Promotions are inventive ways to entice people to buy your products and services through advertisements that enable your company to give out goodies and rewards, and be further noticed by the public in return.
As a simple way of illustrating this, take Brand X. Brand X has a new line of smartphones out in the market, and they want people to get to know their product. Brand X will then partner with a radio station and challenge callers to answer a question for a chance to win one of their phones for free. The persons who call the station with the right answer will win one of the phones.
Do all promotions need a permit?
All businesses that advertise their products (via flyers, radio endorsements, TV ads, etc.) have to register their promos with the Department of Trade and Industry (DTI). It is the government body that regulates these advertised promotions.
Registering with the DTI is important because they make sure that the promo is legitimate (not a scam) and that the winners get their prize.
Only businesses that wish to advertise their promos must apply for a permit. Promos like fundraisers and in-store promotions do not need to be registered with the DTI.
No permit may mean punishment and penalties
Republic Act 7394, or the Consumer Act of the Philippines, is a law which provides for the safety of consumers, while also reprimanding businesses that violate the law.
The registration process is meant to protect the consumer and customer rights, and failure to register a sales promotion by a business is punishable under this law.
Article 60 of R.A. 7394 provides for the penalty of at least P500.00 up to P10,000, or imprisonment of 5 months to a year. In addition, the court can restrain the conducting of the promotion and additionally fine the guilty party for damages.
Here is a simple step-by-step process on how to register your advertised promo with the DTI.