Why businesses give away cash!

Each year hundreds of thousands of dollars in cash and prizes are given away by businesses via competitions. There are a number of reasons why businesses run competitions (also referred to as trade promotions). Competitions, when compared to discounting, can be a more cost effective marketing method in that predetermined prizes are being given away as opposed to a percentage off an undetermined number of sales.

Competitions can increase sales. Entrants in a competition can be required to purchase a product or service to enter. If the competition is structured correctly, the same customers can then lodge multiple entries when they purchase multiple products. Most of the top consumer brands run competitions in this way, promoting the competition on the product and at point of sale.

Competitions can also help businesses build customer databases. When it receives an entry in a competition, a business is provided with useful information about a consumer. In doing so, it is essential that the business comply with the Privacy Act, National Privacy Principles and Spam Act.

The essentials

There are many requirements to consider when establishing a competition. When drafting terms and conditions, a business must fully set out how and when people can enter, what the prizes are, their value, how the winners will be determined and how winners will be notified. Consideration must also be given to how many times people can enter the competition. The primary responsibility of the business is to be fair and abide by the terms and conditions.

Competition permits will usually be required from the state gaming agencies if the winners of a competition are determined on the basis of an element of chance such as a prize draw. Competition permits will not be required if winners are determined by a suitably qualified judge or judges on the skill shown in the entrant’s answer and there is no element of chance involved.


When conducted properly, competitions can be an exciting and cost effective way of increasing sales and further promoting a business’ goods and services. Businesses give away cash and prizes as they receive something in return and consumers love to win prize.

Permitz Group has been set up in the niche of competitions and trade promotions. Permitz Group can help set up your business’ competition and apply for competition permits on your behalf.