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On Sales Promotion

What does sales promotion mean?

Sales promotion means techniques intended for broad consumer participation which contain premises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security, service or winning in a contest, game, tournament, and other similar competitions which involve determination of winner/s and which utilize mass media or other widespread means of information. It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product.

What are exempted from the rules on sales promotion campaigns?

Those exempted are:

    • Sales promotion campaigns sponsored by the government or by any of these agencies or instrumentalities when the same is conducted in the exercise of their governmental functions.
    • Imported products under promotion in their country of origin, not covering the Philippines, whether or not, benefit redounds accidentally to local buyers.
    • Social, civic, political, religious, educational and other similar organizations which extend promotional activity among their members. Provided, that the promotional activity is not considered sales promotion campaign as defined under these Rules.
What must a person do if he intends to conduct a sales promotion?
Any person intending to conduct any form or scheme for a sales promotion campaign of a consumer product, service or credit shall first secure a permit from the Department at least thirty (30) days before the commencement of the promotion period.
What are the requirements for recurring sales promotion campaigns?

For recurring sales promotion campaigns involving the same scheme and mechanics but with different or undetermined promotion periods, a single application for the permit covering a period of one (1) year is deemed sufficient compliance with these rules.

What is the requirement if a sales promotion campaign has several sponsors?
Where there are several sponsors to the sales promotion campaign, a single application for permit may be filed, provided that all the sponsors shall sign the application or submit therewith a true copy of any written agreement between and among themselves stating that they are the sponsors of the sales promotion campaign.
What is the degree or extent of a sponsorís participation and responsibility?
The degree or extent of a sponsorís participation and responsibility may be stated in the application or agreement. Where no limitation as to the extent of the liability or responsibility is indicated, each sponsor shall be deemed fully responsible for the sales promotion campaign.
What specific information should be included in the application?

The application for permit to conduct a sales promotion campaign shall be in the form required by the Department which shall contain the following information and documents:

    • The complete name, address, and telephone number, if any, of the sponsor(s) of the sales promotion campaign;
    • The complete name, address, and telephone number, if any, of the sales promotion agent or agency, if any;
    • The complete name, address, and telephone number, if any, of the person/s who may be contacted by the participants of the promotion for inquiries, complaints, and similar purposes;
    • The consumer product, its brand, classification and/or size or the kind and extent of the consumer service or credit to be promoted;
    • Proof of registration of the product or business being promoted if the same is required by any government agency;
    • The geographical area to be covered;
    • The type or nature of the sales promotion campaign to be undertaken;
    • The sales promotion period;
    • The target participants and the required qualification, if any;
    • The type of announcement and/or information dissemination that will be used for the sales campaign or promotion including the text or substance of such announcement or information to be disseminated to the public;
    • The mechanics and the criteria, if any, for participating and winning in the sales promotion campaign;
    • The procedure for predetermination of winning entry forms, and if applicable, the computer program to be used;
    • The type of entry forms and/or paraphernalia to be used in the promotion;
    • The plan for seeding of qualifying entry forms, paraphernalia, or predetermined winning entry forms;
    • The date, time and place for auditions, try-outs, pre-qualification and/or qualification of participants to the promotion, if the same is required;
    • The security marks, if any, or the nature thereof in the entry forms and/or paraphernalia to be used in the promotion, their purpose, the method of their verification, and a sample specimen of such entry form or paraphernalia containing such security mark;
    • The deadline of submission of entries;
    • The specific city, municipality, and province and number of drop boxes or the person and address where entry forms may be sent;
    • The amount of prizes for each category of winners. If there are or if the prizes are in kind, the description, brand, size, model, or make and their market value of the time of application;
    • Whether a prize in kind is transferable, convertible to cash or both;
    • Whether the required taxes for the winners shall be shouldered by the sponsor/s or by the winners and in case of the latter, whether the same shall be withheld by the sponsor/s;
    • Time and dates within which the prize is demandable after the termination of the sales campaign or promotion which shall be less than sixty (60) days from notification or publication whichever comes last;
    • The requirement/s and/or the type of identification which will be required to claim the prizes.


Are there exemptions from permit requirements?

Permits for the following sales promotion activities need not be applied for:

    • Competitions, except beauty contest conducted nationwide, which do not require the purchase, lease, or payment for any consumer product or service or availment of consumer credit;
    • Parlor games, whether held live during stage shows, parties, special occasions and/or utilizing any form of mass media where the qualification to be a participant and/or a home partner of the winner does not require the purchase or lease of any consumer product or service or the availment of a consumer credit facility and/or the sending or presentation of any proof thereof;
    • Door prizes given to patrons of concerts. Stage shows, stage plays, film showing and similar activities; and
    • Instant sales promotion campaigns;
    • In store promotions, such as, but not limited to price reduction promotions, discount sales and premium-in pack in which no advertisements are made on such sales promotion campaign. Provided, however, that sales promotion campaigns exempted from permit requirement shall be subject to all the other pertinent rules and regulations on sales promotion campaigns.
What are the prohibited acts in the conduct of sales promotion?

Prohibited acts include:

    • Gambling and Wagering Schemes - No gambling or wagering scheme, as prohibited under existing laws shall be allowed in the conduct of any sales promotion campaign.
    • Use of Medical Prescriptions - No sales promotion campaign using medical prescriptions or any part thereof or attachment thereto shall be allowed nor permit be issued.
    • Other prohibited activities:
    • No act, product, scheme, or activity prohibited or declared illegal under the law shall be allowed in the conduct of any sales promotion campaign. Where an imported product is under international sales promotion, and such promotion is prohibited in the Philippines, the local distributor of the same shall indicate by a notice on or accompanying the product that such sales promotion campaign is not applicable in the Philippines.
    • No person shall directly or indirectly tamper with the entries and/or paraphernalia in a sales promotion campaign nor unduly influence the results thereof or perform any act to the prejudice of legitimate participants and/or winners.
May an approved sales promotion campaign be discontinued or cancelled?
An approved sales promotion campaign may be discontinued or cancelled by the sponsor/s motu propio provided that no information dissemination and advertising of the same has been made yet. In such a case, written notice shall be sent to the Department prior to such voluntary cancellation.
How should voluntary cancellation be made after publication but before commencement of the promotion period?
If any announcement, information , dissemination or advertising of the sales promotion campaign has already been made, but the promotion period has not yet commenced, the discontinuance or cancellation of the promotion may be made only upon prior written notification to the Department and the discontinuance or cancellation of the sales promotion shall immediately be disseminated in the same manner, frequency and medium as the promotion has been announced, published or advertised before the originally intended commencement of the promotion.
How is voluntary cancellation of ongoing promotion made?

Voluntary cancellation or discontinuance or suspension of any ongoing sales promotion campaign shall not be allowed except upon approval from the Department. The Department may allow such cancellation on any of the following grounds:

    • A final judgment of insolvency of the sponsor/s from a court of proper jurisdiction;
    • The occurrence of any fortuitous event that will make it impossible for all sponsors to continue to deliver the products or services which has to be purchased or leased or paid for in order for one to participate in the promotion: Provided, however, that those who had already won in the promotion before approval of its cancellation is granted shall be paid their prizes.
What specific information should be included in the announcements, publication or advertisement of the mechanics of the sales campaign?

The time, dates, and places of the following events in the sales promotion campaign shall be made definite in the announcement, publication or advertisement of the mechanics of the sales campaign:

    • The promotion period:
    • The deadline for submission of entry forms or entering as participant in the promotion;
    • The location of drop boxes for entry forms and/or the address where entry forms may be sent, or where one may inform the sponsor of one's intention to participate in the promotion;
    • The time/date, and place of the pre-draws, pre-qualifications, try-outs, or auditions to qualify as participant to the sales promotion;
    • The time, date and place of preliminary draws, preliminary selection or predetermination of winners of the promotion;
    • The time, date and place of final draws or final determination of the winners of the promotion;
    • The time, duration and place where prizes may be claimed by the winners.
What are the other requirements for a sales promotion campaign?

Other requirements include:

  • Availability of entry forms to participants - Where entry forms are to be obtained at specific places, the same shall be made available to qualified participants during office or store hours, unless other ways of obtaining them are specified in the mechanics of the promotions.
  • Deadline for submission of entries - The deadline for submission of the entries shall be at least one day before the date of the draw or selection winners, unless, otherwise, the scheme utilized makes the one day period impracticable.
  • Draw dates, date of selection of winners - Draw dates or date of selection or determination of participants or winners to a sales promotion campaign shall not be more than two weeks after the deadline of the submission of entries, the pre-qualification, audition or try-out.
  • List of winners - Except in the case of sales promotion campaigns involving redemption where the prizes are negligible or those exempted from applying for a permit, a list of the names of winners, their addresses and corresponding prizes, shall be furnished the Department immediately after their being drawn or selected.
When is the presence of participants required in the selection of winners?

The presence of participants shall not be required in the determination of winners of any sales promotion campaign except in the following cases:

  • Instant sales promotion;
  • In the case of competitions, games or parlor games where the presence of the participants is essential to determine the winner; and
  • Such other forms of sales promotion campaigns the nature of which demand the presence of the participants.
What is the general rule on the duration and extension of promotion period?
The sales promotion campaign shall have a duration of not more than a year, extendible to a maximum of six (6) months upon approval by the Department.
May a sponsor or promoter make some changes in the conduct of sales promotion without the knowledge and approval of DTI?
No. Any changes on the conduct of sales promotion such as extension or delay in the dates of the starting, termination and determination or selection of winners, venue of draws, auditions, and try-outs, duration, mechanics, procedures or terms and conditions of sales promotions campaigns, and qualifications required of the participants, criteria in the determination and selection of winners cannot be made without the knowledge and approval of DTI. The aforementioned changes shall be published, announced, or advertised at least twice before such change is effected.
What is the rule on the postponement or extension of grand draws or final selection of winners?
Grand draws or final selection of winners may only be postponed once, upon the approval of the Department and shall be held within the next two (2) weeks after the date of the previously scheduled grand draw.
When can a winner claim his prize?
A winner shall have at least 60 days from the date of publication or announcement or notification of winners.
How long can a sponsor hold price reduction promotions?
Any price reduction promotion on any consumer product or service shall not exceed three (3) months. However, in the case of closing-out sales, the period shall be six(6) months.
In price reduction promotions with a period, is the use of the phrase "WHILE SUPPLY LASTS" allowed?
No. Where such qualification is made in a sales promotion campaign with a period, the sponsor shall be liable therefore throughout the duration of the promotion, whether or not the supply of the products under promotion has been depleted.
What should a winner do if he lost his raffle stub?
The winner will execute an affidavit of loss, together with any of the following: affidavit of at least two (2) interested persons attesting to his identity, certification of the barangay captain that the winner is really a resident of that place, and other identification papers.
What is the liability of the sponsor/promoter in case the prize was mistakenly given to a holder presenting a fake form?
The sponsor who committed a mistake by giving the prize to a holder presenting a fake entry form, the same shall not be a reason to withhold the payment of the prize to the holder presenting the genuine entry form.
What is the rule in disseminating/advertising information regarding sales promotions campaigns?
All advertising/information materials indicating or describing the mechanics of the promotion shall conform with the mechanics approved by the Department. Sales promotion campaigns shall include in their advertisement, publication or announcement the phrase "Per DTI (Regional or Provincial Office) Permit No. ___ Series of (Year)" with the corresponding control number as may provided by the Department.
Can prizes be transferred or converted to cash or in kind?
Prizes in the form of foreign or domestic trips and with or without accommodations and scholarships, shall either be transferable, convertible to cash or both. In such cases, the cash equivalent of the prize shall be disclosed in the sales promotion campaign announcements, publications and advertisements.
Can prizes, premium or benefit under a sales promotion campaign be reduced in quality and quantity?
No reduction in quality or quantity in the products or services under sales promotion nor in the prizes, premium or benefit granted by reason of the same shall be allowed.
What are the guaranties, warranties and remedies available to consumers under a sales promotion campaign?
Buyers of products and services sold under a sales promotion, as well as winners, with reference to their prizes shall enjoy the same guaranties, warranties and remedies provided for under RA 7394 or the Consumer Act of the Philippines and other pertinent laws.
What are the sanctions for violation of these provisions?

Any of the following administrative sanctions provided under Article 164 of the Consumer Act of the Philippines may be imposed even if not prayed for in the complaint:issuance of cease and desist order

    • undertaking of compliance from the respondent
    • imposition of administrative fines ranging from P500 to P300,00

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