No Purchase Necessary Laws

Running a contest or giveaway is a cost-effective way to engage your audience, generate fresh leads, and drive meaningful actions.

Whenever you run a contest or giveaway, it is important to exercise caution and ensure you are complying with any relevant laws that may apply.

One of the most important regulations to be aware of when running a prize promotion is the No Purchase Necessary Law.

In this guide, we explain everything you need to know about No Purchase Necessary Laws and answer the most common questions.

We will cover:

• What Are No Purchase Necessary Laws?
• What Types of Prize Promotions Do No Purchase Necessary Laws Apply To?
• What Are the No Purchase Necessary Laws in My Country?

No Purchase Necessary Laws are legal requirements in some countries that prohibit chance-based prize promotions from requiring users to pay or make a purchase in order to participate.

These laws are designed to ensure fairness and to prevent prize promotions from being classified as illegal lotteries. While specific requirements vary by country, they generally apply when winners are selected randomly.

If you are running a giveaway, sweepstakes, or similar promotion:

1. You must not require participants to make a purchase to enter.
2. You must not improve a participant’s odds of winning if they make a purchase.

This means you can offer both paid and unpaid entry options, but paid entries cannot be the only path to participate.

In countries such as the United States, No Purchase Necessary Laws are built around the concept of “consideration”. This refers to the value a participant gives in exchange for the opportunity to win.

There are two types of consideration that may put your campaign at legal risk:

• Monetary consideration – Any requirement involving spending money, such as buying a product or paying an entry fee.
• Non-monetary consideration – Tasks requiring significant time or effort, such as lengthy forms, multiple store visits, or long videos. These can fall into a legal grey area depending on jurisdiction.

What qualifies as consideration varies by country:

• In the U.S., a product purchase is considered monetary consideration and triggers the need for a free entry option.
• In countries such as the U.K. or New Zealand, purchasing a product at normal retail price may not count as consideration unless there is a hidden markup or added cost.

In countries with No Purchase Necessary laws, you can include purchase-based entries only if you also provide a completely free way to enter.

This is known as an Alternate Method of Entry (AMOE) and ensures everyone has an equal chance to participate, regardless of purchase.

For your campaign, this means:

• You can offer entries for purchases, but you must also include a free entry option.
• You cannot give extra entries or better odds to people who buy.
• Purchase and non-purchase entries must have the same value and weight.

Common AMOE options include:

• Submitting an online form
• Sending an email
• Mailing in a postcard

Your AMOE should be easy to access, clearly communicated, and available for the full duration of the promotion.

Gleam detects a user’s location and only displays the free entry method where required by law, ensuring your Terms & Conditions remain compliant.

You can preview how this works in the demo below:

☝️ Click the “Terms & Conditions” tab in the widget to view the free entry alternative.

Our built-in AMOE is only shown where legally required, keeping the giveaway experience streamlined elsewhere.

👉 Check where AMOE is required by country 🌎

Lotteries and raffles are prize promotions where entrants pay to participate and winners are drawn randomly.

Businesses are typically prohibited from running these promotions, so it is important to ensure your campaigns do not meet the legal definition of a lottery or raffle.

A lottery is defined by three elements:

1. A prize of value
2. Winners chosen by chance
3. Required payment or consideration, with no free entry option

In the U.S.A. and many other countries, lotteries are generally illegal unless operated by the government.

Raffles are similar to lotteries, but:

1. A winner must be selected each time
2. They are usually restricted to non-profit organisations

Even then, permits or registrations are often required. For-profit businesses are generally not allowed to run raffles.

As a general rule, private businesses cannot run lotteries or raffles. To remain compliant, you must remove at least one of the defining elements:

• Do not require payment
• Offer a free Alternate Method of Entry
• Or run a skill-based contest

Games of chance, also called sweepstakes or giveaways, are legal when structured correctly.

A game of chance includes:

1. A prize of value
2. Random winner selection
3. No required purchase to enter

The absence of mandatory payment is what separates a legal sweepstakes from an illegal lottery.

If purchase-based entries are included, a Free Alternate Method of Entry is required in countries with No Purchase Necessary laws.

👉 Check AMOE requirements by country 🌎

Yes, but only in certain regions.

Countries with No Purchase Necessary laws:
Purchase-based entry is allowed only if a free alternative of equal value is offered.

Countries without these laws:
Purchase-only promotions may be allowed, but local regulations still apply.

Games of skill are promotions where winners are selected based on merit rather than chance.

These contests rely on judging, scoring, or voting instead of random selection.

Examples include:

• Photo or video submissions
• Short essays or captions
• Creative challenges
• Public voting contests

Because winners are not chosen randomly, these promotions are not classified as sweepstakes or lotteries.

Yes. Since winners are judged on merit, No Purchase Necessary laws generally do not apply.

You can:

• Require a purchase to enter
• Reward paying customers
• Combine purchase with creative entry steps

Just ensure winners are clearly selected based on merit.

No Purchase Necessary laws are designed to ensure chance-based promotions do not require a purchase unless a free entry option is offered.

Rules vary widely between countries and regions.

If your campaign targets countries not listed, avoid mandatory purchases or consult a legal advisor.

When using Gleam’s Competitions app, you can automatically include free entry methods where required.

Even where No Purchase Necessary laws apply, you can still run campaigns that drive:

• Engagement
• Email capture
• Social growth
• Referrals
• UGC
• Product discovery

With Gleam, you can incentivise actions such as mailing list signups, page visits, video views, sharing, reviews, and content submissions.