Sweepstakes

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Is the Pope Leo Trading Card Offer an Illegal Lottery?

Before the ink was even dry on the proclamation of the new pope, commercialization efforts began.

Right out of the gate, Topps, the trading card company, began offering Pope Leo XIV commemorative cards. They come in two versions: the standard card and a very limited edition one with white smoke in the background. That version will only have 267 printed, each one individually numbered, like works of art.

Pope Leo cards

Topps was taking orders on its website between May 8 and 11 only and charging $8.99 per card, with quantity discounts available. Within two weeks, the company promised to mail out the cards.

In addition, depending on how many cards Topps sells in total, the company will also print several dozen so-called “parallels” or “chase” cards — very fancy foil versions of various rarities and seed them randomly across all the orders. All purchasers will have a chance of getting one of these very rare cards instead of the standard “base” card.

*MOUSE PRINT:

Pope card parallels

The question arises, however, does this promotion constitute an illegal lottery? Lotteries are defined by state law. “Paying a price for the chance of a prize” is the typical definition.

For example, if Quaker Oats was to advertise that they have hidden a diamond ring in one of every ten thousand boxes of their oatmeal, they would violate state gambling laws. But consumer products companies can legally comply with the law by transforming the promotion into a sweepstakes. To do that, they eliminate the “price” element by offering a no-purchase-necessary means of allowing anyone the chance to win. Typically that is accomplished by asking consumers to send in a three-by-five card with their name and address.

In this case, however, Topps does not offer the public a free chance of receiving one of the theoretically more valuable limited-edition cards.

We asked the company’s PR representative to comment on this issue, and checked with two legal experts who specialize in lottery law. We only heard back from one expert who has sued companies for conducting illegal lotteries. He said, in part…

…more research is needed but “the question now is what consideration are the purchasers of the ‘pope card’ giving for the chance to get [one of the special] cards. This whole scheme by Topps just doesn’t pass the smell test.” –Bill Pannell

There apparently is a history of mostly failed legal attempts to hold trading card companies liable for gambling (see page 406) when they sell card packets some of which randomly contain more valuable cards.

What do you think? Does Topps cross the line by enticing the purchase of these pope cards because there is a chance the buyer will luck out and get one of the rare and potentially more valuable ones?

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Is Hershey Running an Illegal Sweepstakes?

A longtime Consumer World reader, Alex from Virginia, wrote to us recently about a sweepstakes being run by The Hershey Company for Reese’s Peanut Butter Cups.

He got a package like the one below from his local Dollar General store offering a chance at winning $25,000.

Reese's Win $25,000 package

The front of it said, “You could WIN $25,000. See details inside.”

The law of most states says that paying a price (“consideration”) for the chance to win a prize is a lottery, and usually only the state and charities are allowed to conduct them. (This is also the definition of “gambling” in Pennsylvania, where The Hershey Company is headquartered.)

The FTC recently reiterated that companies can’t charge a price to enter a sweepstakes when describing their $18.5 million case settlement with Publishers Clearing House:

Real sweepstakes are free and by chance. It’s illegal to ask you to pay or buy something to enter.

But companies always have promotions telling shoppers if you buy their product you have a chance to win a prize. So how do they get away it?

To prevent any promotion by a company being deemed a lottery or gambling, it must disclose a “no purchase necessary” means of playing the game, such as by sending in a postcard with your name and address. That is called the alternate means of entry (AMOE).

Being a savvy shopper, our consumer knew this so he scrutinized the outside of the package looking for the required information on how to enter the sweepstakes without having to make a purchase. There was nothing on the front, the back, the sides, or even under the flap. But after the candy was purchased, he got a big surprise when opening the package.

*MOUSE PRINT:

There, INSIDE the package, they disclosed how to enter the sweepstakes without having to make a purchase and provided a website with more information! Hello?

disclosure inside the package

And just in case you were thinking maybe Hershey put these Reese’s packages in a special display in stores, and that display disclosed the free way to enter the sweepstakes along with the URL of their special website, that was not the case at least where MrConsumer found the bars in the regular candy display at the checkout at his local Walgreens in Massachusetts. Likewise that’s where a California shopper also found them. A Washington state shopper found them without special signage along with other candy at a Safeway checkout, and our Virginia consumer found them in this display at Dollar General:

Reese's display at Dollar General

So is this promotion legal? We consulted with one of the country’s leading sweepstakes law experts who said in a statement in part:

My opinion on this promotion is that it does violate the lottery laws. The need for clear and conspicuous disclosure [of the AMOE] is particularly important for an on-pack sweepstakes … [and] should be clearly and conspicuously disclosed on the outside of the package.

What does Hershey have to say for itself? We contacted their PR representative three times asking for comment and an explanation, but we received no reply.

However, the company issued a statement to the Associated Press, and the reporter incorporated their position into her story:

Hershey Co., that Pennsylvania candymaker that owns the Reese’s brand, said late Monday that its website contains full details of the promotion. It also said some packages have QR codes that link consumers to more information.

“As with all of our promotions, we place great care and diligence to ensure they are compliant with all regulations,” Hershey said in a statement.

The company also said in-store displays showed abbreviated rules for the sweepstakes, including how to enter without making a purchase. But Dworsky said a spot check of candy displays in multiple states, including California, Virginia and Washington, found no such signs.

Packages purchased by an Associated Press reporter at a Michigan drugstore didn’t contain QR codes, and the store had no signage explaining the promotion.

We’ll only reiterate that the obligation is on the company to disclose to consumers the way to find the free method to enter the sweepstakes, not for buyers to have to go hunting to find it or to have to buy the product.

This case is particularly troubling because children and young people are candy buyers and could well be attracted to the cartoon character on the package, the school theme, and the idea of winning money. Not knowing the law, they or other impulse purchasers might buy this candy needlessly or repeatedly when they didn’t have to.

We also discovered that the company ran the exact same promotion from January through April this year with the same packaging. The problem is that some of those older packages are still for sale indistinguishably intermingled with the new ones but the sweepstakes offer and code inside expired months ago.

For all the foregoing reasons, we urge Hershey to recall all specially-marked packages of Reese’s with the $25,000 offer.

In addition, we have turned over this case to the Federal Trade Commission, the Pennsylvania attorney general’s office, and some other law enforcement entities for their review.

Perhaps it’s time for Reese’s to change their slogan from not sorry to sorry.

Please add your opinion in the comments section.

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Supermarket Sweepstakes’ Free Entry Method Challenged

In early June, a number of the Albertsons Companies supermarket chains (Acme, Albertsons, Carrs, Jewel-Osco, Pavilions, Randalls, Safeway, Shaw’s, Star Market, Tom Thumb, and Vons) began running a “Flavor Adventure” sweepstakes game with over $6-million in prizes. The more you spend in the store, the more entries you get.

Sweepstakes email

But, no commercial enterprise can require you to spend money in order for a chance at a prize — that is the classic definition of an illegal lottery. They have to offer a simple, free method whereby anyone can enter without making a purchase. That is called an “alternate method of entry” (AMOE). So at the bottom of the company’s email shown above in (too) tiny type is information about that free means of entry with the magic words “no purchase necessary.”

*MOUSE PRINT:

No purchase necessary disclosure footnote

That footnote says to find out the free AMOE you have to visit this link (called “rules”) or for all the details, this link called “Official Rules.” They both take you to the same place. [Note: URLs depersonalized]

Buried in those rules is the free method of entry:

*MOUSE PRINT:

Free means of entry

Rather than tell you in simple terms where to send in an entry, like your name and address on a 3 x 5 card, or provide a specific URL, it just says to go to the promotion website, click on the menu, and then the rules button, etc. Didn’t I already click on the rules and now it telling me to do it again. And which menu on the website am I supposed to click?

But let’s play along. Going to the promotion’s website, [page varies for non-loyalty club members] brings us here. There is no menu, but there is a “play now” button and farther down the page yet another link to the official rules.

If you click “play now” the next page gives you a pop-up that among other things says you have to be a loyalty club member to participate (itself a questionable requirement), and yet another instruction to “See Official Rules for free method of entry.” OMG. Do you feel like you are being sent in circles?

Start playing

And when you click “start playing,” then you get yet another screen with instructions to see the rules about playing for free:

Start playing 2

And if you click that button, you get yet another button to start the game.

Play now

Clicking that button brings up what appears to be the actual start of the game… but nowhere to be seen is how you enter the sweepstakes without having to demonstrate that you bought groceries at the store.

Game 1

I invite intrepid readers to spend time reading the rules, and trying various options on the website to find where exactly the free method of entering the sweepstakes has been hidden and to report in the comments what steps you had to go through to get there. There is an answer and believe it or not, you have not seen the most obnoxious part yet!

In our view, the free means of entry that Albertsons Companies has created is illusory because of the complicated series of hoops they created for nonpurchasers to follow that most people will likely abandon. In essence, the alternative means of entry has failed of its essential purpose. And if that is the case, a consumer-sympathetic judge might deem the Albertsons promotion to be an illegal lottery.

Why would any company make it so difficult for their customers (and noncustomers) to participate in this game? Then it dawned on me. What if it was in their financial interest to make it harder? A scan of the official rules provided a possible answer.

*MOUSE PRINT:

unclaimed prizes

Of the over $6.6-million in prizes being offered, only $1.25-million-worth are prizes over $25 for shoppers. That means as much as $5-million of the smaller prizes if they go unclaimed never have to be given away. Obviously, we don’t know the company’s motivation in designing the sweepstakes as they did.

We posed some very pointed questions in multiple inquiries to the Albertsons Companies’ PR folks, including whether they consumer-tested the no-purchase-necessary-method of entry to see if average humans could follow their instructions. They did not respond.

This promotion cries out for action by the FTC and the consumer bar.