A. Promotion and subject to register promotion
According to Article 88 of the Law on Commerce 2005, sale promotion is an activity of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers.
Accordingly, the traders conducting sale promotion are those falling into one of the following cases:
– Traders directly conduct sale promotion for goods and/or services that they trade in;
– Traders engaged in providing sale promotion services conduct sale promotion for goods and/or services of other traders under an agreement with such traders.
B. Prohibited acts in sale promotion activities
– Conducting sale promotion for goods and services banned from business; goods and services subject to business restrictions; goods not yet permitted for circulation; and services not yet permitted for provision;
– Using, for sale promotion purpose, goods and services which are banned from business; goods and services subject to business restrictions; goods not yet permitted for circulation; and services not yet permitted for provision;
– Conducting sale promotion for alcohol and beer, or using alcohol and beer for sale promotion targeted at under-18 people;
– Conducting sale promotion for, or using cigarette or alcohol of an alcoholic volume of 30o or higher for sale promotion in any form;
– Conducting untruthful or misleading sale promotion for goods and services so as to deceive customers;
– Conducting sale promotion for selling inferior-quality goods, causing harms to the environment, human health and other public interests;
– Conducting sale promotion at schools, hospitals or offices of state agencies, political organizations, socio-political organizations and people’s armed forces units;
– Promising to present gifts or prizes but failing to do so or doing it improperly;
– Conducting sale promotion for purpose of unfair competition;
– Conducting sale promotion with the value of sale promotion goods and/or services exceeding the maximum limit, or the maximum discount rate of sale promotion goods and services mentioned in Article 94.4 of this Law.
C. Is the lucky draw one of the promotion’s forms according to the Law on Commerce 2005?
Under Article 92.6 of the Law on Commerce 2005, the lucky draw promotion is one of the promotion’s forms that may be conducted by traders to promote the purchase and sale of goods by offering certain benefits to customers.
The lucky draw promotion is described as follows:
“Selling goods or providing services together with opportunities for customers to participate in games of chance, the participation in which comes after the purchase of goods or services and the winning of prizes depends on the luck of participants according to the rules and prizes already announced.”
D. Determination of the prize winner
The determination of the prize winner of the lucky draw must be organized publicly according to rules announced, witnessed by customers, and recorded in writing (Art 13.1 Decree 81).
E. Maximum value of promoted product
According to Article 6.1 and 6.2 Decree 81
– The promotional value of a unit of promoted product must not exceed 50% of the price of such promoted product unit before the promotion, except for promotion in the forms prescribed in Article 92.8 of the Law on Commerce 2005 and Article 8, Article 9.2, Article 12, 13 and 14 Decree 81.
– Total value of promotional product of a sales promotion program conducted by traders must not exceed 50% of total value of promoted product, except for forms of promotion prescribed in Article 92.8 of the Law on Commerce 2005, Article 8 and Article 9.2 Decree 81.
F. Determination of promoted product’s value
The value of promotional product falls into of following cases:
– For the case in which traders conducting sales promotion neither directly produce or import promotional goods nor provide promotional services, the value of such promotional product will be equal to the price paid by traders doing sales promotion to purchase promotional products or the market prices of such promotional products at the time of publication.
– For promotional products directly produced, exported, or provided by traders doing sales promotion, their value will be equal to the buying price or import price of such promotional products.
LMP can aid in completing the process promptly with a team of experienced, competent lawyers, as they have a lot of experience consulting and supporting clients to complete registration procedures with state agencies. Customers do not have to sign paperwork many times or follow incorrect procedures, and they do not register on time due to a lack of awareness of legal laws or incorrect identification of competent authority. Customers can save time by focusing on business activities rather than “headaching” over complicated procedures and unclear legal provisions.
Notice: The information provided here is for information purposes only. Depending on different times and customers, the above content may no longer be relevant. For any detailed advice, please contact LMP Lawyers.