No Purchase Necessary Laws

Running a contest or giveaway is a brilliant (and surprisingly cost-effective) way to engage your audience, generate fresh leads and drive a ton of meaningful actions.

Any time you run a contest or giveaway, it is important to exercise a degree of 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 will walk you through 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 in place to ensure fairness and avoid transforming prize campaigns into illegal lotteries. While specific requirements vary by country, they generally state that if you are running a giveaway, sweepstakes, or other prize promotion where winners are selected randomly:

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 that you can offer paid and unpaid entry options—but paid entries cannot be the only path to participate.

In countries like the United States, No Purchase Necessary Laws are built around the concept of "Consideration". This refers to the value that a participant gives in exchange for the opportunity to win.

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

• Monetary consideration – Any requirement that involves spending money, such as buying a product or paying a fee to enter.
• Non-monetary consideration – Tasks that require significant time or effort, such as completing a lengthy form, visiting multiple stores, or watching long videos. These can fall into a legal grey area depending on the jurisdiction.

What qualifies as "consideration" can differ between countries:

• In the U.S., a product purchase is considered monetary consideration and will trigger the need for a free alternative entry method.
• In countries like the U.K. or New Zealand, simply purchasing a product at regular price may not count as consideration—unless there is a hidden markup or additional cost tied to entry.

In countries with No Purchase Necessary laws, you can run a giveaway that includes purchase-based entries — but only if you also provide a completely free way to enter.

This is known as an Alternate Method of Entry (AMOE), and it ensures your campaign stays compliant by allowing everyone an equal chance to participate, whether or not they make a purchase.

Here is what AMOE means for your campaign:

• 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.
• You must ensure that purchase and non-purchase entries have the same value and weight.

Common AMOE options include:

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

What matters most is that your AMOE is easy to access, clearly communicated, and available for the duration of your promotion.

Gleam will detect the user’s location and only display the free entry method where required by law. This removes the guesswork and ensures your Terms & Conditions are always up to standard.

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 to users in regions that legally require it — so your giveaway experience remains streamlined everywhere else.

👉 Check where AMOE is required by country 🌎

Lotteries and raffles are two similar types of prize promotions where entrants are required to make a purchase and winners are randomly drawn.

Businesses are typically prohibited from running these types of prize promotions, so it is important to make sure that your campaigns do not fit the legal definition of a lottery or raffle.

A lottery is a type of prize promotion that is defined by three key features:

1. The promotion gives participants a chance to win money or a prize with value.
2. The winners are chosen at random (i.e. by chance).
3. Participants must buy tickets or otherwise provide consideration (without a free entry alternative available).

In the U.S.A. and many other countries, lotteries are, for all intents and purposes, illegal unless you are the government!

A raffle is similar to a lottery in that users pay to enter and winners are drawn at random. However, two features differentiate raffles from lotteries:

1. Raffles must have a winner every time — the prize pool cannot be “carried over.”
2. Raffles can only be privately run under strict limitations.

In most jurisdictions, raffles are restricted to non-profit organisations only. Even then, additional permits or charity registrations are often required.

So while raffles may appear to be a workaround for lotteries, for-profit businesses are not allowed to run them.

As a general rule, private businesses cannot run lotteries or raffles. To remain compliant with No Purchase Necessary laws, you must eliminate at least one of the three defining factors:

1. Entry involves payment or monetary consideration
2. Winners are chosen by chance
3. There is a prize of material value

To make your promotion legal:

• Do not ask entrants to make a purchase.
• Offer a free Alternate Method of Entry.
• Or switch to a skill-based contest with winners judged on merit.

Games of chance — also known as sweepstakes or giveaways — are legal to run, as long as they are designed correctly.

A game of chance typically includes:

1. A prize of real value (cash, products, services)
2. A random selection of winners (e.g. drawn names)
3. No purchase or payment required to enter

What separates a legal sweepstakes from an illegal lottery is the lack of a required purchase. As long as users can enter for free, you can offer random-draw giveaways in most countries.

That said, if you do include purchase-based entry methods, you must also provide a Free Alternate Method of Entry (AMOE) — especially in countries with No Purchase Necessary laws.

👉 Check AMOE requirements by country 🌎

Yes — but only in certain regions and with conditions.

Countries with No Purchase Necessary Laws:
You can offer entry via purchase only if you also offer a clearly explained free alternative of equal value.

Countries without these laws:
You may run purchase-only campaigns, but check local rules to be safe.

Games of skill — also known as contests — are a type of prize promotion where winners are selected based on merit, performance, or creativity, rather than chance.

These contests do not rely on random selection. Instead, entries are judged or scored using a set of criteria.

Common examples include:

• Best Photo or Video Submissions
• Short Essay or Caption Contests
• Sports Challenges
• Public Voting Competitions
• Creative Challenges (e.g. "Tell us in 20 words or less...")

Since skill-based contests are not randomised, they are not classified as sweepstakes or lotteries, which means different legal rules apply.

Yes. Because winners are not chosen by chance, No Purchase Necessary laws do not apply.

That means you can:

• Require a purchase to enter
• Reward paying customers with exclusive access
• Combine purchase with creative submission steps

Just make sure the winner is clearly chosen based on merit, not randomly.

Want inspiration? You can use Gleam to run contests that involve skill-based entry methods like UGC submissions or judged entries. Here is a quick demo:

  view template

No Purchase Necessary laws are designed to protect consumers by ensuring that chance-based giveaways do not require a purchase to participate — unless a free entry method is clearly offered.

The laws and definitions vary widely between countries and even between regions within the same country.

Below, we have summarised major examples.

In the United States, No Purchase Necessary rules are very strict.

If winners are selected by random draw, then:

• You cannot require a purchase to enter
• You must provide a free alternative method
• You must not give more entries or better odds to paying entrants

However, skill-based contests do not fall under these laws, which means you can:

• Ask entrants to buy your product
• Charge entry fees
• Require proof of purchase for participation

🚨 Important Exceptions: Some U.S. states — including Colorado, Maryland, Nebraska, North Dakota, and Vermont — prohibit even skill contests from requiring purchases. Check with local legal counsel before launching.

In the U.K., you are allowed to require a purchase in some cases — but with restrictions.

✅ Permitted:

• Asking entrants to buy your product, as long as it is sold at the normal retail price
• Running skill-based contests with merit-based judging

❌ Not Permitted:

• Charging an entry fee
• Selling your product at an inflated price to “buy entries”
• Charging both a product cost and an additional contest fee

If you are running a chance-based giveaway, it is safest to:

• Avoid requiring a purchase altogether
• Or provide a free entry alternative of equal value

In Canada, you can run chance-based prize promotions legally — as long as two specific conditions are met:

1. You cannot require a purchase to enter. You must provide a free alternative method.
2. You must include a skill-testing component. Winners cannot be selected purely at random.

To comply with Canadian law, chance-based contests must include a question of skill — typically a math problem with multiple operations, answered without assistance.

This transforms your campaign from a game of chance into a mixed game of skill and chance — which is allowed under Canadian rules.

If you are using Gleam, adding a skill question is simple. Use the Question or Secret Code action and set it as required.

  view template

If your promotion is skill-based with no random draw, this requirement does not apply, and you can safely offer purchase-only entry.

Australia does not enforce No Purchase Necessary requirements for promotions.

This means:

• You can require a purchase to enter
• You do not need to offer a free alternative
• You can run both chance- and skill-based giveaways with paid entry

Just keep in mind that state-specific permits may be required for certain prize values or random draws.

New Zealand allows chance-based promotions with purchase requirements — as long as the product is sold at its normal retail price and does not include an added entry fee.

✅ You can:

• Ask customers to buy your product to enter
• Run random draws based on proof of purchase
• Skip offering a free entry alternative — as long as the purchase is fair and standard

❌ You cannot:

• Require both a purchase and an extra fee
• Inflate prices to hide an entry cost
• Ask users to pay just to enter, without buying a product

These rules aim to prevent abuse while still allowing promotional flexibility.

If you are running a skill-based contest, no restrictions apply regarding purchase — the same as in most regions.

The following table provides a summary of No Purchase Necessary laws in various countries and highlights where a free entry alternative is required if you include purchase-based entry.

Note: These laws only apply to chance-based promotions. If you are running a skill-based contest, these requirements typically do not apply.

Country	No Purchase Necessary Laws	AMOE
Argentina	Purchases not allowed. Must offer free entry.	Yes
Australia	Purchases allowed.	No
Austria	Purchases allowed at normal retail price only.	No
Belgium	Purchases allowed.	No
Bolivia	Purchases allowed at normal retail price only.	No
Brazil	Purchases allowed.	No
Bulgaria	Purchases allowed.	No
Canada	Purchases not allowed. Free entry required.	Yes
China	Purchases allowed.	No
Colombia	Purchases allowed.	No
Costa Rica	Purchases allowed at normal retail price only.	No
Croatia	Purchases allowed.	No
Czech Republic	Purchases allowed at normal retail price only.	No
Denmark	Purchases allowed at normal retail price only.	No
Dominican Rep.	Purchases allowed.	No
Ecuador	Purchases allowed at normal retail price only.	No
Finland	Purchases allowed at normal retail price only.	No
France	Purchases allowed at normal retail price only.	No
Germany	Purchases not allowed. Must offer free entry.	Yes
Greece	Purchases not allowed. Must offer free entry.	Yes
Hong Kong	Purchases allowed.	No
Hungary	Purchases allowed.	No
India	Purchases not allowed. Must offer free entry.	Yes
Ireland	Purchases not allowed. Must offer free entry.	Yes
Israel	Purchases allowed.	No
Italy	Purchases not allowed. Must offer free entry.	Yes
Japan	Purchases allowed, but prize value may be restricted.	No
Lithuania	Purchases allowed.	No
Luxembourg	Purchases not allowed. Must offer free entry.	Yes
Malaysia	Purchases not allowed. Must offer free entry.	Yes
Mexico	Purchases allowed.	No
New Zealand	Purchases allowed at normal retail price only.	No
Nicaragua	Purchases allowed.	No
Netherlands	Purchases allowed.	No
Panama	Purchases allowed.	No
Paraguay	Purchases allowed.	No
Peru	Purchases allowed.	No
Poland	Purchases allowed.	No
Portugal	Purchases allowed at normal retail price only.	No
Puerto Rico	Purchases not allowed. Must offer free entry.	Yes
Romania	Purchases allowed at normal retail price only.	No
Russia	Purchases not allowed. Must offer free entry.	Yes
Saudi Arabia	Purchases not allowed. Must offer free entry.	Yes
Singapore	Purchases allowed at normal retail price only.	No
Slovakia	Purchases allowed.	No
South Korea	Purchases not allowed. Must offer free entry.	Yes
Spain	Purchases allowed at normal retail price only.	No
Sweden	Purchases allowed.	No
Switzerland	Purchases not allowed. Must offer free entry.	Yes
Thailand	Purchases not allowed. Must offer free entry.	Yes
Turkey	Purchases not allowed. Must offer free entry.	Yes
Ukraine	Purchases not allowed. Must offer free entry.	Yes
Uruguay	Purchases not allowed. Must offer free entry.	Yes
United Kingdom	Purchases allowed at normal retail price only.	No
United States	Purchases not allowed. Must offer free entry.	Yes
Venezuela	Purchases allowed.	No

If your campaign is open to countries not listed here, we recommend avoiding mandatory purchases altogether — or consulting a legal advisor before launch.

When you use Gleam's Competitions App, you can automatically include a free entry method for countries that require it — ensuring smooth compliance.

No Purchase Necessary Laws might limit how you incentivise purchases — but they do not stop you from running powerful contests that drive:

• Engagement
• Brand awareness
• Social growth
• Email capture
• Referrals
• UGC collection
• Product discovery

When you use Gleam’s Competitions app, you can add dozens of value-driven entry actions — many of which are fully compliant worldwide.

You can incentivise participants to:

• Join your mailing list
• Visit a product page
• Watch a video
• Tag friends on Instagram
• Share your campaign
• Leave a review
• Submit UGC
• Complete a survey
• Answer a question
• Upload a receipt

  view template