The legal requirements for promotional content depend on what kind of promotion you’re running, but they cluster into four buckets: honest pricing and discount claims, contest and sweepstakes rules, email and text-message consent, and disclosure of any strings attached. Each has its own governing law — the FTC Act for pricing, state sweepstakes and gambling law for contests, CAN-SPAM for email, and the TCPA for SMS. Get the disclosures and consent right and most promotions run clean. This is general guidance, not legal advice.
Key Takeaways
- Four compliance buckets: pricing/discount claims, contests and sweepstakes, email (CAN-SPAM), and SMS (TCPA).
- No purchase necessary: a promotion that requires payment to enter and awards prizes by chance can be an illegal lottery — the fix is a free-entry method.
- Email vs. text differ sharply: CAN-SPAM needs an unsubscribe and honest headers; the TCPA needs prior express written consent before you send.
- Discount claims must be honest: “was $100, now $50” requires a real former price.
- Disclose material terms clearly — deadlines, conditions, and what “free” actually requires.
What legal requirements apply to promotions?
“Promotional content” covers a wide range — sales, discounts, coupons, contests, sweepstakes, giveaways, referral offers, and the emails and texts that deliver them — and different rules attach to each. The unifying principle is honesty about the offer: a promotion is legal when the terms are truthful, the material conditions are disclosed, and you have the right to contact people the way you’re contacting them. Where promotions get businesses in trouble is the fine print they skip: a “sale” price that was never really higher, a “free” gift that quietly requires a purchase, a sweepstakes that looks like an illegal lottery, or a marketing text sent without the consent the law requires. Knowing which bucket your promotion falls into tells you which specific rules apply, so the first step is always to classify the promotion before you write the copy.
How do contest and sweepstakes rules work?
This is the bucket that surprises people, because a poorly structured giveaway can be an illegal lottery. Under U.S. law, a lottery has three elements: a prize, chance, and consideration (payment to enter). Games run by private businesses generally can’t have all three. The two legal structures remove one element each:
- Sweepstakes removes consideration — that’s why you see “No purchase necessary” and a free method of entry. Everyone can enter without paying, so it’s not a lottery even though winners are chosen by chance.
- Contest removes chance — winners are selected on skill or merit (best photo, best essay), judged by stated criteria.
Both require clear official rules: eligibility, entry period, prize details and odds, and how winners are selected. Some states have registration and bonding requirements for larger-prize sweepstakes. When in doubt, structure it as a “no purchase necessary” sweepstakes with a free-entry alternative and published rules.
Which rules govern promotional emails and texts?
Email and SMS are governed by two different laws with very different consent standards, and conflating them is a common, expensive mistake.
- Email — CAN-SPAM. You generally don’t need prior consent to send a marketing email, but every message must have accurate header and subject information, a clear identification that it’s an ad, a valid physical postal address, and a working unsubscribe mechanism that you honor promptly. Penalties accrue per non-compliant email, so the exposure scales with volume.
- SMS — TCPA. Much stricter. You need prior express written consent — a documented, affirmative, un-pre-checked agreement naming your business — before sending an automated marketing text. And you must honor opt-outs quickly; as of 2026, consumers can revoke consent through any reasonable method, not just a keyword reply.
The rule of thumb: email is opt-out with strict formatting; text is opt-in with strict consent. A list built for one doesn’t automatically satisfy the other.
Why do pricing and discount claims get scrutinized?
Because a fake discount is a deceptive practice, and it’s one the FTC and state regulators actively police. A “was $100, now $50” claim requires that the item genuinely sold at $100 for a reasonable period — you can’t inflate a “regular” price nobody paid just to manufacture a bargain. “Free” offers must clearly disclose what’s required to get the free item; a gift that actually demands a purchase isn’t free without that disclosure. Time-limited urgency (“ends midnight!”) must be real, not a perpetually resetting countdown. And any material condition — minimum spend, exclusions, auto-renewal after a trial — has to be disclosed clearly and near the offer, not buried. The FTC’s core deception standard applies to all of it: the net impression the promotion leaves on a reasonable consumer must be accurate. Honest pricing isn’t just compliant; it’s what keeps a promotion from converting into a refund wave and a reputation problem.
How do you run a compliant promotion, step by step?
Classify first, then apply the matching checklist. Identify the promotion type — discount, sweepstakes, contest, referral — because that determines the rules. For any prize giveaway, remove either chance or consideration and publish official rules with eligibility, dates, odds, and winner selection. For discounts, verify the reference price is real and disclose all material conditions near the offer. For email, confirm CAN-SPAM formatting — honest headers, physical address, working unsubscribe. For SMS, confirm you have documented express written consent for every recipient before sending. Disclose anything a reasonable person would want to know before acting, in language they’ll actually read. Keep records — consent logs, rule versions, reference-price documentation — so you can substantiate the promotion if questioned. Route anything involving large prizes, health, finance, or children through closer review, since those carry extra rules.
Frequently Asked Questions
Do I need “No purchase necessary” on a giveaway?
If your giveaway involves a prize, chance-based selection, and payment to enter, it can be an illegal lottery. Adding a free method of entry (“No purchase necessary”) removes the consideration element and is the standard fix. This is general guidance, not legal advice.
Can I text my email subscribers a promotion?
Not automatically. SMS marketing requires prior express written consent under the TCPA that’s specific to texting — an email opt-in doesn’t cover it. You need separate, documented consent to send marketing texts.
What must a marketing email legally include?
Under CAN-SPAM: accurate headers and subject line, identification as an advertisement where applicable, a valid physical postal address, and a working unsubscribe link honored promptly. Consent isn’t required to send, but the formatting rules are.
Can I advertise a “sale” if the item was never sold at the higher price?
No. A former-price claim requires that the item genuinely sold at that price for a reasonable period. Inventing a “regular” price to fabricate a discount is a deceptive pricing practice.