Holding a raffle at your place of business can create excitement and increased foot traffic, but might put you on the wrong side of the law if you don’t run it correctly. Raffles are a form of gaming, depending on whether or not you charge for the contest. Familiarizing yourself with your state’s contest rules and regulations and Federal Trade Commission guidelines will help you offer raffles that legally improve your bottom line.
State Legal Requirements
Visit the website of your secretary of state to determine the rules for contests, particularly those that apply to raffles. Call or write with specific questions and ask for the answers in writing. Ask if you can charge for a raffle, allow customers to enter the raffle using a receipt from a purchase at your store, if you can send free raffle tickets to consumers to provide you with an email address for your marketing efforts or if you can partner with a nonprofit, turning over proceeds from the raffle to them.
Federal Legal Requirements
Visit the websites of the U.S. Small Business Administration and the Federal Trade Commission to learn about federal regulations regarding contests. The SBA provides an article at its website, “How to Use Contests, Sweepstakes, and Giveaways as Marketing Tools - While Staying Within the Law,” which takes you through the basics of holding a contest.
Don’t allow managers, employees, vendors, suppliers or family members of employees to enter the contest. While it might be perfectly legal, having your manager’s wife win a much-hyped raffle can damage your reputation. If you work with a nonprofit partner, extend the same limits to their staff and board members. Check with an attorney to create the wording for your limitations.
Add a Partner
The easiest way for a business to hold a raffle might be to partner with a local nonprofit. Not only will you be able to create in-store excitement or attract customers on your mailing list into your store, but you will also receive additional support from the charity, which will promote you to its supporters. People who might not ordinarily come into your store might stop by if they are strong supporters of your charity partner. Have an officer of the nonprofit draw the winner or winners publicly to ensure there are no complaints of favoritism. If you’re a charity, partner with businesses, including the vendors, contractors or suppliers that rely on your business, and ask them to donate a prize and to promote your raffle.
Tailor Your Raffle
A raffle should be part of your brand-management strategy, which includes promoting and enhancing your image. Simply giving away a prize doesn’t help do this. For example, some retailers offer close out inventory as raffle prizes -- but if you can’t sell items, they aren’t attractive to your target customers and might not fit your brand. Offer a prize that promotes your brand and fits into your year-round messaging. If you are offering a service, make it one that’s easy to sell, since customers will have the most interest in it.
Maximize Your Exposure
Plan your raffle well enough in advance that you get plenty of pre- and post-event publicity. Promote it with in-store signage, on your website, at your social media pages, with tweets and via email. Ask a charity partner to do the same. After you draw the winner, announce her via an email blast, tweets, social media posts and photos on your website.
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.