A prize promotion is a marketing activity that offers people the chance to win a prize, such as a social media giveaway, a prize draw or a competition. In the UK it is a type of sales promotion, so it is covered by section 8 of the CAP Code, and depending on how people enter, it can also fall under the Gambling Act 2005.
How prize promotions work
There are two main kinds, and the difference matters legally:
- Prize draws, where winners are picked at random from all eligible entries.
- Prize competitions, where winners are chosen on merit, using a genuine test of skill, knowledge or judgement, such as the best photo judged by a named panel.
Under the Gambling Act 2005, which covers Great Britain, a promotion where people pay to enter and prizes are awarded by chance can be an unlawful lottery. Payment includes an entry fee, a premium-rate call or text, or paying for a product at a price that reflects the chance to win. A paid-entry draw stays lawful if there is a genuinely free entry route offered on equal terms, or if winning depends on enough skill to put off or rule out a significant proportion of people. Northern Ireland has its own, separate law, so promoters running a UK-wide draw linked to a purchase usually offer a free route and take advice. A simple “follow us and comment to enter” giveaway costs nothing to enter, so it is a free draw, but the CAP Code still applies.
Each platform also has its own promotion rules. Meta, for example, has long prohibited requiring people to share a post to their personal timeline to enter, and expects promoters to state that the promotion is not run or endorsed by the platform. At the time of writing (October 2026), check the current promotion guidelines for every platform you use.
Why it matters
Giveaways are a common way for UK small businesses to grow a following quickly, which makes them a common source of complaints. The ASA regularly rules against promotions that did not award the prize, hid key conditions or chose winners unfairly. A badly run giveaway damages trust with exactly the people you were trying to attract, and a paid-entry draw without a free route risks breaking gambling law.
The CAP Code expects the significant conditions to be clear before people enter, including:
- the closing date and time;
- how to enter, and any restrictions on age, location (for example UK residents only) or number of entries;
- the prize, and any alternative if it becomes unavailable;
- how and when winners will be chosen and told;
- the promoter’s name and contact address.
Promoters must award the prizes as described, use a truly random method or an independent judge, and be able to show how the winner was chosen. Entrants’ details are personal data under UK GDPR, so say how you will use them, and get separate consent before adding anyone to marketing emails.
Common mistakes
- Charging to enter a chance-based draw with no free entry route.
- No terms, or terms hidden in a link nobody can find.
- Picking a winner by hand from the comments rather than by a recorded random method.
- Adding every entrant to a mailing list without their consent.
- Breaking platform rules, such as “share to your timeline to enter”.
- Offering alcohol prizes without excluding under-18s.
How to act on it
Write short, clear terms before launch and link them from the post, putting the key conditions in the caption itself. Choose a free entry method, such as a comment, unless you have taken advice on a paid one. Pick the winner with a random method you can evidence, contact them as the terms say, and award the prize promptly.
Keep a record of the entries, the selection and the delivery of the prize. If giveaways are part of a wider plan to build an audience, I can help you judge whether they bring real customers or just followers who leave afterwards, as part of my digital marketing strategy and consulting.