completing the survey, like cash, gift cards, a donation to charity, priority access to a report of research findings, and so on. Or you can enter them into a randomized sweepstakes drawing for cash, gift cards, donations, etc.
But if you decide on the second option—entering them into a drawing—your effort is now subject to federal and state sweepstakes laws, which impose strict rules of operation. My alma mater ignored all of them, such as:
- Providing an easy means for anyone who is contacted to participate in the drawing even if they decide not to complete the survey
- Providing a written copy of the sweepstakes rules, including terms and conditions, eligibility, start and end dates, and other details specific to state laws in every state where respondents live (and in every country if any live abroad)
After a sweepstakes, you need to keep all entries and a list of winners for four years, and you need to provide the names of winners to others who submit a request in writing. Plus, you need to report to the IRS (along with the winners’ social security numbers) any payments or gifts valued at $600 or more.
There is more, and it is complicated, but not a huge deal because there are fulfillment companies who specialize in laying out all the documents and protocols one needs to make the effort legal. For a small fee, they do it all.
My alma mater and all good universities should know better than to take easily-avoidable legal risks with sweepstakes for surveys. The “brand consultancy” group they hired for the survey, claiming to know all about the ins and outs of market research, should have known better too.