Reese's $25K Contest Might Violate Federal Law

Reese's may be in violation of state and federal laws with its new sweepstakes offer currently advertised on packs of peanut butter cups, the AP reports. The promotion on two-cup packages reads "You could win $25,000" and, in smaller print, "See details inside." But only after consumers have bought and opened a package can they see the small print: no purchase is necessary to enter the sweepstakes. The Reese's contest was first reported Monday by Edgar Dworsky, a consumer advocate and former assistant attorney general in Massachusetts, who runs the Consumer World website. "You never have to pay to play. All these packages should be recalled," he said.

Hershey Co., that Pennsylvania candymaker that owns the Reese's brand, didn't immediately respond to telephone and email messages left Monday. Sweepstakes are primarily governed by state laws, which require that no purchase is necessary to participate. A contest that requires a purchase is a lottery, which is subject to different rules. Three federal agencies—the Federal Trade Commission, the Federal Communications Commission and the US Postal Service—also enforce laws governing sweepstakes depending on the medium. The Postal Service requires mailed sweepstakes offers to make clear that no purchase is necessary, for example. The FTC doesn't govern sweepstakes specifically, but has broad laws prohibiting "unfair and deceptive acts."

The FTC said Monday that it can't comment on the practices of particular companies outside of an investigation. It wouldn't confirm or deny an investigation against Hershey. Dworsky said a sign near Reese's candy displays making clear that no purchase is necessary might meet legal requirements. But a spot check of candy displays in multiple states, including California, Virginia and Washington, found no such signs. Dworsky noted that Reese's ran a similar promotion earlier this year that ended in April using the same packaging. Some of those packages are still for sale, even though the sweepstakes code has expired, he said. Dworsky said he's concerned that the packaging could lure consumers into thinking they need to buy it to enter.

(More Hershey stories.)