SALES PROMOTIONS: CONSUMER MATTERS, BUSINESS GAINS

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SALES PROMOTIONS CONSUMER MATTERS, BUSINESS
GAINS

• Assistant Director JAIME LASARO L. OLMOS
• Bureau of Trade Regulation and Consumer
  Protection
• Department of Trade and Industry
• 7th PANA General Membership Meeting
• 34/F Petron Mega Plaza Cultural Hall, Makati City
• 27 July 2006

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• Per DTI-NCR Permit No. 143, series of 2006

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SALES PROMOTION, defined

• Techniques intended for broad consumer
  participation which contain promises of gain such
  as prizes, in cash or in kind, as reward for the
  purchase of the product, security, service or
  winning in contest, game, tournament and other
  similar competitions which involve determination
  of winner/s and which utilize mass media or other
  widespread media of information.

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SALES PROMOTION, defined

• Techniques purely intended to increase the
  sales, patronage and/or goodwill of a product

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IMPLEMENTING AGENCIES

• Department of Trade and Industry (DTI)
• consumer products, services, and service
  facility not falling under DOHs
• Department of Health (DOH)
• food, drugs, cosmetics, devices and hazardous
  substance

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• LEGAL BASIS
• REPUBLIC ACT NO. 7394 (Consumer Act of the
  Philippines), 1992
• Articles 116-124 Chapter VI
• DEPARTMENT ADMINISTRATIVE ORDER NO. 2, Series of
  1993 (Implementing Rules and Regulations)
• Rules VIII-XXI Chapter VI

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DTI
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DTI
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DTI
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DOH-BFAD
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PROMO PERMIT (Article 116, R.A. 7394)

• No person shall conduct any sales campaign,
  including beauty contest, national in character,
  sponsored and promoted by manufacturing
  enterprises without first securing a permit from
  the concerned department at least thirty (30)
  calendar days prior to the commencement thereof.
  Unless an objection or denial is received within
  fifteen (15) days from filing of the application,
  the same shall be deemed approved and the
  promotion campaign or activity may be
  conductedxxx

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PROMO PERMIT (Article 116 Illustrated)
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NOT COVERED BY THE RULES

• Sales promo campaigns sponsored by government
• Imported products under promotion in their
  country of origin, not covering the Philippines
• Social, civic, political, religious, educational
  and other similar organizations conducted among
  their members.

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EXEMPTIONS FROM PERMIT REQUIREMENT

• Competitions
• Parlor games which do not require the purchase or
  lease of any consumer product or service
• Door prizes
• Instant sales promotion campaigns
• In-store promotions in which no advertisements
  are made

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GENERAL RULES ON MECHANICS

• Sponsorship by several sponsors
• Consistency with the approved mechanics, complete
  and understandable
• Definite time, dates and places
• Availability of entry forms to participants
• Deadline for submission of entries

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GENERAL RULES ON MECHANICS

• Draw dates, date for selection of winners
• List of winners
• Announcement of winners or winning entries
• Notification of winners

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GENERAL RULES ON MECHANICS

• Duration and Extension of Promotion Period
• Announcement Required on Changes
• Postponement or Extension of Grand Draws/Final
  Selection of Winners
• Number of Times a Participant May Win
• Claiming of Prizes
• Disqualification on Participants

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PRIZES

• Should be identified and described as to material
  details, i.e. brand, size, model, make and price
• Transferability/convertibility allowed for
  foreign or domestic trips and scholarships
• Prizes payable in installment shall not exceed 5
  years secured by a performance bond
• Failure to deliver prize in kind cash equivalent
  may be paid the winner delivery of another prize
  in kind may be allowed only with consent of
  winner

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CLAIMING OF PRIZES

• 60 days from the date of the publication or
  announcement or notification of winners,
  whichever comes last
• After 60 days, written approval of concerned
  Department needed to forfeit prize in favor of
  sponsor

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PRIZES

• No reduction in quality or quantity in products
  and services under sales promotion, nor in the
  prizes, premium or benefit granted shall be
  allowed
• Buyers of products and services sold under a
  sales promotion shall, as well as winners, enjoy
  the same guarantees, warranties and remedies
  provided for under RA 7394 and other pertinent
  laws

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ACTION FOR VIOLATIONS AND PENALTIES

• Administrative Action
• Issuance of Cease and Desist Order
• Administrative Fine (P500 to P300,000)
• Criminal Action
• Fine (P200 to P600) or
• Imprisonment (1 month to 6 months) or
• Both Fine and Imprisonment

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VENUE TO FILE COMPLAINTS

• DTI Field Offices
• DOH-BFAD

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NTC Memorandum Circular No. 03-03-2005-A

• (Amendment to the Rules and Regulations on
  Broadcast Messaging Service Dated 15 March 2005)
• Section 3. All promos to be sent via
  broadcast/push messaging service shall be
  registered and approved by the DTI, provided
  however that the DTI shall not approve promos of
  PTEs and CPs not registered with the NTC. The DTI
  shall furnish the NTC with the list of registered
  and approved promos of PTEs and CPs.

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THANK YOU!
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• THE STATE SHALL PROTECT CONSUMERS FROM TRADE
  MALPRACTICES AND FROM SUBSTANDARD OR HAZARDOUS
  PRODUCTS.
• Sec. 9, Art. XVI
• General Provision, 1987 Constitution

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• LEGAL BASIS
• REPUBLIC ACT NO. 7394 (Consumer Act of the
  Philippines), 1992
• DEPARTMENT ADMINISTRATIVE ORDER NO. 2, Series of
  1993 (Implementing Rules and Regulations)

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BASIC POLICIES

• To protect the interests of consumers
• To promote the general welfare of consumers
• To establish standards of conduct for business
  and industry

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SALES PROMOTION, defined

• Techniques intended for broad consumer
  participation which contain promises of gain such
  as prizes, in cash or in kind, as reward for the
  purchase of the product, security, service or
  winning in contest, game, tournament and other
  similar competitions which involve determination
  of winner/s and which utilize mass media or other
  widespread media of information.

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SALES PROMOTION, defined

• Techniques purely intended to increase the
  sales, patronage and/or goodwill of a product

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DECLARATION OF POLICY

• THE STATE SHALL PROTECT THE CONSUMERS FROM
  MISLEADING ADVERTISEMENT AND FRAUDULENT SALES
  PROMOTION ACTIVITIES.

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EXEMPTIONS TO THE RULES

• Sales promo campaigns sponsored by government
• Imported products under promotion in their
  country of origin, not covering the Philippines
• Social, civic, political, religious, educational
  and other similar organizations conducted among
  their members.

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APPLICATION FOR PERMIT TO CONDUCT SALES PROMOTION

• At least 30 days before the commencement of the
  promotion
• Concerned Department 15 days to act on
  application, otherwise deemed approved

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VENUE FOR FILING APPLICATIONS

• Single province--respective provl office
• Several provinces, single region--respective
  regional office
• NCR or several regions including Metro Manila
  (MM)--DTI-NCR
• Several regions excluding MM--regional office
  where the main office or coordinating office of
  the sponsors is located

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EXEMPTIONS FROM PERMIT REQUIREMENT

• Competitions
• Parlor games which do not require the purchase or
  lease of any consumer product or service
• Door prizes
• Instant sales promotion campaigns
• In-store promotions in which no advertisements
  are made

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PROHIBITED ACTS

• Gambling and wagering schemes
• Use of medical prescriptions
• Other prohibited activities
• No act, product, scheme, or activity prohibited
  or declared illegal under the Philippine law
• No person shall directly or indirectly tamper the
  entries or sales promo paraphernalia

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GENERAL RULES ON MECHANICS

• Sponsorship by several sponsors
• Consistency with the approved mechanics, complete
  and understandable
• Definite time, dates and places
• Availability of entry forms to participants
• Deadline for submission of entries

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GENERAL RULES ON MECHANICS

• Draw dates, date for selection of winners
• List of winners
• Announcement of winners or winning entries
• Notification of winners

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PRIZES

• Identified and described as to material details,
  i.e. brand, size, model, make and price
• Transferability/convertibility allowed for
  foreign or domestic trips and scholarships
• Prizes payable in installment shall not exceed 5
  years
• Failure to deliver prize in kind, cash equivalent
  may be paid the winner

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CLAIMING OF PRIZES

• 60 days from the date of the publication or
  announcement or notification of winners,
  whichever comes last
• After 60 days, written approval of concerned
  Department needed to forfeit prize in favor of
  sponsor

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REQUIREMENTS FOR LOST RAFFLE STUBS

• Affidavit of Loss
• Affidavit of at least two (2) disinterested
  persons attesting to his identity or
• Certification of the barangay captain that the
  winner is really a resident of that place

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REDRESS OF CONSUMER COMPLAINTS

• Prescription Period 2 years
• from time the transaction was consummated
• From time the deceptive or unfair/unconscionable
  act or practice was committed
• Discovery of hidden defects

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ACTION FOR VIOLATIONS AND PENALTIES

• Administrative
• Issuance of Cease and Desist Order
• Administrative Fine (P500 to P300,000)
• Criminal
• Fine (P200 to P600) or
• Imprisonment (1 month to 6 months) or
• Both Fine and Imprisonment

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VENUE TO FILE COMPLAINTS

• DTI Field Offices
• DOH-BFAD

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THANK YOU!