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Promotion to Increase Debit Card Usage

Answered by: 
John Burnett

Question: 
A bank wants to increase debit card usage. It decides to run a promotion in which all cardholders who make a debit card transaction during a given month will be entered into a drawing. Each time someone makes a purchase, his/her name will be added to the drawing. Would this be considered a lottery? Would the drawing have to be opened up to all customers by allowing entry with sign-up forms at branches?
Answer: 

Because the participant would have to provide something of value to enter -- a deposit account at your bank and a purchase using the debit card -- it would be considered an illegal lottery under federal law.

To make it a legal sweepstakes, if permitted under state law, you would have to provide non-customers an opportunity to enter the drawing with an equal chance to win, at no cost.

First published on BankersOnline.com 1/10/11

First published on 01/10/2011

Filed under: 
Operations
Filed under operations as: 
IT
Sweepstakes

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