Running giveaways, competitions, and trade promotions has become one of the most effective ways for businesses to increase brand awareness, build loyal audiences, and generate strong customer engagement. Whether you are using giveaways to promote a product or operating a membership based competition model, a well designed trade promotion can create enormous buzz and even attract media attention.

However, trade promotions are regulated in Australia and must follow specific rules depending on the structure of your competition. This guide explains how to run a trade promotion legally, when you need permits, and what documents you must have in place to protect your business.

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What Is a Trade Promotion Competition

A trade promotion is a free entry competition run by a business to promote its goods or services. These promotions are also known as giveaways, sweepstakes, competitions, lotteries or promotional games.

To qualify as a trade promotion in Australia, your competition must meet the following criteria:

• The promoter must hold an Australian Business Number (ABN) or Australian Company Number (ACN).

• The purpose of the competition must be to promote goods or services.

• Entry must be free and cannot be purchased.

• Participants must not be employees or anyone benefiting from the promotion.

Businesses often use trade promotions to reward customers, attract new audiences, or incentivise participation in a membership program.

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Membership Based Trade Promotions

Many businesses now run competitions where customers buy a membership, subscription, or product that comes with additional benefits. As long as the competition entry is free and the membership provides genuine value unrelated to the giveaway entry itself, this structure can also fall under the trade promotion category.

For example, a membership may include:

• Discounts on products

• Early access to content

• Member only deals

• Access to digital items or exclusive experiences

• Community participation benefits

The free competition entry is then provided as an added bonus to the membership. The key legal point is that the entry must not be the thing being sold. The membership must have real standalone value.

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Types of Competitions: Chance vs Skill

When planning a promotion, you must first determine the type of contest you are running:

Game of Chance:
Winners are selected randomly using a draw or automated system. These competitions usually require specific permits depending on prize value and location.

Game of Skill:
Winners are chosen based on merit. For example, a judging panel selects the best answer or performance. Games of skill generally do not require permits, but you must still follow advertising, fairness, and privacy laws.

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When Do You Need a Permit

Australia regulates trade promotions at the state and territory level. Whether you need a permit depends on the location of your participants, the total prize pool value, and the type of competition.

Below is a general guide for game of chance competitions:

New South Wales

Permit required for prize totals of 10,000 dollars or more.

Australian Capital Territory

Permit required for prize totals of 3,000 dollars or more.

South Australia

Permit required for prize totals of 5,000 dollars or more.

Northern Territory

Permit required for prize totals of 5,000 dollars or more unless you already hold a permit from another state.

Tasmania, Victoria, Queensland, Western Australia

Permits are not required, but the promotion must still comply with relevant regulators including advertising rules, disclosure requirements, and competition terms.

Permit fees vary depending on prize value and duration.

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Essential Legal Documents for Running a Competition

To protect your business and ensure compliance, you should have the following documents prepared before launching any trade promotion.

1. Competition Terms and Conditions

This is the central legal document for your promotion. It must comply with all state and territory requirements and include details such as:

• Eligibility

• How to enter

• Prize information

• Draw process

• How winners are notified

• How disputes are handled

Compliant Terms and Conditions reduce risk and protect your business if a complaint arises.

2. Membership Terms (if operating a subscription or paid club)

If your competition is linked to a membership or subscription, you must have clear membership terms to govern:

• Customer rights

• Membership inclusions

• Billing and cancellation

• Liability and disputes

These terms ensure your membership product is legally sound.

3. Website Terms and Conditions

A general terms document explains the rules for using your website or platform. This protects your business from misuse and sets expectations for all users.

4. Privacy Policy

A privacy policy is required if you collect personal information. It must explain:

• What data you collect

• How data is stored

• How it is used

• Whether you use data for marketing

Some states require explicit disclosure if entrant information will be used for advertising in the future.

5. Supplier Agreements

If you rely on other businesses to provide prizes, discounts, or promotional items, supplier agreements ensure your partners deliver what they promise.

6. Company Structure

If you are running your promotion as a business, establishing an appropriate company structure can help protect your personal assets and create clear operational boundaries.

7. Trade Mark Registration

Protect your brand name early. Changing your competition or club name later can be costly and confusing for customers.

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Key Compliance Tips for Running a Legal Giveaway

To ensure your trade promotion remains compliant:

• Clearly disclose that entry is free.

• Do not mislead customers about their chances of winning.

• Publish all necessary information in your Terms and Conditions.

• Apply for permits early if required.

• Run the draw fairly and transparently.

• Keep records of entries and draw methods.

• Notify winners within the required time frame.

• Send prizes promptly.

Good compliance protects your brand, builds trust, and reduces legal risk.

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Final Thoughts

Trade promotions are a powerful way to grow a business, reward customers, and create excitement around your brand. Whether you are running a simple promotion or a full membership based competition model, understanding the legal framework is essential.

By planning your structure carefully, ensuring entry remains free, securing permits where required, and preparing the right legal documents, you can run successful giveaways that attract attention and comply with Australian law.

If you want, I can also create:

• an SEO title and meta description

• a version tailored to your giveaway platform

• a guide comparing trade promotions vs raffles vs charity lotteries

• a checklist template for compliance

 

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